Industrial Marketing Management

Industrial Marketing
Management
Lectures
30 hours
Assignments
20 hours
Case Analysis
10 hours
Self Learning
65 hours

What are
You Going to
Learn
Topic Number of
teaching hours
1 Introduction to Industrial Marketing Management 3
2 Integrated Business Development 3
3 Industrial Buyer Behaviour 3
4 Industrial Market segmentation 3
5 Pricing of Industrial Products and services 3
6 Role of Personal selling in Industrial Marketing 3
7 Customer Satisfaction, Loyalty and Retention 3
8 Industrial Marketing Research 3
9 Standardization of Industrial Products and Services 3
10 E-commerce applications of B2B marketing 3
Total 30

How will you be tested?
Specific assessment methods/tasks % weighting
Assignments (1) 20
Case Analysis and Presentation 20
Final Exam 60
Total 100
Range Of
Marks
Grade
85-100 A+
70-84 A
65-69 A-
60-64 B+
One Individual Assignment – 20 ( After 4 sessions)
Your Knowledge of Theory, Additional reading and Knowledge application in Reallife Business Context
One Group Case Study – Presentation and a Report (After 7 Sessions)
• Evidence of preparation
• Content
• Delivery (clear and logical organization, effective introduction and conclusion, creativity, the transition between speakers, oral communication
skills, and eye contact)
• Discussion (group initiates and maintains class discussion concerning assigned case studies, use of visual aids, good use of time, involves
classmates)
Written Exam – (After all 10 sessions)
You will be thoroughly tested on your Theory Knowledge, Your Interest of additional Reading and Proper Application of Knowledge

Session 1
Introduction to Industrial
Marketing Management
• What is Marketing ?
• Understand Industrial Marketing
• Differences in Industrial and Consumer
Marketing

What is Marketing?
Process of Understanding and Anticipating customers needs and wants and
offer them a better solution (create more value) than the competitors at
profit (org objectives) in a socially responsible manner
“the science and art of exploring, creating, and delivering value to satisfy the
needs of a target market at a profit. – Phillip Kotler
"the activity, set of institutions, and processes for creating, communicating,
delivering, and exchanging offerings that have value for customers, clients,
partners, and society at large“ – American Marketing Association

What is Marketing?
Value in marketing, also known as “Customer-Perceived Value”, is the
difference between a prospective customer's evaluation of the benefits
and costs of one product when compared with others.
Value = Benefits = Functional Benefits + Emotional Benefits
Cost = Price + Effort + Risk
Marketing is a constant value generating process
Value

What is Industrial Marketing ?
• Marketing products and services to Business Firms
• Industrial marketing is the marketing of goods and services by one
business to another. Industrial goods are those an industry of uses to
produce an end product from one or more raw materials
Business to Business Marketing
Business Marketing
Organizational Marketing
Industrial Marketing

Process of Understanding and Anticipating customers needs and wants and
offer them a better solution (create more value) than the competitors at
profit (org objectives) in a socially responsible manner
“the science and art of exploring, creating, and delivering value to satisfy the
needs of a target market at a profit. – Phillip Kotler
"the activity, set of institutions, and processes for creating, communicating,
delivering, and exchanging offerings that have value for customers, clients,
partners, and society at large“ – American Marketing Association

What is Industrial Marketing
Value

Marketing
What?
Product
Marketing
Service
Marketing
Who?
Consumer
Marketing
Industrial
Marketing

Difference in Industrial and Consumer Marketing?

Difference in
Industrial and
Consumer
Marketing?
5 Major Differences Between B2B vs B2C
1. Products / services being Marketed
2. Nature of demand
3. The buying process (Buying Behavior)
4. Communication
5. Impact from Economic and Financial Factors

Difference in Industrial and
Consumer Marketing?
Products and Services Being Marketed
• More Complex
• Functional vs Emotional attributes
• Large Volumes / big value
• Customized / Tailored

Consumer Marketing?
Nature of Demand
• Derived Demand
• Joint Demand
• Mostly Inelastic Demand

Consumer Marketing?
The Buying Process
Group Process
Formal / Rational Buying Decisions
Lengthy

Communication
Use of Focused Channels vs Mass
Technical and Functional Messages vs Emotional Messages

Impact form Financial and Economic Factors
Mostly Oligopoly or Monopoly buyers
Power and Dependency Relationship
Reciprocity – Buying from the business who does business with us
Economic variables – Interest Rates, Exchange Rates , Business Cycles
etc

Home Work
Fill this with some examples
Consumer Marketing Industrial Marketing
Products
Nature Of Demand
Buying Process
Communication
Impact of Financials and Economic Factors

Session 02
Industrial Buyer
Behavior
1. What is Industrial Buying Behavior and Consumer Buying Behavior
2. What is a Buying Centre
3. The B2B purchasing decision process
4. factors influencing B2B purchasing decisions
5. Differences between B2C and B2B purchasing decisions

What is Buying Behavior?
Buying behavior is the “decision-making processes” and acts of people/prospective
customers and institutes/organizations involved in buying and using products.
How individual customers / organizations behave when they are making a purchase
decision
 Consumer Buying Behavior
 Industrial / Organizational Buying Behavior
The study of why, when, how, what and other factors that influence buying decision of the consumers and Institutes

Consumer Behavior vs Industrial Behavior
“Consumer Buying behavior is the actions and the decision making processes
of people who purchase goods and services for personal consumption”
“Industrial Buying behavior is the actions and the decision making processes
of people who purchase goods and services for Institutional consumption”

Why we need
to Learn
Industrial
Buying
Behavior ?
• To understand why, when, how, what and other factors that
influence buying decision of the Institutes.
• To design the best possible product or service that fully
satisfies Institutional needs and demands.
• To decide where the service or product would be made
available for easy access of Institutes.
• To decide the price at which the Institutes would be ready
to buy that product or service.
• To find out the best method of promotion that will prove to
be effective to attract Institute to buy a product.

Types
Industrial
Customers
Producers - Are companies that purchase goods and services that
they transform into other products. They include both
manufacturers and service providers.
Resellers are companies that sell goods and services produced by
other firms without materially changing them. They include
wholesalers, brokers, and retailers.
Government - Government Owed Institutes - Ministries, Provincial
Councils, Government own manufacturing Companies
Institutional markets include nonprofit organizations such as the
American Red Cross, churches, hospitals, charitable organizations,
private colleges, civic clubs, and so on. Like government and for-
profit organizations, they buy a huge quantity of products and
services. Holding costs down is especially important to them. The
lower their costs are, the more people they can provide their
services to.

Buyers By
Nature
• Price buyers. These customers want to buy
products and services only at the lowest possible
price. They are less concerned about value,
differentiation or relationships.
• Relationship buyers. These customers want to trust
and have dependable relationships with their
suppliers, and they expect suppliers to take good
care of them.
• Value buyers. These customers understand value
and want suppliers to be able to provide the most
value in their relations.
• Poker player buyers. These are relationship or
value buyers who have learned that if they act like
a price buyer, they can get high value for low
prices.

Type of Industrial Products
1. Raw materials and Parts – materials and parts that goes
directly in to the end product the buyer produces
2. Capital Items – Capital goods are physical assets that a
company uses in the production process to manufacture
products and services that consumers will later use. Capital
goods include buildings, machinery, equipment, vehicles,
and tools. Capital goods are not finished goods, instead,
they are used to make finished goods.
3. Supplies and Services – intangible services that supports
business operation of the buyer

What is “Buying
Centre”
Buying centers are groups of people within organizations who make purchasing decisions. Large
organizations often have permanent departments that consist professionals
Purchasing agents, Purchasing managers, or Procurement officers
So what’s their Duty?
They Buy the best products and Services
At Best Price
With best Terms

What is “Buying Centre’s” day to day activities?
1. Studying a company’s sales records and inventory levels
2. Identifying suppliers and obtaining bids from them
3. Evaluate suppliers and categorize them
4. Negotiating prices, delivery dates, and payment terms for goods and services
5. Keeping abreast of changes in the supply and demand for goods and services their firms need
6. Staying informed of the latest industry and consumer trends so as to anticipate buying patterns
7. Determining the media (TV, the Internet, newspapers, and so forth) in which advertisements will be
placed
8. Tracking advertisements in newspapers and other media to check competitors’ business activities

Key Players of the Buying Centre
Purchasing Manger don’t make all the buying decisions in their companies, though. As we
explained, other people in the organization often have a say, as well they should. Purchasing agents
frequently need their feedback and help to buy the best products and choose the best vendors. The
people who provide their firms’ buyers with input generally fall into one or more of the following
groups:
Users
Initiators
Influencers
Decision Makers
Gate Keepers
Why we need to know about them - as its always not methodical or Process Driven
Personal and interpersonal dynamics

Buying Centre
Buying Centre Objective - Strick the best deal
• Reliability and Delivery
• Consistent Product Quality
• Lowest price – ( if delivery and quality objectives are
met )
• Excellent pre- post sales services
• Long term Collaborative Relationship

Industrial Buying process
A need is recognized. Someone recognizes that the organization has a need
that can be solved by purchasing a good or service. Users often drive this
stage, although others can serve the role of initiator

Industrial Buying Process
Determine product Specifics - Next, the buying center, or group of people brought together to help
make the buying decision, work to put some parameters around what needs to be purchased. In
other words, they describe what they believe is needed, the features it should have, how much of it
is needed, where, and so on. For more technical or complex products the buyer will define the
product’s technical specifications. Will an off-the-shelf product do, or must it be customized?
Potential suppliers are researched - At this stage, the people involved in the buying process seek
out information about the products they are looking for and the vendors that can supply them.
Most buyers look online first to find vendors and products, then attend industry trade shows and
conventions and telephone or e-mail the suppliers with whom they have relationships. The buyers
might also consult trade magazines, the blogs of industry experts, and perhaps attend Webinars
conducted by vendors or visit their facilities and testimonials form their Clients

Selection - Purchasing agents, influencers and Decision Makers often play a key
role when it comes to deciding which vendors are the most qualified.
• Are they reliable and financially stable?
• Will they be around in the future?
• Do they need to be located near the organization or can they be in another region of the
country or in a foreign country?
• Is the Price, right?
• Quality Acceptable?
• Credit Terms
• Guarantee and Warrantee
• Repair agreements
• Upgrade Agreements
• Retuned Policy
• Other Obligations

Buy -This is the stage in which the actual order is put
together.
• Purchase Agreements
• Service and Repair Agreements
• Vender Registration
• BOQs / Official Quotations
• POs
• Invoices
• GRN
• Payments

Evaluate - Just as consumers go through an evaluation period after they
purchase goods and services, so do businesses. The buying unit might
survey users of the product to see how satisfied they were with it.
They do surveys with Users, Consumers, Influencers
Keep records
Inform Suppliers, Renegotiate
Work together to improve the situations

Types of Buying / Buying Situations
1. New Task / New Purchase
More info needed , More Options, More People get involved , more risk, decisions take long time
2. Modified Rebuy / Change in Supplier
Not satisfied with the supplier and need to change the supplier , or product sec change
3. Straight Rebuy / Repeat Purchase
Directly order From the same supplier

Factors influencing B2B buying
behavior
• External Factors - Economic, Political, Competition,
Social Environment
• Internal Factors – Business Objectives, Financial
Capacity, Technology, Manpower Skills
• Individual Factors – Knowledge, Culture, Internal
Politics, Motives, Interpersonal Relationship
• Conditional Factors - Group Relationships, Credit
Periods, Availability, Urgency

4 highly Noticed Characteristics of B2B buying behavior
No decision or Postpone – Anything other than inevitable purchases
1. Status Quo Bias – Show them the “risk of no change” and Value of Change
2. Loss Aversion – Threat of Loss vs Opportunity of gain
3. Decision Paralysis - Large number of units in the Buying Centre
4. The impact of early influence - The sales person who does the most to shape the
prospect’s vision of value from an early stage emerges with a huge competitive advantage.

Difference between
B2B and B2C buying
Behavior
• High Value and High Quantity thus
high Risk
• Individual Responsibility vs
Collective Responsibility
• It’s a group of People - Buying
Centre
• It’s a formal Process – Industrial
Buying Process to be Followed
• It takes time – As the process is
lengthy

Differences in B2B and B2C Buying Behaviour

Marketing Implication of B2B Markets
How to take the Buying Centre through the Buying Behaviour Process
smoothly
1. Study the organization – Background, Culture, Leadership, Financial Status,
Technology, Personal Skills etc
2. Understand their Roles and their Individual Characteristics
3. Understand the Objective of the Org. Purchasing
4. Be responsive at Right time to Right People
5. Proper Communication
6. Proper use of closing Techniques

Session 03
Industrial Market Segmentation
• What is Segmenting , Targeting and Position
• B2B segmentation and it’s Variables
• How to Evaluate Market Segments
• How to develop a positioning Strategy

STP Strategy
• Segmenting - Dividing the Total Population into groups with similar characteristic
• Targeting - Identify the groups that you want to serve, or your product/ services can fit in to
• Positioning - Strategic exercise we use to establish “the image” of a brand or product in a
consumer’s mind. How you want your brand to be perceived by the target consumer

What is Segmentation
What is Market Segmentation?
Market segmentation is a marketing term that refers to aggregating prospective
buyers into groups or segments with common characteristics and who will respond
similarly to a marketing action.
Market segmentation enables companies to target different categories of
consumers who perceive the full value of certain products and services differently
from one another.

Let’s Take an Example
• Geographical - Country, District, Region, Town
• Demographic – Age, Gender, Income, Ethnicity,
occupation
• Psychographic – Lifestyle, Attitude, Personality,
Approach to Risk ,believes and Values
• Behavioral - Heavy users, Mild Users, Channels
used, Brand Loyalty

The following are some of the positioning guidelines that
firms should follow for an effective brand positioning:
• Defining and Communicating the Competitive Frame
of Reference
• Choosing Points of Parity and Points of Difference
• Establishing Points of Parity and Points of Difference
• Updating Positioning Over Time
Positioning Guidelines:
Positioning - Positioning Guidelines

Your point of Differences should be
1. Relevant
2. Superior
3. Transmissible
4. Sustainable
5. Defendable
Then you need to execute this Positioning
Up Market , Premium, Authentic Chinese Restaurant with
Great Chinese food and excellent Customer Service
Kiribathgoda, Makola and Kadawatha, between
20 to 55 aged, income above 100,000, Chinese
food lovers, enjoy finer things and value quality
food, conscious about health and authentic food,
heavy Chinse food users, dine out lovers, who
will also order form UBER and get food
delivered to doorstep

This Positioning Needs to be
Supported by the Marketing Mix
• Products
• Price
• Place
• Promotions
• People
• Physical Evidence
• Processes

Business Market Use different variables
1. Demographic
2. Operating Variables
3. Purchasing Approaches
4. Situational Factors
5. Personal Characteristics

Industrial
Market
Segmentation
Demographic Variables
• Industry: Which industry/ industries should we serve?
• Company size: How large should the served companies be?
• Location: What geographical areas should we focus on?
Operating Variables
• User or nonuser status: Should we serve heavy users,
medium users, light users or nonusers?
• Customer capabilities: Should we serve customers needing
few or many services?
• Technology: What customer technologies should we focus
on?

Purchasing Approaches
• Purchasing criteria: Should we serve companies that are primarily seeking quality/ service/Price
• Purchasing-function organization: Should we serve customers with a highly centralized or
decentralized purchasing organization?
• Nature of existing relationship: Should we serve customers with which there is already a strong
relationship or go after new customers?
• General purchasing policies: Should we focus on companies that prefer leasing/ service contracts/
bidding?
• Power structure: Should we focus on companies that are engineering, Technical dominated,
financially dominated, ?

Situation Factors
Urgency: Should we serve companies that require quick delivery?
Specific application: Should we focus on certain product applications?
Personal Characteristics
Buyer-seller similarity: Should we serve companies whose people and values are similar to ours?
Attitude towards risk: Should we serve risk-taking or risk-avoiding customers?
Loyalty: Should we serve customers that are highly loyal to their suppliers?

This segmentation process should go on and on until the target segment is as clear-
cut as possible. Ideally, the company should have a clear picture of the typical
target customer it targets.
So it should start with Macro Variables and then drill it further down to Micro
Variables – to get as closer and precise as possible

Evaluate Market Segments
• Size and Growth
• Competitiveness in the Segment
• Profitability of the Segment
• Capacity of the Company to Cater that Segment
Targeting - Based on the above criteria marketers select one or more market
segment to cater, then they need to design marketing strategies ( Marketing Mix
Strategies) to fulfill the segment needs better than competition

How You do this Practically
1. Key accounts management – 80/20 theory
2. Then Apply segmentation to your smaller Customers but they are big in numbers
3. Consider “Firmographic” segmentation – Industry as Demographics
4. Then get in to “ Need base Segmentation” As even in the same industry company to company “needs are
different”
5. Apply Behavioural Segmentation if needed – How companies behave in Buying, “Their Loyalty Level, How
price sensitive they are, How relationship oriented they are”
6. Use Market Research to find out exact needs – Not only need company structure, culture, Buying Process
and Decision Making Units and its players
7. Use cluster Analysis to “group together” – Don’t have more than 4 -5 clusters to serve – that will reduce
the production and operation efficiency

How to Develop a Positioning
Strategy
• Identify which attributes / benefits target consumer
consider important while buying a product or
service.
• Product Quality
• Price
• Pre and Post purchase Services
• Brand Image and Credibility

Perceptual Mapping / Positioning Mapping
A perceptual map is of the visual technique
designed to show how the average target
market consumer understands the positioning
of the competing products in the marketplace.
In other words, it is a tool that attempts to
map the consumer’s perceptions and
understandings in a diagram.

Session 4
Industrial
Market
Research

How important is Research?
• To gather Information
• Better information leads to better decisions
• Market is dynamic – what you know today will be obsolete by
tomorrow
• Information will allow you to stay ahead of the competition
“It Allows Marketers To Understand How Customers Use A Product. By Truly
Understanding Customers' Wants, Needs, And Motivations Marketers Can Create
Products That Respond To Those Needs”.

Why Companies do
Research?
• To identify customer needs and wants - Customer Research
• Track Competitors – Competitor Identification
• Estimate Market size and potential - Market Sizing
• To Analyze certain risks factors to Business – Business Risk Analysis
• Analysis Business Environment Factors – Economic Insights

7 steps of Research Process
1. Define Research Problem
2. Review of Literature
3. Formulate Hypothesis
4. Prepare research design
5. Sample Selection
6. Data Collection
7. Data Analysis
8. Interpretation and Research Writing

Sampling Methods
Sample vs Population (census)
Selecting individual members or a subset of the population to make statistical inferences
(conclusions) from them and estimate characteristics of the whole population
Time / Cost saving method
Probability Sampling
Non-Probability Sampling

Sampling Methods
Probability Sampling
is a sampling technique where a researcher sets a selection of a few criteria and chooses members
of a population randomly. All the members have an equal opportunity to be a part of the sample
with this selection parameter.
1. Simple random
2. Systematic Sampling
3. Cluster Sampling
4. Stratified Sampling

Sampling Methods
Non-Probability Sampling
is a sampling method that involves a collection of feedback based on a researcher or statistician’s
sample selection capabilities and not on a fixed selection process. In most situations, the output of
a survey conducted with a non-probable sample leads to skewed results, which may not represent
the desired target population. But, there are situations such as the preliminary stages of research or
cost constraints for conducting research, where non-probability sampling will be much more useful
than the other type.
1. Convenience sampling
2. Judgmental or purposive sampling
3. Snowball Sampling
4. Quota Sampling

Data Collection?
• Primary Data
New information gathered for specific task
Time consuming
Costly
More valuable and related
Methods – Surveys , Observations, Interviews
• Secondary Data
Existing Information
May not be useful / outdated or irrelevant
Easy and not Expensive

B2B Research vs B2C Research
• Unique Research problems
• Limited Population
• Difficult to Identify the Total Population
• Less Literature
• Secondary Data Available
• Primary and Unique data is more important
• Data Collection - Non- Probability
• Difficult to generalize
• Greater details – (in depth information needed )
• Time consuming
• Costly

Marketing Intelligence System
A marketing intelligence system is a set of procedures and sources used by managers to obtain their everyday
information about pertinent developments in the marketing environment.
It means that this is a mechanism used by executives to gather data on the developments taking place in the
environment – commercial, technological, legal/political, and so on – to help them formulate strategies to
cope up with the changes.
It’s a system of People, Procedures, Physical Resources – Such as computers, Systems, Networks, Storages
It acquires, disseminates, interpret and Store Information related to business decision making

Session 05
Pricing
Strategies
60% of the purchasing
decisions in B2B are Based on
The Price

Role of Price in Customer –Perceived Value
For industrial Products – Seller need to convince the buyer for Value
Value

Nature of Industrial Products & Pricing
• Tend to have inelastic demand
• Technically Sophisticated
• Customized
• Routine Purchases
• Situational Driven

Characteristics of Industrial Pricing
Pricing doesn’t come alone
• Delivery and installation
• Training Cost
• Financing cost
• Discount – quantity and Price
• Trade in allowances
• Must consider complimentary and substitute products when doing the pricing
• Highly affected by External Factors

The Framework of Pricing Decision
Before taking pricing decisions, a buying firm must find
“Price Determinants” (factors that influence pricing decisions)
1. Pricing Objectives
2. Cost Analysis
3. Customer Analysis
4. Competitors Analysis
5. Govt. regulations and Policies

B2B Pricing Objectives
• Return on Investment
• Earn a profit
• Stabilize the market
• Convey desired image
• Discourage entry of new players
• Push out weak competition
• Sell other items inline
• Recover Investment quickly
• Avoid government interference

Cost Analysis
You need to study how your total cost
of production / unit Behave
Fixed Cost
Fixed Rent, Labor, energy, Transport
Variable Cost
Raw Materials, Packaging, Commissions
etc
Semi variable Cost
Rent with a base, Labour with Minimum
hourly pay
Step Cost
Electricity, Water, Rent equipment

Cost Analysis
Economics of Scale occur when
increased output leads to lower unit
costs. (lower average costs)
Economics of Scale

Cost Analysis
the break-even point refers to the
amount of revenue necessary to cover
the total fixed and variable expenses
incurred by a company within a
specified time period.
This is important to
determine the price,
Discounts, Promotional
Offers

The Pricing Models
Flat-rate pricing
Flat-rate pricing means offering one product, with the same set of features, for one
price.
This model is easy to sell and communicate. Sales and marketing can focus on a
single offer that is clearly defined.
But, flat-rate pricing prevents you from maximizing revenue.
Flat-rate pricing is typically only suited to companies that have one product and
limited revenue. Research has found that ‘the fastest-growing companies have less
than one product per million dollars of revenue.’

The Pricing Models
Tiered pricing
Most companies with tiered pricing models offer 3-6 tiers or packages. The most common tiered
pricing model is linear. The lowest-priced tier has the fewest features, and each subsequent level
adds new features for a higher price.
The advantages of a linear model are:
You push buyers to upgrade by offering more functionality
Some features require more resources to develop/deliver. You can put these features in higher-
priced tiers to ensure that you don’t under-sell them
The market is likely to be made up of some very price-sensitive individuals and some less price-
sensitive ones. Having linear pricing tiers allows you to offer a product for each level of price
sensitivity
You can include a free tier to get a ‘foot in the door’ with prospects – the so-called ‘freemium’
model

The Pricing Models
Usage-based pricing (i.e., Pay As You Go)
The more you use a service, the more you pay. For example, Think a but rent a car
or Industrial Machinery
The advantages of this model are:
Price is linked to usage. Customers pay more in months of more significant activity,
which may be months of greater revenue, making it easier to justify a larger invoice
Certain customers do not require more resources to service than others. Fixed
pricing can mean that they pay the same as high resource-intensive customers.
Fixed pricing tends to mean that these less resource-intensive customers are
charged the most
It makes it easier to get a ‘foot in the door.’ Buyers aren’t scared off by any up-front
costs, so they can quickly start using the product

Pricing Strategies
3 major pricing strategies for B2B markets
1. Cost plus pricing strategy
2. Competition Based Pricing Strategy
3. Value based Pricing Strategy
Google work :
https://theproductcompany.com/value-
based-pricing/

Pricing Strategies
Pricing strategies for as per Product-Market situation
• New Product Development
• Pricing across Product Life Cycle
• Competitive biding in Competitive Market

New Product Pricing Strategy
In the introduction stage of a new product, two alternative pricing
strategies are available
1. Market Skimming
Distinct , high tech patents or with Big Capex involved products are normally in the beginning set a
higher price with higher margins. They can then recover the big investment cost
2. Market Penetration
When the products is not distinct, with less barriers to enter in a competitive market new products
should be made available at low price point and gain market share and secure the market before
anyone can enter . Therefore, companies can obtain economics of scale quickly

Pricing Strategies across PLC
In Growth - Maximize profit by reducing Per unit cost – if
you are using the Penetration strategy this is the time to
introduce “premium” or upgrade version of solutions at
Higher price
If you are using the Skimming Strategy, then look for a
“functional” or “small units” to cater to one step lower
market otherwise competition will come and cater to
those markets.
In Maturity – Cut down prices in terms of discounts,
bundle offers, Promotions - Or Companies can introduce
different variants, options and line extensions with
different price points.

Pricing Strategies across PLC
In Decline - If the product quality and acceptance is good
company should not reduce the prices - Rather increase
the price to generate maximum profit - this happens
when your industry is dying
If your product is declining in the industry – you need to
reduce the prices as quickly as possible and get the
return investment covered as much as possible while
cutting all sales related expenses

Competitive Biding
In B2B market – large volume of purchasing is done through
competitive biding.
1. Close Biding
Mostly used by government – all specifications are given, the lowest price offer will
take the order
2. Open Biding
Used by Private organizers – after receiving bids, firm select couple of suppliers and
negotiate about price ,Payment Terms, Service Agreements, technology etc. then
offer the order to the best supplier
Companies use – Probabilistic Biding Techniques to set up pricing for such bidding procedures

B2B Pricing Decision what lies beneath ?
• Cost of Production
• Capital Investment for Production
• Nature of the product – Complementary, Substitute, Compulsory , Value Addition
• Nature of Demand
• Company Pricing objectives
• Competition – How close or remote is the competition
• In Which stage of the PLC ?

Session 06
Standardization of Industrial Products and Services

What is Standardization?
Standardization is the process of creating protocols to guide the creation of a
good or service based on the consensus of all the relevant parties in the
industry.
The standards ensure that goods or services produced in a specific industry
come with consistent quality and are equivalent to other comparable
products or services in the same industry.
Standardization also helps in ensuring the safety, interoperability, and
compatibility of goods produced. Some of the parties involved in the
standardization processes include users, interest groups, governments,
corporations, and standards organizations.

Standardization in a Nutshell ….
“out all of the ways the process is done, you need to find the one that’s
the cheapest, fastest and creates the most value. While it’s rare to find
something that does all three,
the best process tends to be pretty easy to spot.

Goal of Standardization
The goal of standardization is to ensure uniformity to certain practices
within the industry. Standardization focuses on the product creation
process, operations of businesses, technology in use, and how specific
compulsory processes are instituted or carried out.
One example of standardization is the Generally Accepted Accounting Principles
(GAAP) that companies must follow when preparing or reporting their annual
financial statements. They ensure uniformity in how financial reports are
prepared and improve the clarity of the financial information presented to the
public.

Business Process Standardization
The most common form of standardization is in the area of business processes.
Typically, companies with a global presence or operate franchises utilize detailed
process documentation to ensure that the quality of their product or service is the
same regardless of the geographical location that a customer visits.

Standardization for Manufacturing
Businesses engaged in manufacturing often form framework
agreements that ensure that the products they produce meet the same
specifications as other businesses in the industry. The standardization
may cover products sold in one geographical location or in the global
arena.
Standardization among manufacturing businesses ensures that
customers get similar products regardless of the manufacturer or
geographical location of the store where customers buy from.

Standardization
of Services
Can you standardize a service?
The answer is not just “yes, it is possible”
but “yes, they must be standardized.”
The standardization of services will play a
principal role in the further development
of a service economy.
Through standardization, similar services
with different characteristics and
structures become comparable.
Standardization will reduce “variability” in services

Marketing Standardization
Standardizing products that are available in various states, countries, or
continents ensures that customers receive the same product or service
regardless of where they buy it. This applies to big brands that customers are
already very familiar with, where any change in the product would likely be
noticed immediately. One example of a company that uses this form of
standardization is Coca-Cola.
Companies that operate globally also standardize their advertising,
maintaining a uniform design theme across the different markets as a way of
reinforcing its brand image among its global audience. The same design
theme and color scheme are applied even when the product packaging is
presented in a different language.

Why Standardization is Important to Producers
• Operational efficiency
• Reduction of deviations
• Higher Productivity & Output
• Economics of Scales
• Ability to scale
• Easier Process Improvement
• Easier Onboarding and outsourcing
• Guarantees quality

Why standardization is important in B2B
Large quantities – As there are many number of quantities, standardization
with big capex is justifiable
Oligopoly markets – There are few buyers, and they buy large quantities
therefore if a client can standardize its product to both buyers, both parties
will be benefited
Challenges in Standardization
When you work in an industry where the products and certain elements are
standardized – then your price, distribution and other value additions and
personal relationship matters a lot in making a sale

Why standardization is important to B2B Customers
• Increase efficiency in production
• Reduce the cost
• Reduce the risk of changing suppliers
• Easy for comparisons
• Simplify Purchasing
• Easy to go global – expand
However, on the other hand – differentiation is very difficult

Role of Personal Selling in Industrial Markets
Session 07

Nature of B2B Products and Services
• Functional Products
• Highly Standardized or Highly Customized
• Inelastic demand
• Technical Features
• Aftersales Services and Assistance
• Small number of buyers
• Small number of Sellers

Marketing Communication Mix (Promotion P)

Personal Selling
Personal selling uses in-person interaction to sell products and
services. This type of communication is carried out by sales
representatives, who are the personal connection between a buyer and
a company or a company’s products or services.
Salespeople not only inform potential customers about a company’s
product or services, they also use their power of persuasion and
remind customers of product characteristics, service agreements,
prices, deals, and much more

Personal Selling
• The most significant strength of personal selling is its flexibility.
Salespeople can tailor their presentations to fit the needs, motives, and
behavior of individual customers. A salesperson can gauge the customer’s
reaction to a sales approach and immediately adjust the message to
facilitate better understanding.
• A final strength of personal selling is the multiple tasks that the sales force
can perform. For example, in addition to selling, a salesperson can collect
payments, service or repair products, return products, and collect
product and marketing information. In fact, salespeople are often the best
resources when it comes to disseminating positive word-of-mouth product
information.

7 steps in Personal Selling
Step 1: Prospecting and qualifying
• Before planning a sale, do your research to identify the people or companies who might be interested in your product or service.
This step is called prospecting, and it’s the foundational step for the rest of the sales process. A lead is a potential buyer. A
prospect is a lead that is qualified or determined to be ready, willing and able to buy. The prospecting and qualifying step relates to
the needs awareness step in the buying process.
Step 2: Preparation/pre-approach
• Before making a sales call, email or visit, it is important to do your homework by researching your customer and planning what you
are going to say. A good salesperson researches a prospect, familiarizing with the customer’s needs and learning all the relevant
background info about the individual or business.
Step 3: Approach
• This is where you make a first impression. You do this by introducing yourself, explaining the purpose of your call or visit, and
establishing a rapport with your prospect. First impressions are crucial to building the customer’s trust. You work to establish a
rapport with the customer first. This usually involves introductions, making small talk, asking warm-up questions, and generally
explaining who you are and whom you represent.

Step 4: Presentation
• Your research and preparation pays off during the presentation, when you propose your sales solution to your prospect.
• By the time you are ready to present you will understand your customer’s needs well enough to be sure you are offering a solution
the customer could use. The presentation should be tailored to the customer, explaining how the product meets that person or
company’s needs. Now is the time to focus on the benefits of your product or service. This might involve a product demonstration,
videos, PowerPoint presentations, or letting the customer look at or interact with the product.
• At this point, the customer is using the information being shared as part of a suite of possible solutions. They might be researching
your offer compared to others. It is during this part of the sale where you can use upselling and cross selling to engage the
customer further.
• Once you have identified your customers needs you will know if you they would receive additional benefits from an enhanced
product or service offering. This is upselling. Cross selling is pitching additional products that relate to the product your customer
is considering or purchasing (also known as suggestive selling).
• Note: Never try to sell your customers something they don’t need. They may well lose trust or confidence in you.

Step 5: Handling objections
• After you’ve made your sales presentation, it’s natural for your customer to have some
hesitations or concerns, known as objections. Good salespeople look at objections as
opportunities to further understand and respond to customers’ needs.
• Be prepared and use some of the following ideas:
• Recognize your customer’s comments by acknowledging their views and then responding with
solutions.
• Ask questions about their views to find ways to address them.
• Ideally you will be prepared for what customers will say and be ready to respond. For example:
• Objection: ‘Sorry, I don’t have the time today.’
• Response: ‘No problem. I’m more than happy to book you a ten-minute meeting later in the
week.’

Step 6: Closing the sale
The important – and sometimes challenging – part of the sale is closing it! This is where you actually have to ask if the potential
customer is willing to make the purchase. If your customer has been convinced your product or service will meet their needs, you
close the sale by agreeing on the terms of the sale and finishing up the transaction.
Depending on your business, you might try one of these three closing strategies.
Alternative choice close: Assume the sale and offer the prospect a choice, where both options close the sale. For example, ‘Will you
be paying the whole fee up front or in installments?’, ‘Will that be cash or card?’ or ‘Would you like me to wrap that for you?’
Extra inducement close: Offer something extra to get the prospect to close, such as a free month of service or a discount.
Standing room only close: Create urgency by expressing time is of the essence. For example, ‘The price will be going up after this
month’ or ‘We only have six spots left’.
Step 7: Follow up
OK, so you’ve made the sale. While it might seem like you’ve accomplished your goal, the customer journey continues. Follow-up is
an important part of assuring customer satisfaction, retaining customers and prospecting for new customers. This might mean
sending a thank you note, calling the customer to make sure the product was received in satisfactory condition, or checking in to
make sure a service has met the customer’s expectations.

Personal Selling Techniques in B2B
• Retail selling: in-store assistance from a salesclerk to help customers find, select, and purchase products that meet their
needs
• Door-to-door selling: offering products for sale by going door-to-door in a neighborhood
• Field selling: sales calls by a sales representative to connect with target customers in person or via phone
• Sales presentations: in-person or virtual presentations to inform prospective customers about a product, service, or
organization
• Conversations: relationship-building dialogue with prospective buyers for the purposes of influencing or making sales
• Demonstrations: demonstrating how a product or service works and the benefits it offers, highlighting advantageous
features and how the offering solves problems the customer encounters
• Consultative selling: consultation with a prospective customer, where a sales representative (or consultant) learns about
the problems the customer wants to solve and recommends solutions to the customer’s particular problem
• Reference selling: using satisfied customers and their positive experiences to convince target customers to purchase a
product or service

Advantages of Personal Selling in B2B
• Focus discussions – Attention to details
• Understand complex customer requirements
• Customization is easy
• Explanations of product and service features are easy – Use of visual aids,
Advises, recommendations
• More time to get to know customers and build relationships
• Higher conversion rates
• Easy to Evaluate the effectiveness

Disadvantages of Personal Selling in B2B
• High cost per contact
• Difficulty in finding best salesperson
• Message inconsistency
• Risk of Losing salespersons with built business

Session 08
Customer
Satisfaction
Loyalty and
Retention

Customer Satisfaction Customer Loyalty Customer Retention
Customer satisfaction is a
marketing term that
measures how products or
services supplied by a
company meet or surpass a
customer's expectation
Customer loyalty is the act of
choosing one company's
products and services
consistently over their
competitors. When a customer
is loyal to one company, they
aren't easily attracted by price
or availability. ... Customers
that trust the companies they
do business with will be more
likely to purchase again in the
future.
Customer retention refers to
the ability of a company or
product to retain its
customers over some
specified period. High
customer retention means
customers of the product or
business tend to return to,
continue to buy or in some
other way not defect to
another product or business,
or to non-use entirely

Customer Satisfaction
• It’s about your product or “Service Performance vs Customer
Expectations”
If your performance meets customer expectation = Satisfaction
If your performance could not meet customer expectations = Dissatisfaction
If your performance exceed customer expectations = Delight

Customer Expectations about the Performance of the Product or
Service is set by
• Industry standards
• Offerings of the competition
• Customers past experiences
• Promises made by the company
Customer Expectations

Company Performance is how much value that a company is generating
to their customers

Why Customer Satisfaction, Loyalty and Retention is
Important in B2B
Because of it Very Nature ..
Few Buyers
Large quantities
References and Recommendations are crucial in Business Development
loyal customers are the most likely to keep coming back to purchase from your
business.
It takes 5 times expensive to attract a new customer than selling to a repeat
customer
1. Increase revenue
2. Reduce risk
3. Help forecast and future predictions
4. Create brand ambassadors
5. Defend against the competition
6. Gain valuable feedback

How to Create
Customer Loyalty
• Invest on “continuous value creation” to customers
• Access customers satisfaction levels – customer surveys,
focus groups , simple questionnaires
• Listen to customers and act on their feedbacks
• Create emotional bound, personal contacts, friendships,
social bonding
• Invest on Customer Loyalty Building and Customer
retention program – CRM systems
• Create “Customer Satisfaction Crazy ” culture
• Introduce a financial benefit mechanism for loyalty and
repetition

What is CRM
system
Benefits of CRMs
Better knowledge of customers.
Better segmentation.
Better customer retention.
Better anticipation of needs.
Better and speedier communication.
Better protection of data privacy

Session 09
Ecommerce
Application in
B2B

What is E Commerce
E-commerce is the buying and selling of good or services via the internet,
and the transfer of money and data to complete the sales. It's also known as
electronic commerce or internet commerce
The standard definition of E-commerce is a commercial transaction which is
happened over the internet.
Any form of business transaction in which the parties interact electronically
rather than by physical exchange or direct physical contact

• 1995 online bookstore
Jeff Bezos is the world richest man
186.2 B USD
1.6million Packages a day
200million unique Visitors a month
108 Billion USD in 2020/21 last quarter
– 400USD Billion
Net Income 21B USD
49 Minute breakdown misses 5.7Million
USD
563,000 people work for Amazon

E Commers Business Models
B2C - Commercial transactions are between an Organization and consumers
B2B – Commercial transactions are between an organization and other
organization
C2C – Consumers transact directly with consumers

E commerce
Infrastructure
E commerce should be supported
by many business infrastructure
Faster Internet Services
Cheap Internet facilities
Electronic Fund Transfers
Electronic Banking Systems
Social media and E advertising
Inventory Management systems
Automated date collection (MIS)

B2B e-commerce
B2B businesses come in many different shapes, sizes, and levels of complexity. They can
span multiple business models and sectors, ranging from services such as accounting,
legal, digital, to physical products like machinery, equipment, consumer goods, and so on.
While we shop online as consumers, many of us are not aware that the global business-to-
business digital commerce market is valued at a whopping 6 times that of the B2C market.
These statistics are projected to grow as local and international business buyers congregate
online – looking for speed, convenience, and easy purchasing experiences. This will push
traditionally offline B2B sellers to set up an eCommerce site, driving up the demand for B2B
eCommerce platforms.

New Trends in B2B
1. Personalization
Customers - even business customers - have needs, wants, and desires, including the affinity to
personalization. At the same time, B2B buyers have far more requirements. They employ multiple
stakeholders, deal with longer sales cycles, and in general require more complicated personalization - and
that’s not going away.
2. Multi Channels
As consumers, most of us already switch between offline stores and online shopping. Whether we’re using
mobile apps, mobile websites, or visit in-person, we expect brands to have the same experience every step of
the way. B2B customers are no different, expecting omnichannel experiences throughout their long buying
journeys.
3. Mobile Dominance
Mobile web traffic is doubling every five years and B2B is no exception. As mobile-dependent millennials
move into managerial positions, mobile usage of B2B buyers is projected to increase dramatically in the near
future. With that, so will B2B sellers, looking to gather high-value leads and engage with opportunities.

Conversational Commerce
With one in six US adults owning a voice-activated device, voice searching, ordering, and
confirmation is already gaining momentum. This represents an opportunity for newcomers -
previously offline sellers - and existing sellers to improve customer experience with repetitive
ordering.
VR & AR
VR (virtual reality experiences) and AR (augmented reality) have the possibility to make inroads
where immersive experiences matter. Some B2B sellers will need to allow buyers to virtually try out
and confirm complex products such as replacement parts or custom designs.
Concern on Digital Privacy and Protection
The concept of digital privacy can best be described as the protection of the information of private
citizens who use digital mediums. Privacy relates to any rights you have to control your personal
information and how it's used. Think about those privacy policies you're asked to read and agree to
when you download new smartphone apps. Security, on the other hand, refers to how your
personal information is protected.

New Trends in B2B
• Extensive use of AI DBM and CRM
• The technological development in AI and DBM,
CRM impacting B2B eCommerce. Everyone
involved in the process - from suppliers,
managers, marketers, sales reps to customers -
can benefit from a more accurate prediction of
their desired outcomes, and receive
recommendations with the right course of action.

B2B e commerce vs B2C e commerce
• More formal Relationships
• More long term relationships
• Longer Buying Cycles
• Multiple Decision makers
• Personalized products and pricing

Benefits of B2B e commerce
Lowers costs, improves operations and internal processes

How do you start a successful B2B Ecommerce

Industrial Marketing Management

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