9. Industrial Market Vs Consumer Market Distribution channel characteristics Industrial Markets * Shorter, more direct & fewer linkages between seller and buyers. Consumer Markets * Indirect and multiple linkages Understanding Industrial markets

10. Industrial Market Vs Consumer Market Distribution channel characteristics -Example Hotel buying Cold Drinks * Supplied directly by the distributor, may even be serviced by company employee or a regular basis. Customer for Cold drinks * Normal distribution style of distributor to retailer to customer. Virtually no interaction with company. Understanding Industrial markets

11. Industrial Market Vs Consumer Market Promotion Industrial Markets * Emphasis on personal selling or one to one dealing. Example : Selling fridges with decals . You go and deal with Coke or Pepsi H.O. Consumer Markets * Emphasis on mass market promotion. Example : You plan an adv. campaign to highlight decals and generate customer flow. Understanding Industrial markets

12. Industrial Market Vs Consumer Market Pricing Industrial Markets * Competitive bidding & multistage negotiation. * Sharing of cost data & budgeting of acceptable profits in many cases. Consumer Markets * Normally MRP & MOP * Concept of list price & its implementation. Understanding Industrial markets

13. Industrial Market Vs Consumer Market Pricing - Example Industrial (CSD purchase Of Rum ) * Competitive bidding & selection on basis of L1. * Sharing of production and overhead cost data with CSD and price based on cost + margin. Consumer Markets for Rum * Normally MRP & MOP * Concept of list price & its implementation in the trade. Understanding Industrial markets

14. A big reseller can be treated as a Industrial Buyer Example: Shoppers Stop / Ebony / Kids Kemp for an apparel manufacturer. Purchase : Not for consumption but for business. Market characteristics : Very few of them and they are big in size and have centralized purchasing. Product characteristics : Specific private labels. Buyer characteristics : Technical evaluation / rational process / multiple buying influencers. Understanding Industrial markets

15. A big reseller can be treated as a Industrial Buyer Example: Shoppers Stop / Ebony / Kids Kemp for an apparel manufacturer . Channel characteristics : Direct service by the manufacturer. Price characteristics : Very hard on negotiation, if they get better price, it straight goes to profits. Economics of demand : Based on actual consumer off-take of the products and hence derived. If one design clicks, it is stocked more in anticipation. Understanding Industrial markets

18. Organizational Customer Type of purchasing organization Institutions ( Private & Public Sector ) 1. Tisco giving its workers, watches as Diwali gifts. 2. XIM-B purchasing air-conditioners for faculty offices. 3. DSP cooperative buying suitcases for their members. Characteristics : Normally one time deals, large orders, less of technical evaluation, non – specialist buyers. Understanding Industrial markets

26. Industrial Marketing Environment Buyer Seller Interface Publics Macro Environment Govt. influences Understanding Industrial markets

27. Industrial Marketing Environment Buyer seller interface Labour Capital R.M. Components Equipment Mafg. Dist. / Dlrs. Compt. Manufacturer’ rep Dist / Dlrs Transporters Warehousing firms Mktg. Research firms Bankers & insurers Suppliers Buyers Facilitators Market segments Govt. Commercial Enterprises Industrial Distributors Understanding Industrial markets

33. Environment Management Strategies Independent Strategies 2. Competitive pacification a. Improved competitive relations - (Auto companies do not fight on discount to trade @4%, they do not spoil the trade, focus on end users ). b. Industry promotion – Doodh, Egg & LPG campaign. ( Increase the pie rather than fight for the same pie). c. Price Umbrella’s – The transporter’s union finalizing rates for each destination ex- Mohali. Understanding Industrial markets

34. Environment Management Strategies Independent Strategies 3. Building Public Opinion a. Corporate Image advertising – ISO 9000 Accreditation. b. Voluntary environmental control – ISO 14000 Accreditation Making green products & advertising it. c. Commitment to interest groups – Archies cards giving part of institutional revenue to fund the NGO’s. This help them charge higher & get business. Understanding Industrial markets

35. Environment Management Strategies Independent Strategies 4. Political / Legal a. Directly lobbying with the govt. & law enforcers. Steel Industries lobbying for more development work, reduction in excise etc. b. Issue advertising through the direct paid media or even influencing the media to highlight the issue ( may or may not be funded directly ). Understanding Industrial markets

36. Environment Management Strategies Co-operative strategies a. Contracting : Allwyn is part of Electrolux, but supplies refrigerators to LG. b. Co-optation : Absorption of relevant Publics on board of directors. IIMC & XLRI directors in the board of directors of XIM. c. Coalition : Industry association ( Specially used to lobby with the government ) FMA decision to have max 7 years warrantee on fans. Understanding Industrial markets

37. Environment Management Strategies Strategic Maneuvering a. Domain Selection : Focusing on areas of strong competitive advantage. Cray  Supercomputers ICI Worldwide  Light chemicals with high margins. b. Diversification : Reliance into telecom sector. May be the idea is to be part of a high growth industry which has good future potential. Understanding Industrial markets