Industrial Marketing consists of allactivities involved in the marketing ofproducts and services toorganizations( i.e., commercial enterprise, profit and not-for-proft-institutions , governmentagencies, and resellers)that use products and services inproduction of consumer or industrial goodsand services and to facilitate the operationof their enterprises 2
! Contrasts WAS IS Tall Towers Low-rises Paper Silicon Meetings ad nausean eGroups as neededPlanning,planning, planning Doing.Testing.Adjusting.Fast. We worship Stability We groove on Wild & Wacky “Mind my rank” “Mind my ability to contribute”Ninety percent of all work is Microprocessors do most drudge work drudge workWorkin’ with the “same old Constantly expanding one’s 3 gang” network of teammates
! Contrasts WAS IS Well-defines Shifting organizational organizational borders alliancesProducts last for Products last for years weeks Accounting Innovation Employees Talent 4
Industrial versus Consumer Marketing Industrial Markets Consumer MarketsMarket •Geographically •GeographicallyStructure concentrated dispersed •Relatively few buyers •Mass markets •Oligopolistic •Monopolistic Competition CompetitionProducts •Technical complexity •Standardized •Customized •Service, delivery and availability •Service, delivery and important availability very important 5
Industrial versus Consumer Marketing Industrial Markets Consumer MarketsDecision •Distinct, observable •Unobservable,making stages mental stagesChannels •Shorter, more direct, •Indirect, multiple fewer linkages linkagesPromotion •Emphasis on •Emphasis on personal selling advertisingPricing •Competitive bidding, •List prices negotiating on complex purchases •List price on standard 7 items
Value Creation Selling1 You as a seller and your organization devote large amounts of time and energy.3 You use capabilities and tools that you’ve never used before to understand how your customers do business and how you can help them improve that business.5 You’re going to make it your business to know not only your customers but also your customers customers.
Economies of Industrial DemandDerived Demand : is the single most importantforce in the marketing of industrial goods andservices.Joint Demand : It occurs when one product requiresthe existence of others to be useful.Cross Elasticity of Demand : Responsiveness of thesales of one product o a price change in another
The Process Exchange in the Industrial Market Product QualityExchange Maintenance CustomersSuppliers Service
The Process Exchange in the Industrial MarketInformation Technical Exchange Economics Customers Suppliers
The Process Exchange in the Industrial MarketFinancial CreditExchange Leasing CustomersSuppliers
The Process Exchange in the Industrial Market Social TrustExchange Interpersonal CustomersSuppliers Relationship
The Reseller’s MarketResellers purchase goods and services to facilitate theoperation of their businesses.Everything that is purchased is purchased to make profit.Wholesalers and retailers are treated as a n element of themarketing mix (place or distribution) rather than asserved market.These firms represent a sizable and important BuyingGroup whose behavior is similar to Industrial Buyers
Marketing Strategies over Various Buying Situations & PhasesPhases New Task Modified RebuyProblem Anticipate problem; In supplier; maintainRecognition quality/service use advertising and standards : out creative people to supplier :watch for convince buyers of developing trends problem-solving capabilitiesSolution Provide detailed In supplier and outDetermination products/service supplier : stress information to capability, reliability, decision makers and problem solving capabilities 22
Marketing Strategies over Various Buying Situations & PhasesPhases New Task Modified RebuyDetermining Provide detailed In supplier and outneeded item product/service supplier : stress information to capability, decision makers reliability, and problem solving capabilitiesSearching for In supplier : In supplier : watchand maintain for problems ;qualifying dependability; out supplier :supplier out supplier : demonstrate ability demonstrate ability to perform task23 to perform task
Marketing Strategies over Various Buying Situations & PhasesPhases New Task Modified RebuyAnalyzing Understands details Understands detailsproposals of customer of customer problem/needs ; problem/needs ; make timely make timely proposals proposals 24
Marketing Strategies over Various Buying Situations & PhasesPhases Straight RebuyProblem In supplier : maintain close relationship withRecognition users and buyers; Out suppliers : convince firm to reexamine alternativesSolution Same as phase 1Determination 25
Marketing Strategies over Various Buying Situations & PhasesPhases Straight RebuyDetermining Same as phase 1needed itemSearching for Same as phase 1and qualifyingsupplierAnalyzing Make timely proposalproposals 26
Conflicts Marketing /Engineering Marketing Engineering Responses ResponsesNew They don’t give us We’re limited in whatProducts products we can we can design becauseDesign sell. we have to keep it simple for marketing By the time we get them to design they are obsolete.Breadth We need more We have too muchof the variety variety now.Product 27Line
Conflicts Marketing /Engineering Marketing Engineering Responses ResponsesProduct •Our line looks so •Our line does not needAppearanc inferior a lot of fancy windowe dressingProduct •Why can’t •Neither the customerProblems engineering nor our marketing make workable department understand products the product and how it is supposed to work. 28
Conflicts Marketing /Engineering Marketing Engineering Responses ResponsesProduct •The information •The information thatPromotion we get from marketing includes is so engineering is so exaggerated. We could dull and technical get sued for false that no one would advertising. read it 29
Conflicts Marketing /Engineering Marketing Engineering Responses ResponsesPackaging It looks so cheap Trying to package so & functions so many products and hold poorly that it costs down is extremely makes our difficult. products hard to sell.Quality Why can’t we We must design so have reasonable many products with costs. numerous options that it is hard to maintain quality and keep costs 30 down.
Conflicts Marketing /Engineering Marketing Engineering Responses ResponsesTechnical We need a We don’t have enough technical expert to manpower to hold the soothe customers hand of some pet even they really customers of marketing do not have a problemWarranty Engineering Marketing wants us to always goes by pay the full amount of the book, they every claim, even an don’t understand invalid one that you have to 31 bend a little.