ASSIGNMENT 1 :-Q1)Define B2B ?Ans. It (BUSINESS 2 BUSINESS) is defined as thetransactions that take place from one companyconducting commerce with another company.Example:- transaction between manufacturer andwholesaler or between a wholesaler or retailer.Q2)Explain the nature and characterstics of industrialmarketing ?Ans.Industrial marketing may be defined as themarketing of prdoucts,services, and solutions toorganizations such as big enterprises,govtdepartments,and institutions. It is also called as B2Bmarketing or organizational marketing.NATURE:- The concept of industrial marketing is used to describe marketing activities targeted at all individuals and organisations that acquire products and services that are used in the production of other products and services.
Justification for creating industrial marketing as a specific field of study in marketing derives from the awareness that the market behaviour, which affects the demand and purchases of industrial products and services. The demand for industrial products is a derived demand. The purchasing process of industrial products is also relatively more complex. The industrial products are funded with organisational resources.CHARACTERSTICS :- 1) Demand Characteristics:- The nature of demand for industrial products is derived ie demand for industrial goods depends on the demand for consumer goods.The relation between consumer and industrial goods may be clarified by following illustration: In 2004 and 2005 the demand for various types of cars continued to increase. Manufacturers could meet its demand by increasing their production figures.Increase in the production was achieved first
by improving the capacity utilization, increasing theno. of shifts and thereafter by capacityaugmentation by adding machine tools and otheequipments etc. Thus it is seen that increase indemand for consumer goods resulted in increase indemand for industrial products.2)Market characterstics:- Industrial markets differsfrom consumer markets in size of the market ornumber of consumers and location of the market.While the number of customers of consumerproducts and services is very large, the number ofcustomers of industrial products and services is verysmall.Consumer markets are widely scatteredwhereas industrial markets are concentrated inspecific geographical areas. The marketingimplication of this is that it is easy to reach andservice those customers at low cost.3)Product Characterstics:-Industrial products includeboth standardized and tailor made products.Boththe product groups are definitely more technical andcomplex as compared to consumer products andservices.Industrial customers require a lot of pre-sales and post sales support from their suppliers.
Their requirements of timely service level is veryhigh.4)Price Characteristics:-Generally, for standardizedindustrial products, prices are governed by pricelists.However customers negotiate on these pricesand get a better deal. In case of custom bulitproducts there can be no list of prices. A supplierestimates the cost of a product, adds the overheadcomponent and the desire margin and comes to theprice.5)Place or distribution characteristics:-Channellengths in industrial marketing are short and in manycase direct.The marketing implication for this is thesimplified distribution functions.6)Promotion characteristics:-The role of advertisingeither to make customers aware or remind themabout purchasing becomes redundant in industrialmarketing. All purchases are task driven, they arenot going to buy merely because a promotionalmeasure is adopted by suppliers. Thus the role ofsales promotion is restricted.7)Behavior characteristics:-Industrial buyers areknowledgeable, technically sound and skilled in
negotiations. They are rational buyers driven by task motives. They need good pre sales and post sales support from the suppliers.A few companies conduct free training of operators, mechanics, and engineers employed by its customers. This also ensures that these personnel use and maintain the equipment well.Question no. 3 (Continued in next page)
Q3)Differntiate between consumer goods and industrialgoods with example CONSUMER GOODS INDUSTRIAL GOODS They are are those They are those which are which are meant for not used by the consumers final consumption directly but these goods are by the consumer used for the production of consumer goods. The number of The number of customers customers for for industrial goods is less consumer good are but they purchase the very large but the quantities in bulk. quantity purchased by them is less The demand for The demand for industrial consumer goods is goods is derived demand autonomous as these industrial goods demand as these are used for the production goods are of consumer goods. demanded for ultimate consumption
The market in In case of Industrial goodswhich the the market is smallcompanies can sell because of less number ofconsumer goods is buyers of such goods.large because oflarge number ofcustomers.They can be divided They can be divided into 5into following subcatoegories:- subcateogories:- Industrial supplies,Shopping goods, installations,fabricatedSpecialitygoods and materials and parts,accesoryconvenience goods equipment,raw materialsExamples:-Bread, Examples:-lubricants,soap ,furniture etc copper, timber, tools etc