M B A M a r k e t i n g I n d u s t r i a l M a r k e t i n g it was failing at the shop floor operations. The customer, therefore, not onl yr e t u r n e d t h e e n t i r e r e j e c t i o n s b u t a l s o c a n c e l l e d t h e b a l a n c e o r d e r s .

Subsequently, other competitors supplied the p r o d u c t a s p e r t h e n e e d s a n d specifications of the customer, who placed o r d e r s w i t h t h e m . A s c o m p a r e d t o consumer marketing, industrial customers place a greater importance on service,t h a t i s , t i m e l i n e s s , c e r t a i n l y d e l i v e r y o r a v a i l a b i l i t y o f p r o d u c t , b e c a u s e a n y delay in supply will have a significant impact on the production or operations. 1.4.3BuyerBehaviour I n i n d u s t r i a l m a r k e t i n g , t h e b u yi n g p r o c e s s i s m o r e d i f f i c u l t a s c o m p a r e d t o consumer marketing. The purchase decisions in industrial marketing are basedon many factors, such as compliance with product specifications product quality,availability, timely supply, acceptable payment and other commercial terms coste f f e c t i v e n e s s , a f t e r s a l e s s e r v i c e , a n d s o o n r a t h e r t h a n o n s o c i a l a n d p s yc h o logical needs. The bu ying decisions generally take a longer time andinvolve many individuals from technical, commercial/materials, and fi n a n c e departments. After the initial offer made by a seller, there are negotiations andexchange of information between the specialists and rep resentatives from boththe buyer and the seller organisations. Therefore, inter -organisational contactst a k e p l a c e a n d i n t e r p e r s o n a l r e l a t i o n s h i p s a r e d e v e l o p e d . T h e r e l a t i o n s h i p s between the sellers and buyers are highly valued and they become stable in thel o n g r u n b e c a u s e o f a h i g h d e g r e e o f i n t e r d e p e n d e n c e . C h a n g e s a r e f e w a n d occur relatively slowly. Buyers charge problems in searching out and qualifyings u p p l i e r s . T h e c o s t o f s e l e c t i n g a s u p p l i e r w h o c a n n o t m e e t d e l i v e r y requirements or who delivers an unsatisfactory product can be high. Thus, thep u r c h a s i n g f i r m m u s t b e c e r t a i n o f a p o t e n t i a l s u p p l i e r s t e c h n i c a l , administrative, and financial capabilities.In contrary, in consumer marketing the relationship between a buyer and a seller i s n o n - p e r s o n a l . Consumers change their purchasing habits frequently and the AcroPDF - A Quality PDF Writer and PDF Converter to create PDF files. To remove the line, buy a license. M B A M a r k e t i n g I n d u s t r i a l M a r k e t i n g b u yi n g d e c i s i o n s a r e a l w a ys b a s e d o n p h ys i o l o g i c a l , s o c i a l a n d p s y c h o l o g i c a l needs of the members of a family household. 1.4.4ChannelCharacteristics

Inventory or stock control is very much important factor in t h e b u s i n e s s organisations therefore the distribution channels are needed more direct from them a n u f a c t u r e r t o t h e c u s t o m e r i n i n d u s t r i a l m a r k e t i n g . T h e r e are a few channela l t e r n a t i v e s , w h i c h a r e f e a s i b l e i n t h e i n d u s t r i a l m a r k e t t h a n t h e c o n s u m e r market as shown in Figure 1.1. Figure1.1: Channel distributioninIndustrial andConsumermr eI n d u s t r i a l akt M a r k e t C o n s u m e r M a r k e t Often, the manufacturers use their own sales/marketing personnels to sell thep r o d u c t s d i r e c t l y t o m a j o r c u s t o m e r s . B u t , i n c a s e o f s e l l i n g t o s m a l l - s c a l e customers or geographically scattered markets, many manufacturers use eitherdistributors/dealers, or agents/representatives, which also helps in minimisingthe cost of marketing.I n c a s e o f c o n s u m e r m a r k e t i n g , t h e c h a n n e l o f d i s t r i bution is longer with Pdc ru oe r Sales forceRepresentatives Pdc ru oe r S a l e s f o r c e R e p r e s e n t a t i v e D i s t r i b u t o r D i s t r i b u t o r W h o l e s a l e r W h o l e s a l e r RetailerC ustomerC u s t o m e r C u s t o m e r CustomerCustomerCustomerCustomerRet ailerRetailerRetailer AcroPDF - A Quality PDF Writer and PDF Converter to create PDF files. To remove the line, buy a license.

M B A i n g I n d u s t r i a l M a r k e t i n g multiple levels of intermediaries/middlemen, since the household consumers aregeographically dispersed all over the country. 1.4.5P romotionalCharacteristics In consumer marketing, the emphasis is given on advertising wher e a s , i n industrial (or business) marketing, the importance is given to the personal sellingt h r o u g h t h e c o m p a n y s s a l e s f o r c e . A s a r e s u l t , a m u c h l a r g e r e x p e n d i t u r e budget is provided for advertising in consumer marketing in comparison toindustrial marketing. Advertising is used to lay a foundation for the sales callrather than serve as the primary c o m m u n i c a t i o n t o o l . S a l e s p e o p l e a c t m o r e a s consultants and technical problem solvers, utilizing in-depth product knowledgeand technical understanding of the buyers needs, whereas industrial advertising n o r m a l l y s t r e s s e s m o r e factual and technical data. Some industrial advertisersuse television to r e a c h p o t e n t i a l c o n s u m e r s , t h e p r i m a r y m e a n s o f r e a c h i n g t h e market is through business magazines, traditional trade journals, and direct mail.Sales promotion activities tend to center on trade shows, trade fairs, catalogs andconducting technical seminars. 1.4.6 PriceCharacteristics The products are sold through the intermediaries/middlemen to the consumersb a s e d o n t h e P r i c e L i s t o f t h e m a n u f a c t u r e r o r t h e m a x imum retail price(MRP) for the packaged products in consumer ma r k e t i n g . S o m e t i m e s , t h e retailer reduces the price b y passing on to the c o n s u m e r a p a r t o f h i s d i s c o u n t due to different degrees of intensity of the competition. In industrial marketing,p r i c e i s l e s s c r i t i c a l f a c t o r s f o r p u r c h a s e d e c i s i o n s . C o m p e t i t i v e bidding andp r i c e n e g o t i a t i o n s a r e v e r y c o m m o n i n i n d u s t r i a l m a r k e t i n g a n d f i n a n c i n g arrangements are often considered part of pricing p a c k a g e . W h e n t h e r e a r e n o price negotiations in certain Government tenders, the competitive bidding (i.e.quoting a competitive price against a tender enquiry) becomes very important, asonly the lowest bidders are considered for placement of orders. Almost private AcroPDF - A Quality PDF Writer and PDF Converter to create PDF files. To remove the line, buy a license. M a r k e t M B A M a r k e t i n g I n d u s t r i a l M a r k e t i n g sector and some Government organisations, price negotiations are held to decide t h e p r i c e s a n d t h e v o l u m e o f o r d e r s t o b e p l a c e d o n v a r i o u s s u p p l i e r f i r m s . T h e p a ym e n t a n d o t h e r c o m m e r c i a l t e r m s a r e a l s o n e g o t i a t e d a t t h e t i m e o f p r i c e negotiation. Dealer discounts, and volume discounts on the price list of standardindustrial products are widely used in industrial

marketing.T h e a b o v e d i s c u s s i o n c l a r i f i e s t h a t t h e r e a r e m a n y b a s i c d i f f e r e n c e s e x i s t between consumer and industrial marketing. But, these d i f f e r e n c e s i n t e r m s c h a r a c t e r i s t i c s d o n o t m a k e a c o m p l e t e a n a l ys i s . Therefore, it is necessary tou n d e r s t a n d t h e c o n c e p t o f i n d u s t r i a l d e m a n d i n t h e m a r k e t t o a n a l y s e completely. 1.5 DEMAND IN INDUSTRIAL MARKET The demand for industrial products and services does not survive by itself. It isderived from the ultimate demand for consumer goods and services. Therefore,i n d u s t r i a l d e m a n d i s c a l l e d d e r i v e d d e m a n d . S o m e t i m e s , t he demand forindustrial product is called joint demand, when the demand for a productdepends upon its use along with the existenc e of other product or products.Cross elasticity of demand exists fo r s o m e s u b s t i t u t e p r o d u c t s i n i n d u s t r i a l market. These concepts are detailed as follows: 1.5.1 DerivedDemand The single most important force in marketing of industrial products and servicesis derived demand. Industrial customers buy goods and services for making theuse in producing other goods and services and finally produced product/servicesold to the consumers. In industrial marketing, the demand for industrial goods a n d s e r v i c e s i s d e r i v e d f r o m c o n s u m e r g o o d s a n d s e r v i c e s . F o r e x a m p l e , t h e demand for precision steel tubes does not exist in market. It is demanded for thep r o d u c t i o n o f b i c yc l e s , m o t o r c yc l e s , s c o o t e r s , a n d f u r n i t u r e ( s t e e l t a b l e s a n d chairs), which are consumed by the consumers. Thus, the demand for precisionsteel tubes is derived from the forecast of consumer demand for bicycles, motorAcroPDF - A Quality PDF Writer and PDF Converter to create PDF files. To remove the line, buy a license. M B A M a r k e t i n g I n d u s t r i a l M a r k e t i n g cycles, scooters, and furniture. In case of capital goods, such as machinery andequipment (e.g. machine tools, textile machinery, leather machinery, etc.) thatare used to produce other goods, the purchases are made not only for the currentr e q u i r e m e n t s , b u t a l s o i n a n t i c i p a t i o n o f p r o f i t ; f o r m t h e f u t u r e u s a g e . I f businessmen of feel that there may be a recession in near future, their purchaseswill be drastically curtailed. On the other hand, if the attitude of businessmen isf a v o u r a b l e ( i . e . t h e y f e e l t h e b u s i n e s s i s o n t h e u p s w i n g ) their investment incapital goods and other industrial products will increase. Thus, the attitude of businessmen is very important, as it reflects the optimism or pessimism aboutt h e f u t u r e . D u r i n g t h e p e r i o d s o f r e c e s s i o n , o r r e d u c e d c o n s u m e r d e m a n d , industrial firms reduce their inventories/stocks, or reduce the production, or dob o t h . O n t h e o t h e r h a n d , d u r i n g t h e p e r i o d o f p r o s p e r i t y, t h e r e i s a n i n c r e a s e d production and sales of consumer goods, which results in an

increased demandfor industrial goods. This may be the right time for price increases and buildingstocks as ready availability and shorter delivery period becomes very important.A n . i n d u s t r i a l m a r k e t i n g f i r m s h o u l d b e i n c l o s e t o u c h e d c u s t o m e r s p u r c h a s e , f i n a n c e , q u a l i t y, R & D a n d m a r k e t i n g d e p a r t m e n t s , s o a s t o g e t i n f o r m a t i o n o n changes in customers sales, new product development, financial condition, andthe quality of its products. 1.5.2JointDemand Joint demand is common in the industrial market because it occurs when o n e industrial product is useful if other product also exists. For example, a pumpsetsc a n n o t b e u s e d f o r p u m p i n g w a t e r , i f t h e e l e c t r i c m o t o r o r d i e s e l engine is nota v a i l a b 1 e . S i m i l a r l y , t h e d e p a r t m e n t o f t e l e c o m m u n i c a t i o n ( D o T), whichrequires a complete kit, consisting of different items, fo r j o i n i n g t h e u n d e r ground telecom cables, cannot buy onl y some of the i t e m s f r o m a s u p p l i e r a s i t does not contented the kit. Thus, some industrial products do not have industriald e m a n d , b u t a r e d e m a n d e d o n l y i f t h e other products are available from the AcroPDF - A Quality PDF Writer and PDF Converter to create PDF files. To remove the line, buy a license.