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Industrial marketing which some marketing experts Fred Webster and Jerry Wind have described as a Sleeping Giant, has been the subject of very little research. Despite the fact that it generates higher volumes of sales than consumer marketing.

Technology has become the comers tone of industrial marketing. New product technologies are emerging and manufacturing processes are evolving. Information technology is being leveraged to develop new products and services, in addition to streamlining operations.

Internet has revolutionized industrial marketing. It has helped bring down the communication costs. E-procurement and e-marketplaces have gained popularity among organizational buyers.

Nature of competition has undergone a sea change in the industrial marketplace. Industrial marketing has reached a stage where we can say, The Business Network is the Business Strategy. Today, competition is between valuechain partnerships rather than between industrial firms.

Industrial marketing is the marketing of products and services to business organizations. Business firms buy products and services to satisfy many objectives like production of goods and services, making profits, reducing costs, and so on. Opposite to consumer marketing is the marketing of products and services for their own consumption. It includes manufacturing companies, government undertakings, private sector organizations, educational institutions, hospitals, distributors, and dealers.

Industrial marketing consists of all activities involved in the marketing of products and services to organizations (i.e., commercial enterprises, profit and not-for-profit institution, government agencies and resellers) that use products and services in the production of consumer or industrial goods and services, and to facilitate the operation of their enterprises.

Areas

Industrial Markets

Consumer Markets

Market Geographically Characteristics concentrated Relatively fewer buyers

Product Customized Characteristics products technically complex Large quantities or high value items are involved. Service is a strategic tool, having high importance

Geographically disbursed Mass markets

Standardized products Small unit of sale Service is somewhat important

Areas Nature of demand Price

Industrial Markets

Consumer Markets

Derived (it is depend Direct upon consumer goods) Complex pricing policies Products can be leased Competitive bidding Every transaction is important for an industrial marketer Simple pricing policies Products can be leased List price selling Single transaction may not influence profit margin

Areas

Industrial Markets

Consumer Markets

Service Service, timely Characteristics delivery and

availability very important

Service, delivery, and availability somewhat important

Channel distribution

More direct Indirect Fewer Multiple layers of intermediaries/m intermediaries iddlemen

Emphasis on advertising and sales promotion

Promotional Emphasis on Characteristics personal selling

Areas

Industrial Markets

Consumer Markets Involvement of family members Purchase decisions are mostly made on physiological/social/ps ychological needs Less technical expertise Non-personal relationship

Buyer Involvement of various Behaviour functional areas in both buyer and supplier firms Purchase decisions are mainly made on rational/performance basis Technical expertise Stable interpersonal relationship between buyers and sellers

Areas
Decision Making

Industrial Markets Quality is checked by the customer Informed buyer Customer is a professional in decision making Less emotion involved in decision making Customers take impersonal decisions More number of influencers More emphasis is placed on negotiation skills and the negotiation process is time

Consumer Markets Few quality tests are conducted by the consumers Relatively ignorant buyers Consumer is relatively an amateur in decision making Irrational decisions are possible Emotion is present in decision making Consumers take personal decisions Negotiation is less important

Demand characteristics:The nature of demand for industrial products is derived, i.e. demand for industrial goods depends on the demand for consumer goods.

Market Characteristics:While the number of customers of consumer products and services is very large, the number of customers of industrial products and services is very small. But this small number of customers is responsible for large scale as well as repetitive buying.

Product Characteristics:Industrial products include both standardized and tailor-made products. Standardized products are manufactured on the basis of specifications developed by manufactures of products and services and meant for general use and application. Tailor products are those that are manufactured to customer designed specifications. They are very complex and technical.

Price Characteristics:
For standardized industrial products, Prices are governed by price list. Customers negotiate on these prices and get a better deal. Commercial terms & conditions such as payment terms, delivery terms, delivery schedules, delivery, quantity per shipment, fright and insurance are negotiated. Many firms and public sector follow a system of Rate Contract wherein the price of products and terms of business are fixed for a specific period of time.

Promotion characteristics:
Product characteristics that industrial marketing calls for a close and sustained preand post-sale interaction between suppliers and customers. This can be achieve through strong personal selling. The role of advertising and sales promotion are either to make customers aware or remind them about purchasing becomes redundant (unnecessary) in industrial marketing.

Behaviour characteristics: Industrial buyers are knowledgeable, technically sound and skilled in negotiations. They need good pre-sales and post-sales support from the suppliers. Pre-sales: Is in the form of providing timely technical details and drawings, making suggestions, prompt handling of their queries or clarifying their doubts, timely submission of offers etc. Post-sales: It includes courtesy calls, informing customers of changes in design, company news, advice to buy spares, timely supply of spares and service and training.

Decision making unit in B2B, markets is highly complex or at least it has the potential to be so. Ordering products for low value and low risk (paper clips)may well be the responsibility of the office junior. However purchase of a new plant that is vital to a business may involve a large team who makes their decision over a protracted period.

 Buyers

as more rational than their consumer . B2B buyers has to make a profit each month. They are buying a product for the purpose of ROI (return on investment). B2B buyers buy products What they want, not what they Need.

Purchase of an industrial product frequently requires a qualified expert. Industrial products, frequently have to be integrated into wider systems and as a results have very specific requirements and need intimate, expert examination and modification.

It is difficult to imagine a turbine manufacturer or commercial website design buyer having a look at three or four products and then choosing on simply because it looks nice. No, It involved a whole host of technical, productivity and safety issues, whilst the choice of website might be based on its integration into a wider marketing campaign.

Behavioral or needs vary less than that of a consumer audience. Whims (impulse), insecurities, indulgences (excess)and so on are far less likely to come to the buyers mind when the purchase is for a place of work rather than for oneself, the buying decision involves numerous colleagues, work place norms, time etc. Need based segments: Price-focused segment Quality and brand-focused segment Service-focused segment A partnership-focused segment

The important features of B2B markets is the importance of personal relationship. A small customer base that buys regularly from the B2B supplier is relatively easy to talk. Sales and technical representatives visit the customers. People are on first name terms. Personal relationships and trust develop. It is not unusual for a B2B supplier to have customers that have been loyal and committed for many years.

Shift form sellers market to buyers market: Many industrial products such as steel, cement, transport vehicles, turbines, telephone cables, tractors, computer hardware, several bulk drugs and chemicals and the like, Indian markets have now turned from sellers market to buyers market. This has happen due to rise in production, excess capacity in certain sectors and liberal imports. Become more conscious about quality and cost. Customer orientation is a consequences of shift in the demand supply situation.

A concept of application engineering (identifying new application of the existing products is emerging fast in this sector. Improved product quality: quality assurance rather than quality control has become the order of the day. ISO 9000 certification is an indicator of growing industrial concern. About 85% production in industrial machines and machine tool sectors in India is now from the ISO 9000 certified firms.(According to J.S. Panwar, Beyond Consumer Marketing)

Up gradation of technology: In order to improve quality and reduce cost many firms have upgraded their systems and technologies. Steel Authority of India (SAIL), earmarked 210 billion to be spent between 1994 and AD 2001 for modernization of its plants, which the firm has already spent in its first phase of modernization completed 1994. Tisco has spent Rs. 50 billions to modern to modernize its Jamshedpur plant.

Customer service: service has become a thrust area for several well-known industrial firms in the country. Some lesser known firms have been benchmarking themselves against the service quality of Xerox, Wipro and Toyota. Firms like Kirolskar Engines, Lucas- TVS, Cummins Ltd, Larsen & Toubro (L&T) and Xerox are setting examples with their In service lies success motto.

Increased Marketing Interaction with R&D: Firms are trying to produce more user friendly goods with the help of inputs from marketing. Relationship Marketing: Industrial marketing is building relationship with the consumer and dealers. Trust is an integral part of buyers decision on making major investments in the sellers products, so it has to be first priority of the marketer.

Diversification: Firms are seeking

diversification mainly to become multiproduct, multi-market organizations and exploit the untapped opportunities that exist in the allied on new areas. Some of the examples of successful diversification of Indian firms are listed below:-

Escorts-the manufacturer of tractors, bikes, shock absorbers, railway coupling equipment, etc., have ventured into production of floating dry docks. Sunderam Clayton, manufacturers of automobile ancillaries, air brake systems, etc., are now moving into railway signal equipment manufacturing. BPL-Sanyo, better known as an entertainment electronics and home appliances firm is now moving into high-reach satellite communication equipment and diagnostic systems.

Reliance Industries has successfully diversified into telecommunication business.

Telco (now Tata Motors) has diversified into passenger car segment. Videocon is entering into real estate and construction business.

Nirma chemicals setting up turnkey power projects in Gujarat.

Diversification might improve the bottom lines of firms if they do their homework well and support new products with sound marketing strategies.

Top management persons: It consists of managing director, director, president, vice-president or general manager. Technical persons (or functions) The technical persons are design engineers, production manager, maintenance manger, quality control manager, R&D manager, and industrial engineers.

Buyers/purchasers (or purchase/Materials Department): They are senior executives or mangers or purchase officers or assistants. They coordinate with technical persons, top management, accounts or finance person in organization. Accounts/Finance persons (or Department):While finalizing commercial terms such as modes of payment, assurance of bank guarantees, financial approval of capital purchases, issuing payments to suppliers, and so on plays a very important role.

Marketing function: When a purchase decision has an impact on the marketability of a firms product, marketing people become influencers in the buying decision process.

E.g.: A firm manufacturing and marketing electric motors had a change its packing due to damages caused to the product in transportation. This in turn affected the satisfaction level of the customers.

Thank You