Understanding Industrial

Markets :
It’s Nature, Systems and
Environment
 Value Chain Flow
Raw Material, Spare Parts and
Semi finished Material

Manufacturing
Industries
OEM --- Other Indust.

Sale of Capital Goods, Supplies and

Consumer Goods to Households,
Govt., Business & Insts. And Exporters
 Nature of Industrial
Marketing

Three Broad Divisions of Economy

Manufacturing
Extractive Consuming
And Allied
Industries Units
Industries
 Product Flow Diagram
Manufacturing
And Allied
Consuming
Industries
Extractive Units
Industries
Households
Manufacture/
Farms
Setup/Create/
Govt.
Sale to
Mines
Other
Other
Manufactures
Forests Business
Users
Fisheries
Exporters
 ENVIRONMENAL TIERS

Customers

Macro Internal Macro

Competitors
Industry
 Types of Environment

 Ecological and physical

- Air and Water Pollution
- Solid Waste Disposal
- Conserving Natural Resources
 Internal
 External
- Micro
- Macro
MICRO / MACRO ENVIRONMENT

Suppliers Substitutes

COMPANY
Rival Firms Buyers

New Entrants
 Government’s Role
 Regulating Agencies
 Laws / Policies
 Programme Funding
 Research Funding
 Import / Export Regulation
 Levying Taxes
 Controlling Interest Rates
 Providing Social Programmes
 Environment Scanning
 Gathering and Monitoring
Information
 On Customers and Competitors
through Marketing and Sales Staff
 Analyzing Trade and Govt.
Publications
 Carrying out Market Research
and Market Forecasting
 Environment Monitoring

 Understand Changes in Customer

Needs
 Monitor Competitors’ Actions and
Strategies
 Identify Technological Innovations
 Changes in Govt. Policies, Laws
 Changes in Major Customers and
the Total Market
 Changes in Environmental Factors
 Gordon E.Miracle’s
Qualitative Categorization
Cost of Product VL L M H VH
Significance to VL L M H VH
The Buyer
Technical VL L M H VH
Complexity
Technological VL L M H VH
Change Frequency

After Sales VL L M H VH
Service
 Gordon E.Miracle’s
Qualitative Categorization
Purchase VL L M H VH
Frequency
Speed or Rate VL L M H VH
of Usage

Variety of Needs VL L M H VH
to be Satisfied
Extent of Efforts VL L M H VH
to Get the Product
 Some Examples
 Very Low Iron Ore, Coal, Lime Stone
 Low Alumina, Pig Iron,
Kerosene Oil
 Medium Tire and Tubes
 High Motors, Compressors,
Pumps, Bulldozers
 Very High Fork Lifts, Lathe Machines,
Fabricated and Capital
Equipments, Software
 Classification of Industrial
Products
 Major Equipments and materials
 Accessory Equipments
 Fabricating or Component Parts
 Process Material
 Operating Supplies
 Operating services
 Major Equipments and
Materials
● Large Machines or Other Tools
● Charged to Capital Account

● Two types :-
1. Multipurpose or Standard
machines example Dyes in
Stamping Machine
2. Special Duty or Single Purpose
Machine : Grinding Machine
 Accessory Equipments

● Machinery used in Auxiliary Capacity

● Cost is Generally Charged to Current
Expenses
● Horizontal Demand
Small lathe
Fractional Horse power motors
Small Tractors
Fork Lifts
 Fabricating or Component Parts

The work is carried on by a series of

plants, often under diverse ownership,
each performing a single operation or
homogeneous group of operations on the
material.
Example:-
Batteries and tires in automobile
industry
 Fabricating or Component Parts

● On the Basis of Specifications

● Long Term Supply Commitment
● Uniformity and Reliability of Quality
● Strict Delivery Schedule
● Retain Their Identity in Finished
Products
● Large Replacement Market
 Process Material

Form an Un-Distinguished Part of

Finished Product
Broken up and Dissipated in the
Production Process
Catalyst
Binding agents
Flavours
Preservatives
 Operating Supplies

Do not Become Part of Finished Product

Continuously Worn out or Used up
Needed by Many Different Industries
Bought in Small Quantities
Purchased in a Routine Manner
Standardized
MRO (Maintenance, Repair and
Operating) Items
Operating Supplies

Paints
Soaps
Oils
Greases
Pencils
Type Writer
Stationary paper etc
 Operating services

Building Maintenance

Auditing

Legal Services

Courier Services etc

Major Industrial Suppliers

 Machine Tool Manufacturers

 Mill Industries – Steel, Aluminum,
Pulp, Copper
 Processing Plants, Refineries
 Fabricators, Spare Part Suppliers
 Industrial Service Organizations
Thank You