(A) What is Industrial (Business) marketing? It is marketing of products / Services to business firms.

. In contrast consumer marketing is marketing products / services to individuals & households.

(B) What is the difference between industrial marketing, B2B marketing, Business marketing & Organizational Marketing?

(C) What are the differences between Industrial &

No Difference!

Consumer Marketing? Basic tasks of marketing are same difference Exists in the characteristics shown next.

Derived Demand The demand for industrial products & services does not exist by itself. It is derived from the ultimate demand for consumer goods & services. Industrial customers buy goods & services for use in producing other goods & services. Joint Demand Joint demand occurs when one industrial product is useful if other product also exists. Cross-Elasticity Demand
Demand for furniture

Demand for new homes

Deman d for wood

Deman d for pen

Deman d for ink

Demand is elastic if the %age change in quantity demanded is more than the %age change in price.
Cross elasticity of demand is the responsiveness of the sales of one product to a price change in another product.

Price of Tea

Explain the economics of industrial demand, with suitable examples. Minimum two examples should be citied in each category.

 Resellers,

like industrial firms, do not purchase goods and services for personal consumption, but so to facilitate the operations of the business. That is everything that is purchased is purchased to make a profit .

Brief out the resellers market with following characteristics. Market Product Buyer Channel Promotional Price

Industrial distributors / dealers

Business / Industrial customers

Original equipment manufacturers

Users
Public sector units Govt. undertakings

Public institutions
Private institutions

Govt. hospitals, prisons Schools, colleges

Manufacturing units Non-manufacturing units

Maharashtra Sugar Cooperative Society

Cooperative banks, housing cooperative societies

Industrial products & services

i.

ii.

iii.

For Materials & Parts, Direct selling is done to large OEMs (Original Equipment Manufacturers) and users, but indirect selling through industrial distributors / dealers becomes cost effective for smaller volume OEMs and users. For Capital items, Direct selling through company sales force is common, with extensive interactions on technical & commercial factors. For Supplies Industrial distributors / dealers are mostly used but for marketing of services, word-of-mouth plays an important marketing role, with quality & price of service as key factors.

Supply Chain Management orientation Buying Orientation

Raw Material Supplier
Component & subassembly suppliers Finally assembly manufacturer

Intermediaries

Consumers

Procurement Orientation

Purchasing firm with buying orientation has narrow and short term focus. The buyers, in these firms, follow the practices under.. Lowest price Gain power Risk

Purchasing firm has a strategic focus and it is proactive, to achieve these objectives the company adopts following practices. Collaborative relationship with major suppliers. Working closely with other functional areas

Role of purchasing is further expanded to become more value-adding, and strategic operations. It focuses on Deliver Value to end users Outsource Non-core activities Support Collaborative Relationships with major suppliers

Goods & services are purchased by commercial enterprises depends on the nature of the business, the size of the firm, and the volume, variety, and technical complexity of the products purchased. The major tasks or activities in purchasing process are
Identifying the potential suppliers Negotiating & selecting suppliers Ensuring right quality & quantity of materials & right time A long term business relationship with the suppliers

Multiple influencers Technical sophistication Value analysis:

Value analysis involves systematized techniques for reducing costs and improving the performance value of materials, components, and manufacturing processes

Value analysis, as developed by General Electric,

Selection Information gathering Function definition Generation of alternatives Evaluation of Alternatives Presentation Implementation

 Widely dispersed markets

Complicated procurement laws Understanding government contracts Competitive Bidding Closed bidding/Sealed Bidding Open Bidding/ Open Tender Reverse Bidding Government Contracts Fixed Price Contact Cost-reimbursement Contract

Includes the practices of Commercial enterprises and Government.

Industrial Buyers and Suppliers operate in dynamic environment which changes continuously. Much emphasis discussion on environment are about ecological environment like air, water pollution & conserving natural resources.

Environment

Internal (S&W)
Location, R&D, Production facilities, HR, Finance, Marketing, Brand

External (O&T)

Macro

Micro

 Micro: Affects a particular firm Customers Competitors Suppliers Macro: Affects all the firms Economic Demographic Natural Technological Government, political, legal Cultural & social Public

Effective use of market variable such as 4Ps are not adequate for the survival & success of firms. Following steps are needful for the dynamic in nature and they are..
1. 2. 3.

Collecting information on customers & competitors Analyzing trade and govt publications. Carrying Market Research & Economic forecasting within or consultancy

 Understanding

changes in customers Monitor the competitors actions & strategies. Technological innovations Changes in TEMPLE effect Identify the demand of the customers and market. Changes in environmental factors

Independent

strategies Cooperative strategies Strategic planning

Backward integration Forward integration Horizontal integration