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INDUSTRIAL MARKETING
Industrial marketing is a primarily B2B sale which means business to
business. It mostly involves the supply and purchase of raw materials for
the manufacture of goods or service. Industrial marketing is best done
with the help of sales representatives as the needs vary from client to
client which should be serviced in a customized way.
Industrial marketing is kind of less complicated as it is easy to identify the
client and set up an appointment with them. Highly professional and
trained people are involved in the purchase of industrial goods. In order to
sell to them, the marketing is done in the form of technical selling where
the sales representative makes an appointment with the prospective
buyer, understands their needs and proposes a solution by which they
could offer their service and closes the deal.
Most of the industrial goods purchase generally involves tendering
process which is rampant in government and few private institutions of
India. The tender process calls for multiple suppliers and the best bid with
low price and satisfying all the necessary requirements of the contract is
awarded the task to supply industrial goods.
Industrial marketing (or business to business marketing) is
the marketing of goods and services by one business to another. Industrial
goods are those an industry uses to produce an end product from one or
more raw materials. Industrial marketing, also known as business-tobusiness (B2B) marketing, is a branch of communications and sales that
specializes in providing goods and services to other businesses, rather
than to individual customers.
Because industrial marketing often involves large orders and long-term
relationships between the producer and client, the process from first pitch
to close of sale is often more complex than the process between a
business and a private customer.
While B2C sales might focus on one-on-one interactions between two
parties, businesses are usually made up of a number of individuals. Before
the product appears on the other store's shelves, the two businesses must
reach a deal that will involve the manufacture, purchase, and shipping of
thousands of products.
Industrial, or business to business (B2B) marketing

Examples of a B2B selling process:

An organization seeks to split the work between the two firms based on an
evaluation of each firm's capabilities.
A sales representative makes an appointment with an organization that
employs 22 people. He demonstrates a photocopier/fax/printer to the
office administrator. After discussing a proposal, the business owner signs
a contract to obtain the machine on a fully maintained rental and
consumables basis, with an upgrade after 2 years.
Differences between industrial market and Consumer Market
Dimensions

Industrial Market

a. Buying objective
b. Buying motive
c. Purchasing function
d. Decision making

Enable production
Mainly rational
Professional buying
Many persons involved,
much discussion
Negotiations, intense
interaction

e. Characteristics
f. Product & market
knowledge
g. Order size
h. Demand
i. Price elasticity
j. Number of customers

Large
Often large
Derived, fluctuation
Rather inelastic
Mostly limited

Consumer Market
Personal need satisfaction
Also emotional
Consumers
Often impulsive, without consulting others
Often without negotiation, little interaction

Limited
Mostly small
Autonomous, relatively stable
Rather elastic
Very large

Industrial Marketing Environment

Industrial buyers and sellers operate in a dynamic environment. One constantly
poising

new

opportunities

and

threats.

The industrial

marketing

environment could be divided into three levels namely the interface level,
the publics level and the macro environment level.
The Interface Level
This involves those key participants who immediately interface with an industrial
firm (buyer or seller) in facilitating production, distribution and purchase of firms
goods and services. Supply inputs are transformed by a company and its
competitors into outputs with added value that move on to the end markets, the
move being made through the firms interface with industrial distributors and

dealers, manufacturers representatives and the companys own sales people.

That move is made possible by a firms interface with facilitating institutions such
as banking, transportation, research and advertising firms.
Participants in the interface level include:

Input supplier Input goods such as the raw materials, labor and capital
are supplied by organizations to industrial firms for use in producing output
goods and services. The survival and success of a firm depend on the
knowledge and relationship with its input suppliers. Interruptions in the flow
of inputs cause repercussions in the entire industry affecting not only
production and marketing plans but also the production and marketing plans
of the suppliers.

Distributors Most organizational buyers buy from five or more industrial

distributors. Industrial distributors, contact potential buyers, negotiate orders,
provide buffer inventories, credit and technical advice to potential buyers.
They are particularly important when joint demand is present because they
bring together the heterogeneous inputs needed for the production of end
products .

Facilitators Advertising agencies and public relations firms provide the

necessary communication flow between the sellers and buyers through the
formulation of meaningful information and media strategies. The use of
advertising in reaching potential buyers and the multitude of buying
influencers is vital in the overall communication strategy. Transportation and
warehouse companies facilitate the free flow of goods that must be delivered
in usable condition to industrial customers and distributors when and where
they are required. When goods are not delivered on time and in usable
solutions, buyers can be forced to shut down production lines. Resources as
they move from the supply inputs to end users must be financed and insured.

Competitors

Competitors

actions

whether

domestic

or

foreign,

ultimately influence the companys choice of target markets, distributors,

product mix, and in fact its entire marketing strategy.

The Publics Level

Publics are distinct groups that have actual or potential interest or impact in each
firms ability to achieve its respective goals. Publics have the ability to help or
hinder a firms effort to serve is markets.

Financial publics Financial institutions such as investments firms and

stock brokerage firms and individual stakeholders invest in an organization on
its ability to return profits. When they become unhappy with the management
or dissatisfied with a companys social polices, they sell their shares.

Independent

press

Industrial

organizations

must

be

accurately

sensitive to the role that the mass media play and how they can affect the
achievement of the marketing objectives. The independent press is capable
of publishing news that can boost or destroy the reputation of a firm as well
as the sales potential of a product.

Public interest groups Industrial marketing decisions are increasingly

affected by public interest groups. Clearly, these various public interest
groups limit the freedom of the suppliers and buyers in the industrial market.
While some organizations respond by fighting, others accept these groups as
another variable to be considered in developing strategic planning, working
through public affairs departments to determine their interests and to
express favorably the companys goals and activities in the press. The impact
of these groups however is felt by all participants in the interface level.

General public Although the general public does not react in an

organized way towards a firm or an industry, as interest groups do, when
sizeable portion of a population shifts attitude towards a firm or industry,
there is definite impact.

Internal public The board of directors and managers as well as blue and
white colour workers are important emissaries between an organization and
other participants in the interface and public levels. Corporate policy must
give consideration to employees and others who are held responsible for the
overall operation of the firm. Employee morale is an important factor in all
business decisions. And when morale is low, organizational efforts suffer. A

firms employees spend more than two thirds of their time off the job,
interacting with their families and the community, so employees attitudes do
influence the public.
Macro Environment
This level of the organization is made up of components that have less specific
and less immediate implications for managing the organization effectively.
1. Economic component
Economic conditions greatly influence an organizations ability and willingness to
buy and sell. Thus emerging changes in the economic environment both at home
and abroad, must be closely monitored. It includes the following factors;

GNP

Inflation rates

Balance of payment position

Debts and spending

Taxation rates

Interest rates

Consumers income

Corporate profits

2. Social component
This describes the characteristics of the society where an organization exists. It
includes factors such as;

Literacy levels

Values of people

Educational levels

Geographical distribution

Customs and believes

3. Legal component

This consists of legislations that have been passed. It describes the rules or the
laws that all the company members must follow. They include all laws affecting
the organization e.g.

Consumer health policy

Energy policies and conservation Acts

Employment Acts, etc.

4. Political component
Comprise those elements related to the government affairs. This includes;

Type of government

Government attributes towards certain issues

Lobbying efforts from interest groups

Progress towards passing of laws affecting certain industries, etc.

5. Technological component
Given the rate of technological change in industries such as telecommunications,
computers, and semi conductors, large buying firms are developing forecasting
techniques to enable them to estimate time periods in which major technology
developments might occur. Marketers must also monitor technological change if
they hope to adapt marketing strategy with sufficient speed and accuracy to
make the more scientific breakthroughs. This includes;

New procedures

Approaches to new plan of goods and services

Addresses the issues of new equipments and new ways of improving

production through the use of computers /robots.

6. Demographic component

Industrial firms cannot ignore the demographic environments because of the

derived nature of industrial demand. World population explosion and changing
population structure of the world has a major impact on industrial demand.