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Introduction

Prof. Shashank Rashinkar

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Industrial versus ConsumerMarketing Management

y The Industrial Markets are relatively concentratedy The channels of Distribution are shortery Buyers are well informedy Highly organized buyersy Sophisticated in purchasing techniquesy Multiple influencersy General management responsibility

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Industrial versus Consumer Marketing Areas of Differences

Characteristics Industrial Markets Consumer Markets

Market StructureGeographically concentrated,Few buyers, Oligopolistic

Geographically dispersed,Mass markets, Monopolistic

Products

Technical complexity,Customized Service, deliveryand availability veryimportant

Standardized, Service,delivery, and availabilitysomewhat important

Buyer behaviour

Functional Involvement,Rational/task motivespredominate, Technicalexpertise, Stable relations,Interpersonal relationships,Reciprocity

Family involvement,Social/psychological motives

pre-dominate, Less technicalexpertise, Nonpersonalrelationships

Decision making Distinct, observable stages Unobservable, mental stages

Channels Shorter, more direct, fewerlinkages Indirect, multiple linkages

Promotion Emphasis on personal selling Emphasis on advertising

Price

Competitive bidding,negotiating on complexpurchases, List prices onstandard items

List prices.

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D efinition of Industrial MarketingIndustrial Marketing consists of all activities involvedin the marketing of products and services to

organizations(i.e., commercial enterprises, profit andnot-for-profit institutions, government agencies andresellers) that use products and services in theproduction of consumer or industrial goods andservices, and to facilitate the operation of theirenterprises.

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Classification of Industrial Products

& ServicesThe main method of classification is based on how

products or services enter the production process andtheir relative costs.

y Materials & Parts - These good enter the productdirectly(Raw materials, Manufactured materials,Component parts, Subassemblies)

y C apital Items - Used in production process(Lightequipment or accessories, Installations or heavy equipment, Plant & Building)

y Su pplies and S ervices - Support theoperations(Supplies, Services)

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Ex change Process in Industrial

Markety Prod u ct or S ervice Exchange -Success depends on

the identification of the buyer s needs and the

product s potentialy Information Exchange -Query Handling related to

Technical, Economic & pre and post sale maintenancey F inancial Exchange -Granting of Credit, Currency

exchangey S ocial Exchange -Reducing uncertainties

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Economics of Industrial demandy Demand is the volume of a specific product that

industrial buyers purchase during a specific periody The demand fluctuates due to any economic, social,political and legal downturny D irect D emand -Consumers buy for their personal

use or satisfaction(Not for commercial purpose or

profit motive)y D erived D emand -Demand for the industrial goods is

derived from the ultimate demand for consumergoods and services.