Industrial Marketing

Session 1
 Reading Material

Books
1) Principles of Marketing by Kotler and Armstrong ,
12th edition ( Chapter 6)
2) Industrial Marketing : Analysis, Planning & Control
by Reeder, Brierty & Reeder
3) Industrial Marketing
by Krishna K. Havaldar
4) Industrial Marketing
by Hill, Alexander, Cross
5) Industrial Marketing
by Dr. Milind T. Phadtare
6) Industrial Marketing by Francis Cherunilam
7) Industrial Marketing by Robert Dodge
8) Industrial Marketing by Govindrajan
9) Industrial Marketing : Ghosh

Internet : Google, etc.

Proquest

Industrial Marketing Management (Journal) available

on ScienceDirect
 Industrial Marketing / Organizational
Marketing / Institutional marketing

Industrial Marketing is B2B

(Business to Business)
A firm does business with other firm

Consumer Marketing is B2C

( Business to Consumer)
 Definition
Industrial marketing consists of all activities
involved in the marketing of products and
services to organisations, that use products
and services in the production of consumer or
industrial goods and services, and to facilitate
the operation of their enterprises.
 Differences between
Industrial Marketing and Consumer Marketing
Attribute Industrial Marketing Consumer Marketing
(Business Mktg.)(B2B) (B2C)
Nature of Derived Direct
demand
Market Few buyers Large no. of buyers.
characteristics Buyer location concentrated Buyers widely scattered
Marketing Mix

Product Standardized as well as customised Usually Standardized

Price Non-standard, bidding, negotiation, Standardized with price list

as well as standard
Place Usually channel length small Usually channel length long
(Distribution)
Promotion Emphasis on Personal selling Mainly Advertising,
sales promotion
 Contd… Differences between
Industrial Marketing and Consumer Marketing
Attribute Industrial Marketing Consumer Marketing
(Business Mktg.)(B2B) (B2C)
Consumer Buying in large quantity, Buy in Small quantity,
Behaviour Usually loyal to a brand, Brand switching,
Buyer technically Buyer technically not
knowledgeable, knowledgeable
Rational buying, Rational and impulsive
buying
Strong interpersonal Family involvement
relationship,
Service, delivery and Service, delivery and
availability very important availability of limited
importance
 Contd… Differences between
Industrial Marketing and Consumer Marketing
Attribute Industrial Marketing Consumer Marketing
(Business Mktg.)(B2B) (B2C)
Product High order Not of high order
specifications

Information Intense interactions, post sales Limited interactions.

exchange contacts of very high importance Post-sales interaction very rare

Financial Price, operating expense and Price, operating expense and

exchange commercial terms of high commercial terms of limited
importance importance

Social exchange Sustained cordial relations Sustained cordial relations not

necessary. essential
Economics of Industrial Demand
 Economics of Industrial Demand
1) Derived demand
2) Joint demand
3) Cross-elasticity of demand
1) Derived demand
Derived from ultimate demand for consumer goods
and services.
Example : If demand for flats (consumer good) is
there, there will be demand for cement,
reinforcement bars, sand, etc.

Forecasts of ultimate consumer demand determines

the levels of demand throughout the entire industrial
pipeline.
2) Joint demand
When one product requires the existence of others to be
useful. If one product is not available, demand for other
product is not there.
Reason : Most products require several component parts or
ingredients.
Example : Concrete : steel, cement, aggregates,sand
Furniture : Ply wood, fevicol, laminates.

Buyers prefer same supplier to sell all items

3) Cross-elasticity of demand

The responsiveness of sales of one product to

a price change in another.

Example : Quantity of Steel demanded is

related to price of close substitute aluminum.
Windows in homes : wood, aluminum, steel
Classification of Industrial products
and services
Materials and Capital items Supplies and
parts services
Raw materials Installation/ Supplies
(eg. Sand) Heavy equipment (eg. Stationery)

Manufactured Accessories / Services

materials Light equipment (eg. Legal
(eg cement) (eg. Computer) services)

Component parts Plant and

(eg. Fixtures) Buildings
What does the buyer look for

while purchasing
 Attributes considered for
Purchase Decision making
1) Product attributes : features that add value or
reduce cost, over and above meeting specifications,
example fuel efficiency for a diesel generator.

2) Economy attributes : Purchase price

and Commercial terms and conditions.

3) Supplier attributes : Reliability, Reciprocity (barter),

Technical capability, Financial capability,
acquaintance with supplier, location of supplier,
infrastructure of a supplier