Need for Advertising Agencies in Industrial Marketing

An Advertising agency is an organisation whose business consists in the acquisition of the right to use space of time in advertising media and the administration of behalf of the advertisers of advertising appropriations made by them. It renders advice and creative services for its clients. It does not sell any tangible products, but sells creative talents and past experience. Thus it is an organisation specially created for rendering services in advertising.

The services of an advertising agency in general can be summarized as follows:

  1. It makes the advertisements pleasant and serves the purpose.
  2. It can get the advertisements published at the appropriate times.
  3. It can help the advertiser in the preparation of the advertising budget.
  4. It can free the advertiser from the botheration of contacting the media owners of all types as and when necessary.
  5. It can do market research for the advertiser at a lesser cost.
  6. It can also help the advertiser in designing the trade mark, packages and labels and wrappers for the goods to be sold. It can do all types of jobs connected with the printing work.
  7. It can do sales promotion work.
  8. It can design window displays and arrange for a systematic change in the arrangement of the things in the windows from time to time.
Advertising Agencies in Industrial Marketing Scenario

Manufacturers cannot look after all the promotional activities especially under the principle of specialization. Organisations with adequate financial resources set up a separate department for this purpose. Such an arrangement would be beyond the reach of medium or small scale producers.… Read the rest

Strategic Planning in the Industrial Market

While the basic principles of marketing planning apply in both markets, many organizations have found that what works well in the consumer market fails to do so in the industrial market. Two significant differences between these markets appear to account for this phenomenon. First, unlike the consumer market where products are normally’ marketed through one or two channels, most industrial marketers face diverse markets that must be reached through a multiplicity of channels-each requiring a different marketing approach. A producer of communication equipment, for instance, may market to such diverse segments as the commercial, institutional, and governmental market, each of which will require a unique marketing plan. Second, in contrast to consumer marketing, successful industrial marketing strategy depends more on other functional areas. Where the elements of planning in consumer marketing can often be contained within specific areas of marketing, such as advertising, selling, and product management, planning in the industrial market is largely dependent on, or constrained by, the activities of other functional areas-for example, engineering, manufacturing, and technical services. When marketing emphasizes tailor-made products and fast deliveries, for instance, manufacturing must be prepared to follow through with product output. Planning, then, in the industrial marketing arena requires a higher degree of integrated effort across functional areas and a closer relationship with overall corporate strategy than in the consumer market.

Functional Isolation

While planning in the industrial market is as sophisticated as it is in the consumer arena, too often industrial firms concentrate planning efforts in the marketing department, failing to recognize the inter-dependency between marketing and other functional areas.… Read the rest

Importance of Services in Industrial Marketing

Business services include maintenance and repair support and advisory support. Like supplies services are considered as expense items. The explosive growth of the internet has increased the demand for a range of electronic commerce services such as delivering technical support, customer training and management development programmes.

The rapid growth of business services in industrial marketing is governed by four important factors which are explained below.

  1. Innovations: The innovations in the field of science and technology have contributed for increasing demand in the area of business services. Advancement in computer security systems, computer enabled services, environmental control systems for office and factory buildings are examples for the effect of innovations on business services.
  2. Out Sourcing: It is a common phenomenon that the present day organizations are getting the services done from outside services provide. In an area where the company is not expertised such as management information functions, HR, Payrolls, Warehousing etc, the trend is towards going for outsourcing these activities. As a result more and more small and large service providers have entered the business services sector, therefore resulting in the wide opening up of business service sector.
  3. E-Business: The internet is creating new business opportunities and directing the organizations to do the business in different forms and ways. Services like supply chain management, customer service and support are done through internet apart from other usual ITES.
  4. Growth of Manufacturing Sector: Despite the decline in the number of manufacturing employees, manufacturing out put is continued to growing. With this growth the demand for services like information processing, advertising etc, are in an increasing trend.
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Industrial Product Development

Industrial product is defined as a complex set of economic, technical, legal, and personal relationship between the buyer and the seller. A product is a combination of basic, enhanced, and augmented properties. Basic properties are included in the generic product, with fundamental benefits sought by customers. Generic products are made differentiable by adding tangible enhanced properties such as product features, styling and quality. The augmented properties include intangible benefits such as technical assistance, available of spare parts, maintenance and repair services, warranties, training, timely delivery, and attractive commercial terms. The product package as expected by the prospective customers should be well understood by the industrial marketer.

Industrial product development is the process by which the product ideas are generated, assessed, directed and converted into products. There are seven stages in the process of industrial product development.

  1. Idea Generation: The Industrial marketer should be consciously search for new product idea and to their sources both inside and outside the company. Internally the new product ideas may come from sales staff that is close to customers, R&D experts, from top management. An external source of ideas includes channel members such as distributors or customers. An industrial marketer can get good ideas by using techniques like brainstorming and attribute listing. In attribute listing technique, important attributes of existing products are listed. Ideas are invited from a group of employees to search for an improved product by modifying each attribute. An industrial firm should encourage the employees to present innovative and creative ideas by offering recognition or rewards to the employees submitting the best ideas.
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Marketing Logistics

Logistics is a military term that refers to the management of various activities like transportation, inventory, warehousing right from the stage of processing the raw materials by the manufacturer to convert it into finished goods till they are made available to the customer for use. While logistics management helps to optimize the flow of material within the organization, supply chain management crosses the boundaries of organization extending material flow integration upwards to suppliers and also descending down to customers. Logistics basically represents two primary product movements, (i) Physical supply, concerned with supply of raw materials, component parts, and other related supplies necessary for the manufacturing process. This comes under the purchase function (Materials Management) and (ii) Physical distribution, concerned with delivering the finished product to customers and the middlemen. This comes under the marketing management that is also called as Marketing Logistics.

Marketing logistics is the process of delivering the finished goods to the intermediaries as well as customers. An efficient delivery system helps to reduce the costs, improve customer service, and minimize time that finally helps to gain customer loyalty. A physical distribution system involves various tasks (as given in the table below) that interact with each other and play an important role in the overall performance of the logistics system.

Tasks Key Aspects1. Transportation An important activity that involves movement of goods from the manufacturer to the customer.2. Warehousing A place where goods are stored till they are made available in the market place when needed.… Read the rest

Industrial Distribution Channel Management

Channel designing is resorted to by the industrial marketer when he has to develop either a new channel system or modify an existing one. As channel design and management is a difficult and an incessant task, an industrial marketer has to go through certain stages that are involved in designing a superlative channel system. The various steps that are involved in channel design process are analyzing needs of the customer, establishing channel objectives, considering channel constraints, listing channel tasks, identifying channel alternatives, evaluating alternate channels and selecting the intermediaries.

The industrial marketer also has to take appropriate decisions on industrial distribution channel management by selecting the right intermediaries based on the various steps. The intermediaries need to be continuously motivated by means of offering them various benefits and facilities. Any conflicts arising between the intermediaries due to various reasons need to be solved by the industrial marketer. Finally, the entire channel performance has to be evaluated and necessary control measures need to be taken in order to enhance the performance of the entire channel network.

After a company completes the task of choosing a channel alternative, it has to start the process of selecting the intermediaries, motivate them, control any distribution channel conflicts and evaluate the performance of channel members.

Selecting the Intermediaries

Selecting the intermediaries is not part of channel design as some intermediaries leave the channel while others are terminated by the manufacturer. Selecting the best intermediary is a continuous process that is sometimes a more difficult task as producers have to work hard to get qualified middlemen.… Read the rest