Today’s economic conditions call for careful consideration of the elements that are essential in developing an effective communication program – whether it is industrial or consumer oriented. Promotional variables must be artfully integrated if communication objectives are to be achieved most effectively. Many of the principles that are followed in developing consumer advertising programs are not only applicable but are necessary in developing an effective industrial promotional program. The objective of industrial advertising, for instance, is to communicate something about the company and its products. It should be designed, then, to enable the company and its sales people to become favorably known to current and potential customers, to convey specific and technical information regarding the characteristics of a particular product(s), to help sales people in their selling effort, to motivate distributors of industrial goods, and to reach those who either directly or indirectly influence the buying of industrial goods. An Continue reading
Industrial Marketing Concepts
Pricing Decisions in Industrial Marketing
Price still remains one of the most important elements determining company market share and profitability. Generally, prices were set by buyers and sellers negotiating with each other. Setting one price for all buyers is a relatively modern idea. Price is the only element in the marketing mix that produces revenue. Price is also one of the most flexible elements of the marketing mix. At the same time, pricing and price competition are the number-one problems faced by many marketing executives. Yet many companies do not handle pricing well. The most common mistakes are these: Pricing is too cost oriented; price is not revised often enough to capitalize on market changes; price is set independent of the rest of the marketing mix rather than as an intrinsic element of market-positioning strategy; and price is not varied enough for different product items, market segments, and purchase occasions. Pricing Decisions in Industrial Marketing Continue reading
Indirect Channel Relationships in Industrial Marketing
The manufacturer’s choice of indirect channel relationships may be separated into those of a strategic nature and those which are matters of policy. In the former instance there are two basic alternatives: selective distribution is one in which the firm sells through one or a limited number of outlets in each market area or segment, or intensive, is one in which all outlets in a given market segment will be utilized. The decision to pursue a selective rather than an intensive strategy, or vice versa, based on a number of circumstances. Intensive distribution: If the manufacturer elects to market through all outlets of the chosen type or types that will buy his products, he may be able to gain complete coverage of his total market rather quickly. Merely by the laws of chance at least one outlet in each market area should be willing to handle his product. Moreover, there Continue reading
Channel Strategy Formulation in Industrial Marketing
Formulating the channel strategy in industrial marketing involves an analysis of conditions which have a bearing on the best choice among structural alternatives and on the relationship between them and the manufacturer which will be most productive. In general, the industrial marketer has a choice of three types of structural arrangements. Direct to users – through the manufacturers own sales force, with or without a network of branch warehouses. Indirect to users – through agents or wholesale distributors. The choice of an indirect channel system involves the choice of a selective (only one or a few outlets in each market area) or intensive (a number of outlets in each market area) relationship. Mixed structure – the nature of the structural network differs with the segmentation of the market. One segment may buy the manufacturer’s product in standard grades, while another may want special quality variations. While indirect distribution may be Continue reading
Strategic Industrial Marketing
Marketing is carefully meshed with production, finance, research and development (R&D), purchasing, and other functions of the business so as to make the maximum contribution to company objectives. The marketing activities of industrial products are an integral part of the company’s total operating system. Therefore, it is useful to identify the major types of plans by which operations of an enterprise are directed. These may be designated as strategic, operational, logistical, and organizational. A plan is a goal-directed system of action. A strategic plan is one which describes the allocation of a firm’s resources which the management believes will achieve the corporate mission with the greatest efficiency over the long run. Supporting the strategy and contributing to its implementation are plans for the operations, logistics and organization called for by the strategy. Together, these constitute a hierarchy of objectives, and plans to achieve them, which make up the guidance system Continue reading
Industrial Marketing Communication
The industrial products are technical in nature that have very few buyers compared to the consumer products. This makes the industrial marketers to change their promotional strategy for industrial goods and services. The promotional mix used by the industrial marketer consists of advertising, sales promotion, publicity, public relations, personal selling and direct marketing. These tools help them to build awareness, develop company image, inform about the product features thus assisting the company sales force and other intermediaries to increase their sales. Of all the promotional mix, personal selling is the most important because industrial products are technical in nature and they involve lot of direct interactions by the company people with the industrial customers. However, all the elements of promotional mix needs to be well integrated with personal selling with proper coordination in order to develop an effective industrial marketing communication strategy. Any industrial communication or promotion program in order Continue reading