Advertising is the most preferred promotional tool in the consumer market rather than in the industrial market. It is preferred less by the industrial marketers compared to personal selling as they get to meet the customers personally and understand their needs better in personal selling. But still advertising is used to a good extent by the industrial marketers to assist their sales force and intermediaries to generate more leads. Advertising plays an important role in industrial marketing strategy by supporting and supplementing personal selling efforts. The advertising budget for industrial goods is far less compared to that of consumer goods. But, to have an increased efficiency and effectiveness of the overall marketing strategy, industrial marketer should have an integrated and well planned advertisement strategy that blends properly with personal selling efforts.… Read the rest
Industrial Marketing Concepts
Industrial Buying Behavior Models
The buying decisions of industrial buyers are influenced by many factors. Usually, these are influenced by organisational factors or task-oriented objectives viz. best product quality, or dependable delivery, or lowest price and personal factors or non-task objectives viz. like promotion, increments, job security, personal treatment, or favor. When the suppliers proposals are substantially similar, organizational buyers can satisfy organisational objectives with any supplier, and therefore personal factors become more important. When suppliers offers differ significantly, industrial buyers pay more attention to organisational factors in order to satisfy the organisational objectives. There are two models available to provide a comprehensive and integrated picture of the major factors that combine to explain organisational buying behavior.… Read the rest
Decision Making Units (DMUs) in Industrial Marketing
It is essential to understand the roles of buying-center members or Decision Making Units (DMUs) before identifying the individuals and groups involved in the buying-decision process. It is helpful to the industrial marketers to develop an effective promotion strategy. The roles of buying center members are as follows:
- Initiators: The initiators might be any individuals in the buying firm. Often, the users of a product/service play the role of the initiators.
- Buyers: The major roles of buyers are obtaining quotations (or offers) from suppliers, supplier evaluation and selection, negotiation, processing purchase orders, speed up deliveries, and implementing purchasing policies of the organization.
Buying Situations in the Industrial Marketing
There are three common types of buying situations in industrial market, which are discussed as follows:
1. New PurchaseThe industrial buyers buy the item for the first time in this situation. The need for a new purchase may be due to internal or external factors. For example, when a firm decides to diversify into new purchase situations the buyers have limited knowledge and lack of previous experience. Therefore, they have to obtain a variety of information about the product, the suppliers, the prices and so on. The risks are more, decisions may take longer time, and more people are involved in decision making in the new purchase decisions.… Read the rest
Industrial Buying Process
In consumer marketing, consumers make buying decisions based on certain mental stages such as need recognition, information search, evaluation, purchase decision, and post-purchase behavior. But, in industrial markets the buying decision making process includes observable sequential stages involving many people in the buying organisation. The understanding of these steps/phases of buying-decision making is helpful to an industrial marketer to develop an appropriate selling strategy.
The purchasing activities of industrial buyers consist of various steps/phases in buying decision making process. The importance of each step depends upon the type of buying situation. The industrial marketers should understand both (step in decision-making process and the type of buying situations) to market the product or service.… Read the rest
Nature of Demand in Industrial Markets
The demand for industrial products and services does not survive by itself. It is derived from the ultimate demand for consumer goods and services. Therefore, industrial demand is called derived demand. Sometimes, the demand for industrial product is called joint demand, when the demand for a product depends upon its use along with the existence of other product or products. Cross elasticity of demand exists for some substitute products in industrial market. These concepts are detailed as follows:
Derived DemandThe single most important force in marketing of industrial products and services is derived demand. Industrial customers buy goods and services for making the use in producing other goods and services and finally produced product/service sold to the consumers.… Read the rest