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 Demand The 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. In industrial marketing, the demand for industrial goods and services is derived from consumer goods and services. For example, the demand for precision steel tubes does not exist in market. It Continue reading
Industrial Marketing Management
Definitions of Key Terms in Integrated Marketing Communications
Integrated means that combine or coordinate separate elements so as to provide a harmonious, interrelated whole. In other word, when all marketing communication tool work together, it will be more effective than work as a single component. It will create more competitive advantages, boost sales and profit, while saving cost, time and stress if this concept is incorporated in marketing strategy. So, if the marketing communication tools are combined as a group it will produce more powerful outcome in the process of delivering customer superior value. Marketing The root word for marketing is market. Market is defined as a place for consumer and sellers to carry out transaction that required cash as an exchange medium for obtaining a product or service. Marketing can be defined in two perspectives which include old view or new view of marketing. From the new view of marketing, it is all about the creation of Continue reading
Application of Direct Marketing Tools in Industrial Marketing
Direct Marketing is a recent activity that has come up and is used extensively by the industrial marketers. The various tools used in direct marketing are direct mails, telemarketing and online marketing channels. A direct marketing channel does not involve any intermediary and the sale is done by the company by directly contacting the target customer. As the cost involved in direct marketing activity is much less compared to the cost of company sales force directly meeting the customers, many industrial organizations prefer this tool. This tool aids the sales force to gain entry into prospective customer’s office where prospective customers are identified beforehand and are informed about the company products. Direct Mail The existing and prospective customers are mailed promotional letters, catalogs, CD’s etc. by the industrial marketers where they are provided with necessary information about the company’s products and services and any schemes or offers it has. This Continue reading
Sales Promotion in Industrial Marketing
Sales promotion is an activity used by the industrial marketer to boost the immediate sales of a product or service. It is used to increase the sales by impressing the customers, rewarding them and also motivating the sales force to get more business. There are different techniques used in a industrial sales promotion activity like a free-sample campaign, offering free gifts, arranging demonstrations or exhibitions, organizing competitions with attractive prizes, temporary price reductions, door-to-door calling, telemarketing, using personal letters, etc. More than any other element of the promotional mix, sales promotion is about “action”. It is about stimulating customers to buy a product. It is not designed to be informative — a role which advertising is much better suited to. Need for Sales Promotion in Industrial Marketing To introduce a new product in the market. To influence the public with the help of new uses of the product. To increase Continue reading
Publicity and Public Relations in Industrial Marketing
Publicity When any significant news about a product is made known to the people through a published medium like radio, television, newspaper or otherwise, such kind of act is known is publicity. Publicity has very high credibility in the eyes of organizational buyers as the sponsor does not pay anything for publicity and it is not a part of any promotional program. It is the least costly promotional alternative available for the company that is very effective. Publicity helps to generate sales leads and improves relationship with customers. Technical articles published in trade journals about a company or products with the identity of authors (such articles are called as signed articles) improve the image of the company and the products. They form as a good source of information for customers. Though publicity is free, there are some associated costs attached to it. The costs incurred are for reasons like obtaining Continue reading
Factors Affecting the Structure of Industrial Channels
Industrial marketing channels are set of independent, external organisations involved in the process of marketing an industrial product available to industrial buyer. Marketing channels satisfy the demand of industrial buyers by supplying products at the right place, in the exact quantity requirements and at correct price. The factors influencing industrial channel structure are: Type of market: If a manufacturer product can be sold only to the members of one or few industries, and the number of firms in each industry is small, direct distribution is profitable. On the other hand, if the market is horizontal, the product must be sold to buyers in many industries. Market financial: If the probable volume of sales in a market area is quite large, direct marketing may prove profitable. On the other hand , if the sales volume of a specific product is low, the direct method may be too expensive. To what extent Continue reading