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.
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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.… Read the rest

Long-Term Industrial Product Strategies

Industrial marketing firms have to  adopt the following three important steps for developing long term product  strategies for existing individual products and products lines.

  1. Assessing the performance of all the existing products or product lines by  using product evaluation matrix.
  2. Examining the relative strengths and weakness of the firm’s products in  comparison to competitors’ products by using perceptual mapping technique.
  3. Deciding the product strategies for the existing products based on the above  analysis.
1. Product Evaluation Matrix

Yoran Wind & Henry Claycamp have developed  a technique called product evaluation matrix to be used to assess the product  performance. Performance parameters of a product such as industrial sales,  company sales, market share and profitability are combined in the matrix.  … Read the rest

Product Life Cycle and Industrial Pricing

Pricing strategies vary as the  industrial product moves through its life cycle. The industrial pricing strategy is a key  factor in each of the four cells of product life cycle.

  1. Introductory Stage Pricing Strategy: There are two pricing strategies  available for a new product which is in the introductory stage of its life cycle.  These are: (a) Penetration Strategy, and (b) Skimming Strategy. An industrial  marketer must analyze the price from the angle of the buyers. How soon the  firm should try ton recover the investment on the new product is another  important factor to be considered by the industrial marketer.
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Cost-Benefit Analysis in Industrial Pricing

To formulate an appropriate industrial pricing strategy it is very essential to have an  analysis of the costs and benefits of the industrial product from the customer’s  point of view.

The benefits can be grouped into soft and hard benefits. Soft benefits includes  those benefits which are very difficult to assess, such as customer training,  warranty period, customer services, company reputation etc.  Hard benefits are the physical attributes of the products such as production rate  of machine, rejection rate of component and price/performance ratio.

The costs for an industrial customer mean price plus other expenses that are  incurred in purchasing and using the product.… Read the rest

Pricing of Industrial Products

The industrial marketers should understand the various aspects of the  pricing, since pricing is the most critical part of industrial marketing strategy.  Different strategies such as market segmentation strategy, product strategy, and  promotion strategy are related to pricing strategy. In order to achieve the dual  objective such as to meet the company objective and satisfy the market needs,  the industrial marketer has to integrate the various strategies.  When the members of buying committee of a buying firm, purchase a particular  industrial product, they are buying a given level of technical service, product  quality, and delivery reliability. The other elements such as the reputation of the  supplier, friendship, a feeling of security and other personal benefits flowing  from the buyer-seller relationship are also important.… Read the rest