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
Industrial Marketing Strategy
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
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.… Read the rest
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.… Read the rest