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Murty,
Bangalore, India
BUSINESS MARKETING
Also Known as :
Prof. B.K.Murty,
Bangalore, India
Recommended Books
Main
Industrial Marketing, Robert R Reeder & Reeder PHI
Prof. B.K.Murty,
Bangalore, India
Business Marketing Management, Michael D Hutt, Thomas W Speh Thomson, 8/e, 2004 Other
Prof. B.K.Murty,
Bangalore, India
Module 1
Dimensions of Industrial Marketing
VTU Syllabus Coverage Dimensions of Industrial Marketing: Nature of Industrial Marketing Industrial marketing Vs. Consumer Marketing, Economics of Industrial Demand The resellers market The industrial Marketing concept, Understanding Industrial markets, Types of Industrial markets, Classifying Industrial Products, Organizational Procurement Characteristics The Industrial Marketing Environment, Environment effect on industrial Market with special reference to government Rule.
Prof. B.K.Murty,
Bangalore, India
Industrial Marketing
Marketing aimed at bringing about an exchange in which a product is sold for any use other than personal consumption.
Prof. B.K.Murty,
Bangalore, India
Industrial marketing consists of all activities involved in the marketing of products and services to organizations ( commercial, profit or non profit institutions, government agencies or resellers) that use products or services in the production of consumer or industrial good and service, and to facilitate the operations of the enterprise.
Prof. B.K.Murty,
Bangalore, India
Prof. B.K.Murty,
Bangalore, India
A business market comprises all the organizations that buy goods and services for use in the production of other products and services that are sold, rented, or supplied to others The B2B market is very large and involves much more money and goods than consumer markets.
(The purchasing dept. at GM spends more than $85 billion each year more than the GDPs of Ireland, Portugal, Turkey, or Greece.) At $200 billion, U.S. Govt. is largest customer in the world.
Prof. B.K.Murty,
Bangalore, India
Like a final consumer, organizations purchase products and services to fill needs Their primary need is meeting the demands of their own customers Business buying decisions:
Are more formal Involve complex interactions among many people Must consider the organizations goals
Bangalore, India
Supply of raw materials to the organization to process the finished goods for the end user or consumer.
Examples : . Supply of soap/ detergent powder to the manufacturers of soaps or detergents. To HLL there must be suppliers of the raw materials of soap/detergent raw materials to give the end product s like Rin Detergent Bar or Surf Excel.
Information Exchange:
Prof. B.K.Murty,
Bangalore, India
When one organization gives the technical knowledge, economic consultancy, or giving replies to organizational questions
Example :
Installation of software Legal advise Consultancy services
Financial Exchange:
Prof. B.K.Murty,
Bangalore, India
Grant of credit facilities or exchange of currency from one organization to another country. Example: Industrial Development Bank of India (IDBI)
Prof. B.K.Murty,
Social Exchange: Social exchange is important in areas of reducing uncertainty.& maintaining a better relation over a long period of time.
Bangalore, India
Prof. B.K.Murty,
Bangalore, India
Prof. B.K.Murty,
Bangalore, India
Relatively few customers Derived demand for goods & services Expertise in buying
Prof. B.K.Murty,
Bangalore, India
Prof. B.K.Murty,
Bangalore, India
Consumer marketing and industrial marketing have the same tenets but significant differences do exist. a. Market Size b. The Geographic Concentration
Business-to-Business Marketing
Product
Relatively technical in nature, exact form often variable, accompanying services very important
Consumer-Goods Marketing
Standardized form, service important but less than for business products
Price
Prof. B.K.Murty,
Bangalore, India
Competitive bidding for unique items, list prices for standard items
Emphasis on personal selling to market
List prices
Promotion
Emphasis on advertising Product passes through a number of intermediate links en route to consumer
Comparatively infrequent contact, relationship of relatively short duration Individual or household unit makes decision
Prof. B.K.Murty,
Bangalore, India
ECONOMICS OF INDUSTRIAL DEMAND: Demand for the industrial demand develops from the ultimate demand for consumer goods and services. Demand is derived from the choice and likes of consumers.
Prof. B.K.Murty,
Bangalore, India
There are principally three types of demands in industrial marketing. 1. Derived Demand. 2. Joint Demand. 3. Cross Elasticity of Demand.
RESELLERS MARKET
Market Characteristics Large number ( e.g. Foodworld)
Prof. B.K.Murty,
Bangalore, India
Product Characteristics Purchasers brand ( e.g. ITC ) Buyers Characteristics Choice based on sellers offer Channel Characteristics Depends on types of product Promotion Characteristics Personal Selling Price Characteristics Purchasers profit based directly on cost
Key Task of the organization is to define the needs of the target market and adapt organizations product or service to satisfy those needs more effectively than its competitors.
-- Kotler
Prof. B.K.Murty,
Bangalore, India
Prof. B.K.Murty,
Bangalore, India
OBJECTIVES
The diversity of industrial customers and the types of products and services they purchase. The type of customer being served and the product or service being marketed influences marketing strategy. The unique characteristics of organizational purchasing.
Prof. B.K.Murty,
Bangalore, India
Commercial Market: Individuals and firms that acquire goods and services to support, directly or indirectly, production of other goods and services
Commercial Market
Prof. B.K.Murty,
Bangalore, India
Prof. B.K.Murty,
Bangalore, India
Trade Industries: Retailers and wholesalers who purchase goods for resale to others. Reseller: often used to describe the wholesalers and retailers that operate in the trade sector
Organizations: Include domestic units of federal, state, local and foreign governments
Prof. B.K.Murty,
Bangalore, India
Prof. B.K.Murty,
Bangalore, India
Hospitals,
Prof. B.K.Murty,
Bangalore, India
Prof. B.K.Murty,
Bangalore, India
Capital Items
Marketing Implications Standardization ( Bolts, bearings - ISI) Custom made Replacement markets
Capital Items
Installations
Prof. B.K.Murty,
Bangalore, India
Accessories
Drills Computers
Intermediate channels
Supplies
Soaps Lubricants
Prof. B.K.Murty,
Bangalore, India
Services
Travel agencies House keeping
Marketing Implications
DISCUSSIONS
Same product as consumer & industrial product Same product with multi-classifications Cars Salt Tea Travel agency Security Services
Examples of products or services which are never: Consumer Industrial
Prof. B.K.Murty,
Bangalore, India
Prof. B.K.Murty,
Bangalore, India
How goods and services are purchased by commercial enterprises depends on Nature of the business, Size of the firm, Volume, Variety Technical complexity
Technical Sophistication.
materials requirement planning, supplier rating systems, economic order quantity and value analysis
systematized techniques for reducing costs and improving the performance value of materials, components, and manufacturing processes.
Government Contracts.
Fixed price contracts Cost re-imbursement contracts Negotiated contract
Institutional Purchasing
Somewhere between commercial enterprises and government.
Prof. B.K.Murty,
Bangalore, India
Prof. B.K.Murty,
Bangalore, India
Prof. B.K.Murty,
Bangalore, India
Publics
Macro Environment
Government
Input Suppliers
Facilitators
Distributors
Competitors
Communities of interested parties who are not direct participants in a market as customers, channel members, suppliers, or competitors.
Prof. B.K.Murty,
Bangalore, India
Publics
Independent Press
Internal Publics
Demographic Environment
Prof. B.K.Murty,
Bangalore, India
Ecological Environment
Bangalore, India
End of Module 1