Sometimes outside Consultants or Experts play the role of influencers by drawing specifications of products or services. For example, the demand for aluminum door and window frames etc. Competing Let us do it my way. 2. Expert Power. Emphasis on personal selling. BUY - PHASES IN THE INDUSTRIAL BUYING-DECISION PROCESS. Often consists of answering technical, economic, and organizational questions regarding pre and post sale maintenance and servicing. Determination of the application or characteristics and quantity of needed product. 4. INFLUENCERS:- They influence the buying decision. Buying is an organizational-decision making process. Strategic Planning An Industrial Firm carries out strategic planning by identifying long term product / markets, based on its forecasts of external environment, analysis of its strengths and weaknesses, and its long term objectives and goals. Often, the users of the product / service play the role of the initiators. trailer << /Size 204 /Info 183 0 R /Root 186 0 R /Prev 362029 /ID[] >> startxref 0 %%EOF 186 0 obj << /Type /Catalog /Pages 168 0 R /Metadata 184 0 R /JT 182 0 R /PageLabels 166 0 R >> endobj 202 0 obj << /S 1024 /L 1129 /Filter /FlateDecode /Length 203 0 R >> stream 6. B2B Marketing NATURE OF INDUSTRIAL MARKETING.
The Industrial Marketers should realize that it is important to satisfy not only the purchasing objectives of an Industrial Firm but also the personal objectives of the buying members. The Demand for Industrial Products and Service Does Not Exist By itself. List Prices for standard products. The Jagdish Sheth Model of Industrial Buyer Behavior This model emphasizes the joint decision making by two or more individuals, and the psychological aspects of the decision making individuals in the industrial buying behavior.
There are Negotiations. 10. HS]HSa~9z:s;sMrf*uib:IjYA]im4$*S.F&aq2$@/)q]q R C2d8{]~##h{c_b IKe9LNJq|B3c!wJx,iu&i5M~W^k=7uCAw&dvY1 will increase if there is a price increase for steel and wooden and window frames.
INDUSTRIAL OR BUSINESS MARKETING Briefly Industrial or Business Marketing can be defined as human activity directed towards satisfying wants and needs of organizations through exchange processes. 0000004490 00000 n Summary of Differences between Consumer & Industrial marketing B2C=Business-to-Consumer Market= businesses sell products and services to consumers for household or personal use B2B=Business-to-Business Market= businesses sell products and services to other businesses for use in their daily operations or for making other products and services B2B generally takes shorter & more direct channels of communication B2B promotional budgets are lesser as compared to B2C advertising B2C sale is to an individual whereas B2B sale is to an organization B2B businesses include complexity of business products & services & fewer customers buying larger volume INDUSTRIAL BUYER BEHAVIOR In Industrial Marketing, The Buying Process is more complex as compared to consumer Marketing. 6. xakU\;+ON<9u\$&'S=e>5)pz 0^#@Y`'W H6H|$vDLlpq|' n=XERrsq3tRqGRD4ZDtYiO
0000008116 00000 n Generally for routine purchases, the buyer or purchase executive may be the decider. Service, delivery and availability are somewhat important. ):N- Anc4G@:51Koes7,Rl5?2D ?22t=S)SlcrOn/{VY[}TX=3Po Zk=]Nj=hXi\p5ti&[>g9QhRHJg_iBr|c:p2HIxQWNE'WQqc#8M'SBh6~9^q,mux(f}jV6Xk0K~_0i%. 5. JFIF ` ` C Basic Definitions: Marketing: It is human activity directed at satisfying human needs and wants through exchange process. Products must be planned and designed to serve customers. 3. DECIDERS:Actual buying decisions are made by the deciders.
"FV %H"Hr ![EE1PL* rP+PPT/j5&uVhWt :G+MvY c0 L& 9cX& Write a brief note on Classification of Industrial Products and services. endstream 0000002747 00000 n 8. BUYING CENTER ROLES. endobj Purchase decisions are made mainly on rational/performance basis. Elaborate. Often users play the role of initiators. Understanding the buying center roles helps the Industrial Marketer to develop an effective Marketing Strategy. Industrial Demand is, therefore, called Derived Demand 1. The corollary to this that is that Vendor Reliability in delivery is the most important criterion while evaluating vendors in the most of the cases. Or Marketing is human activity directed at a) The recognition and anticipation of demand.
Services:- Industrial Buyers need many types of services like prompt and accurate information from supplier, application or technical assistance, spare part availability, repairs and maintenance capability and training if required. Products are mostly standardized and are mostly simple. Involvement of family members in the buying process. Legitimate power. GATE KEEPERS:They are individuals controlling flow of information regarding products & services to the buying centre. What are the characteristics of Business Marketing and outline the exchange transactions that normally occur in it. Accommodating I see your point of view. The Webster and Wind Model of Organizational Buying Behavior. 7. To accomplish this, buyers and sellers must work together, exchanging product specific information over long periods of time. Backward Integration: A company seeks ownership or control of its supply system example: - Crompton Greaves Ltd. went for Backward Integration by setting up its manufacturing plant for steel stampings, which were earlier supplied by GKW.
Compromising Let us split the difference. xYn7}wA ]QZBv` pu#;, X{8:rg?7Kp/,/Of]<<>,_?~dG'h>>BxL?`J(.5sC|4 ?Q;ZLu#CXvzq*Nd 98xc(YRK&ajvtpm Lm8U:c2`%R??ud3#5=wz\;F]Aa4.[=2HA Delivery / Availability:One of the prime objectives is to ensure that purchased goods and services are available or delivered as and when & where required, If not work will come to a grinding halt. But for high value and technically complex products, senior executives are the deciders.
Usually they are purchase [or materials] officers & executives. What do you understand by Buying centre Roles and six roles of buying center members? `|4P,w\A8vD$+)%@P4 0L ` ,\@2R 4f {60TP5stNm+ X0fjb9n_oS\U~t 0kB:n95''&. 5.
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<> It is derived from the ultimate Demand for Consumer Goods and Service. Channels are more direct and fewer intermediaries/middlemen. Purchase Decisions are Based on 1.
:]PG`ZF R4kMV v@~5&n5#+[R;CnBgT5xea#5Cn8M4:T ap&Dhf]BIf`TABBNpd~y@.&$k3+\OZDN%pQqZ6,3raZsouuzp7-. What constitutes an industrial demand for products/services? Forward Integration: A company seeks ownership or increased control of its Distribution Systems. Modified Re buy situation are not very difficult to handle. Review Questions: 1.
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Involvement of various functional areas in both buyer and seller firms. This would help an Industrial Firm to take strategic decisions on diversifying through Backward, Forward or Horizontal Integration, or by expanding its markets from domestic to international markets. Consumer Markets. Geographically disbursed and mass markets. They may be one or more Individuals involved in the buying decisions. Service, timely delivery and availability are very important.
Product Quality: The Product Quality should be consistent with the Specifications and use of the Product. [emailprotected] During periods of recession or reduced consumer demand, industrial firms reduce their inventories or reduce the production or do both. B2B Marketing NATURE OF INDUSTRIAL MARKETING.
4) Social Exchange is important in such areas as reducing uncertainty between buyer and seller, avoiding short term difficulties and maintaining the exchange relationship over a lengthy transaction period. Hence, product Quality is considered as one of the important objectives of purchasing. List Prices or maximum retail prices or MRP. endobj
6. <>>> Less Technical expertise required. Collaborating May be we can work this one out. 2.
2. stream Acceptable Payments and other Commercial Terms 5. <> PBs,;EJ1^>/6NMKmCojRX"im%Dbd#/5]szy8#E *Gc%m[hmt3,%ZZ)nN]; UkO%}dW}U+{1~8 m#sy&&s i4qc"M)qAL#]>jL ^ubk-[SZ GRlXbpA=v They may define the specifications of the needed Product .They may be shop floor workers, maintenance engineers, or R & D Engineers. Yg'zV4$IWGTN){I m2KUmyHhKUG PZ<0a]HiC4KmPR }9>Z`m -cxaO*NRt1$q".P!Q\9hqQbN56X+7i f0x6YKtTU@UnU=mw0t <>
THE INDUSTRIAL MARKETING CONCEPT The marketing concept holds that the key task of the organization is to define the needs of a target market and adopt the organization products or service to satisfy those needs more effectively than its competitors. Np%p `a!2D4! For example, a pump cannot be used for pumping water, if the electric motor or diesel engine is not available. The ease of exchange depends upon the ability of the seller to identify the buyers needs and the products potential to satisfy those needs 2) Information Exchange. Models of Organizational Buying Behavior There are two models available to provide a comprehensive and integrated picture of the major factors that combine to explain organizational buying behavior. A Material Handling company, for example, opened its own branches with warehousing facilities, in place of its agents, in order to improve customer service. This will reflect badly on the performance of the Purchase Function. 0000003739 00000 n 0000001767 00000 n rl1 The Relationships between the seller and buyers are highly valued and over a period of time they become stable because of a high degree of Interdependence. It is important for a B2B company to focus on building relationships, which also spread a positive word of mouth B2B companies are focused on educating various companies as they sell complicated products Marketing techniques such as newsletters, and product or service coverage & customized & direct selling is used Exchange transactions in the Industrial Market consist of: 1) Product or Service Exchange. Emphasis on advertising. ! The Consumers change their Purchasing Habits frequently. endobj 7 0 obj Enumerate the differences between B2B & B2C Marketing.
:&>H x i8_Lf3M}R.C&@3(~E=_D;H5c-k:|!1[xZ$W Before identifying the individuals and groups involved in the buying decision process, it is important to understand the roles of buying-center members. Providing customer satisfaction must involve all decision makers and not only marketing dept and will affect product design, demand analysis, manufacturing techniques, resource utilization and longrange profits.
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% They are normally assistants or junior persons in the purchase dept. Search for and qualifications of potential suppliers. 9. 0000002112 00000 n Products are technically complex and are mostly customized. It is demanded for the production of bicycles , motorcycles ,scooters, furnitures (steel tables and chairs), which are used by consumers .Thus demand for precision steel tubes is derived from the forecast of consumer demand for Bicycles, Scooters, Motor Cycles and Furniture. In view of this, there is a risk of becoming so enamored with a technical accomplishment or particular product parameters that the necessary flexibility for responding to customer needs in a competitive market place disappears. Marketing: It is human activity directed at sati. INDUSTRIAL BUYING PROCESS Purchasing Objective: Generally, the Purchase / Materials Management is defined as buying the right quantity, at the right price, for delivery at the right time and place It is the Managements job to define what is right for each dimension. Stable interpersonal relationship between buyers and sellers. 3. The buying process in Industrial Marketing is complex. Avoiding Better let situation cool down before we act. Reward versus coercive power. 5. INITIATORS :- These are the individuals who first recognize a problem or need, which could be resolved by purchase of a product or service. Coalition formation among certain buying center members. 3.
Purchase decisions are mostly made on Physiological/ Social/ Psychological needs. Power in conflict resolution. For instance, A Company reduced competition by acquiring the management control of some of its competing firms. For example the demand for PRECISION STEEL TUBES does not exist in itself. 0000007976 00000 n Rather much of the process of exchange is based on mutual trust. 2.JOINT DEMAND Joint demand occurs when one industrial Product is useful if other product also exists.
The most difficult buying situation occurs for a new task in buy phases of problem recognition, and determination of product characteristics and specification. 3. 0000002977 00000 n 0000062132 00000 n yR,A^WLKeNOJ~T7B0y |l#owC$eTYK)RP=qI hF!CM=Pq B rl2P DPF=nw_"R:h27}NI~q J*Yo4HzPI2! 2. The characteristics of the product or service involved have a significant effect on the Industrial Exchange process. 4. <>
Robinson formulated the buy grid framework which combined three types of buying situations (buy classes) with eight phases of buying decision process (buy phases).
Availability or Timely Supply 4. Exchange of Information between Specialists and Representatives from each functional area, from both seller and buyer organizations. <> Evaluation of proposals and selection of suppliers. "t a","H The Industrial Marketing Concept involves more than facilitating exchange with customers; it is a philosophical point of view that has basis the formation of a partnership between buyer and seller for the purpose of achieving the organization goals of both Too often, Industrial Organizations, tend to be technically oriented, much more interested in a particular product and its technical development. Customer benefits and need satisfaction, rather than physical product should be the centre of attention Customer satisfaction should be paramount in all corporate decision making. 1 0 obj Product Quality 3.
3. 2 0 obj xJ^/zLGV(XRt,TDWXRtUw UNDERSTANDING THE VARIOUS PHASES OF BUYING-DECISION MAKING IS USEFUL TO AN INDUSTRIAL MARKETER AS IT HELPS IN DEVELOPING AN APPROPRIATE SELLING STRATEGY. endobj However, evidence indicates that consumer markets have embraced the marketing concept more fully than their Industrial Counterparts. 7.
6. 6 0 obj Horizontal Integration: A company seeks ownership or control of some of its competitors.
stream All eight phases of industrial buying process are applicable to a new buying solution however, in case of modified re buy and straight re buy situations, only some of the buy phases are applicable. ",#(7),01444'9=82. Address: Copyright 2022 PDFCOFFEE.COM. <> endobj 0000000731 00000 n 3.
All rights reserved. They also control sales peoples meetings with members of buying of buying centre. <> $.'
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Hence the demand for industrial goods and services is derived from consumer goods and services. Industrial Marketing: (Business Marketing): Consists of all activities involved in the marketing of products and services to organizations ( i.e. 5.
Ronald F. Clayton Compliance with Product specifications 2.
Cost Effectiveness 6. Selection of an order routine. <>/XObject<>/ProcSet[/PDF/Text/ImageB/ImageC/ImageI] >>/MediaBox[ 0 0 612 792] /Contents 4 0 R/Group<>/Tabs/S/StructParents 0>> 5 0 obj O!
The Relationship between a Buyer and a Seller is Non-Personal.
0000003969 00000 n 6. DERIVED DEMAND:Industrial Customers buy Goods And Services for Use in Producing other goods and services.
Many aspects of an agreement between buyers and sellers in the Industrial Market are not fully formalized or based on legal criteria until the end of the transaction period.
7. Purchase Decisions Take Longer time and Involve many individuals from a) Technical Dept b) Commercial Dept/Materials Dept c) Finance Dept d) Corporate Management (Sometimes) In Industrial Marketing: 1. An analysis of the buyphases in relation to the buy-classes gave interesting results, which are summarized below. Competitive bidding and negotiated prices. It is important to ensure consistency in Product Quality to reduce the cost of inspection, interruptions in production process due to rejections and replacement of rejected material.
Three kinds of Organizational Purchases Straight rebuy a routine repurchase that may have been made many times before Characterized by vendor loyalty, review & feedback Modified rebuy Happens due to product & quantity type specification changes Happens when a new competitor enters the market offering the product @ lower price & more favorable terms & conditions than the existing vendor Customer goes through the process of vendor qualifications to review & feedback in the Decision Making Stage New-task buy a firm has a new need and the buyer wants a great deal of information Characterized by first time purchase of the products Involves considerable search for alternatives All eight buying phases come into play THE BUYGRID FRAME WORK Understanding organizational buying becomes easier if it is divided into different buying phases ( buy phases) and these phases are analyzed under different buying situations ( buy classes). 8.
Personal Objectives:- Industrial Buyers try to achieve both organizational purchase objectives and personal objectives.
5. 1. Mostly non personal relationship. 3) The Buying Decisions are based on Physiological, Social and Psychological needs of a Family or Household. 3. Decision can be taken by junior executive in the purchase dept. 2. What are 3 types of organizational purchases? jiV SNgB{A-ne% F{lH^5BzZ3W[?/3W=DS A^z" b) The stimulation of demand. The objectives of the purchasing function are briefly given below.