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Industrial buying process for Marketing Management Mcom sem 2 Delhi University


Industrial buying process for Marketing Management Mcom sem 2 Delhi University

Industrial buying process for Marketing Management MCOM sem 2 Delhi University

characteristics of industrial buying behaviour-:

Demand

This is derived demand that rests upon the demands of the ultimate consumer. The demand of an industrial buyer changes keeping with the changes in the ultimate consumers’ demand. For instance, demand of electricity generator is determined according to the demand made by the consumers.

Geographical location

Industrial buyers are concentrated in certain geographical area whilst consumers’ market remains scattered all over the region or country. This is because industrial market is determined considering transport facilities, cost and other factors such as climate condition, raw materials, labour supply, etc.

Few Number of Buyers

The number of industrial buyers remains small but the volume of sale is large. So, industrial marketers buy goods or services in large volumes or bulk quantities paying up a big amount of price.

Direct Channel Of Distribution

A huge bulk of consumer goods and services are sold out through a complex structure or ring of wholesalers and retailers. This structure keeps producers and consumers outside its ambit and acts as the bridge between them. Whereas, there is direct contact between an industrial buyer and seller.

Rational

Industrial buyers use rationality and rational methods in buying goods or services compared to the ultimate consumers or B2C consumers. They want to derive more information about the quality, utility, features, and technical use of products. Industrial buyers are more aware of quality, delivery, services, pricing etc. of products.

Professional

Compared to a B2C consumer, industrial buyers are rational, systematic, and professional. Over time, professional buyers develop formal methods of buying.

More Complex

In an industrial buying process, different people participate in buying decisions. An industrial buyer has to know the role of users, motivators, decision makers and ultimate buyers who determine the overall buying process while taking decision on buying.

Industrial buying process for Marketing Management MCOM sem 2 Delhi University

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Industrial buying process for Marketing Management MCOM sem 2 Delhi University

some important aspects of Industrial Purchasers are:

  • Like all purchasers they are assigned a budget and are asked by their managers to stick to it –> consequently they need visibility and market trends from suppliers
  • They do not take purchasing decisions alone, quality and supply chain managers for example may be important influencers.
  • In many cases having only one supplier is too risky, they will ensure supplies from different suppliers
  • Supplying company and customer company are often involved in Long Term relationships, trust is key
  • They will expect suppliers to offer competitive solutions but also will expect the supplier to be a source of innovation and development.

The basic difference is Industrial market (Factor Market) is the market which produces goods and services, with inputs like labour, land, and machinery and these goods are consumed by Consumers in Consumer Market (Product Market).

Industrial Market:

This is the market where you find buyers and sellers of goods of industrial inputs like, labor, machinery, land, capital and more.In economics this is also called as factor markets.

Industrial buying process for Marketing Management MCOM sem 2 Delhi University

Consumer Market:

In this market the good and services produced by the industrial products will be consumed by the consumers. In economics this is also called as product markets.

These two factors are defined in economic activity. Economic activity is the cycle how goods and services are produced and consumed. Industries and companies employ labor to produce goods and services, these goods and services are in turn consumed by the labor employed and other public making profits to industries and companies. Now companies pay wages to labor employed. So this is a continuous process and called as economic activity.

This very simple concept, using this concept economists will try to analyse the demand and supply of goods and services.

Industrial buying process for Marketing Management MCOM sem 2 Delhi University

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Industrial buying process for Marketing Management MCOM sem 2 Delhi University

Marketing management is the organizational discipline which focuses on the practical application of marketing orientation, techniques and methods inside enterprises and organizations and on the management of a firm’s marketing resources and activities.

Structure

Marketing management employs tools from economics and competitive strategy to analyze the industry context in which the firm operates. These include Porter’s five forces, analysis of strategic groups of competitors, value chain analysis and others. Depending on the industry, the regulatory context may also be important to examine in detail.

In competitor analysis, marketers build detailed profiles of each competitor in the market, focusing on their relative competitive strengths and weaknesses using SWOT analysis. Marketing managers will examine each competitor’s cost structure, sources of profits, resources and competencies, competitive positioning and product differentiation, degree of vertical integration, historical responses to industry developments, and other factors.

Marketing management often conduct market research and marketing research to perform marketing analysis. Marketers employ a variety of techniques to conduct market research, but some of the more common include:

  • Qualitative marketing research, such as focus groups and various types of interviews
  • Quantitative marketing research, such as statistical surveys
  • Experimental techniques such as test markets
  • Observational techniques such as ethnographic (on-site) observation

Marketing managers may also design and oversee various environmental scanning and competitive intelligence processes to help identify trends and inform the company’s marketing analysis.

Industrial buying process for Marketing Management MCOM sem 2 Delhi University

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