Business Marketing Perspective & Organizational buyer behavior
The Business marketing or Industrial marketing is the marketing of goods and services to commercial enterprises, governments, and other nonprofit institutions for use in the goods and services that they, in turn, produce for resale to other industrial customers. By contrast, consumer goods marketing are the marketing of goods and services to individuals and family units for personal consumption and to wholesalers and retailers in consumer goods distribution systems. What consumers buy, they use for themselves or for consumption by members of a family. Individual customers buy to support the profit-making or nonprofit ...view middle of the document...
Market segmentation: Consumer markets can be segmented by psychological or sociological factors as lifestyle or attitudes, but industrial markets are more likely to be segmented by industry characteristics, purchase quantities, or technological requirements.
Advertising: Consumer marketers often use advertising to establish a brand image, but industrial marketers use advertising more often to communicate specific price and performance information. Brand image in industrial markets is achieved by a combination of product quality and service that accompanies the delivery and installation of the product.
Pricing: With most consumer goods, retail prices are easily communicated and assumed to be set on a “take it or leave it” basis, with no haggling over price. However, industrial marketers set prices primarily by three methods. In cost plus pricing, the buyer pays the seller’s full cost of providing the product or service, plus an agreed-on profit margin. This method of pricing is often used for large contracts of uncertain length. In competitive bidding, potential sellers submit bids to the buyer, explaining their prices and product offering. Competitive bidding is often used for large projects or for those projects where the buyer seeks a product customized to very explicit set of specification. In published-list pricing, the manufacturer uses a printed price list to communicate its prices. Published list are often most appropriate for standard, low-priced items that are sold to a wide variety of buyers.
Product Policy: Industrial products are often sold on the basis of technology, product features, or other functional properties. This is a result of a more rational buying approach on the part of industrial buyers.
Channel of Distribution: Industrial markets usually have narrower customer bases than consumer markets, making it economically viable to reach at least a segment of the end users, especially the large ones, directly. Moreover, given the technical nature of the product and the complex buying process, it is often a sales team rather than a lone salesperson who closes the sale to an industrial customer.
Marketing Research: Because of the heavy R&D and up-front engineering expenditures involved in developing and launching new industrial products, they are often tested sequentially at various critical development stages at customer sites. This is feasible because of the separability of the product’s functions and features. This type of intensive testing at the customer site, called beta site testing, requires very close cooperation between the manufacturer and the customer.
Industrial buying behavior
Industrial marketing begins with understanding industrial buyers, not only those with purchasing manager titles but those, as well, in other functions manufacturing, engineering, marketing, and general management who strongly influence purchase decisions. In what follows, we consider, first, the economic factors that shape purchase...