Business Explain: Marketing Industrial Products

Showing posts with label Marketing Industrial Products. Show all posts

What are typical characteristics for B2C markets?

1. Buyer is usually passive.

2. Relationship between buyer and seller is indirect.

3. Goods are often bought for end use.

4. Numbers of buyers and sellers are many.

What are typical characteristics for B2B markets?

1. Buyer is usually active.

2. Relationship between buyer and seller is direct.

3. Goods are often bought for production, not by end users.

4. Numbers of buyers and sellers are few.

How does the characteristics that define the uniqueness of industrial products lead naturally to relationship marketing?

Relationship marketing → based on mutual cooperation, trust and joint beliefs. The purpose of this marketing type is considered to enhance marketing productivity by achieving efficiency and effectiveness; great interdependence and partnering leading to a lower cost and achieving competitive advantages. Both within business-to-consumer and business-to-business markets, relationship marketing functions. However, relationships between businesses, B2B, normally emphasises long-term and thus demands a higher level of relationship and commitment.

It seems natural for companies producing industrial products to go for a relationship marketing strategy. To fulfill the needs of industrial customers, a marketer must understand those needs as well as how they will change when they buyer strives to compete in global markets that call for long-term relationships.

Why might a multinational company seek ISO 9000 certification?

ISO 9000 is a set of international standards on quality management and quality assurance developed to help companies effectively document the quality system elements to be implemented to maintain an efficient quality system. They are not specific to any one industry and can be applied to organizations of any size. ISO 9000 can help a company satisfy its customers, meet regulatory requirements, and achieve continual improvement. However, it should be considered to be a first step, the base level of a quality system, not a complete guarantee of quality.

What part does industrial fairs play in international marketing of industrial goods?

A trade fair is an exhibition where participants are able to show and sell their products and services. It is also used to establish and maintain contacts. At these fairs, companies can sell their products, reach prospective customers, contact and evaluate potential agents and distributors, and get their marketing out to foreign countries.

What role do service, replacement parts and standards play in competition in foreign marketing?

Service and replacement parts

Since competition has become so effective, not only must the product be designed properly, but also include good service, prompt deliveries and have the ability to furnish spare and replacement parts without delay. Willingness to provide installation and training can thus be critical to the decision-making. Many countries lack trained personnel, but still require the latest technology, which results in a high need for technical training. After-sales service - service available after the product has been sold, such as repairs.

The reputation of a manufacturer is closely followed by quick delivery in replacement parts as important factors in purchasing decisions. As it turns out, some products can sometimes be replaced with new parts with a value almost five times the initial purchasing cost, which indicates that the aftermarket is not to be forgotten.

Universal standards

A problem in international sales of industrial products arises from the lack of universal standards. Standards for manufacturing highly specialised equipment are lax or missing, as well as the standards for which measurement system to use. They may seem like minor problems, but evolve into something bigger when affected products are scheduled for export.

What is meant by "the adequacy of a product must be considered in relation to the general environment within which it will be operated rather than solely on the basis of technical efficiency"?

The perception of quality rests solely with the customer. Part of the customer's evaluation of a product is the level of technology reflected within it, together with products standards, support services, and the price relative to competitive products. A commonly misinterpreted concept of quality amongst industrial marketers is that good quality is equal to technically good quality, which is not true.

To exemplify, a product with a certain feature which stands out from its competitors might not result in good quality, since that feature is not always of importance to the customer. Best quality is best because the product adheres exactly to specified standards that have been determined by expected use of the product. Product quality, including dependability of suppliers and timely delivery, are some of the most important variables that influence managers' purchasing decisions.

What are the differences between consumer and industrial goods, and what are the implications for international marketing?

B2B refers to the industrial marketing; marketing or inter organisational buying and selling. The largest difference to marketing for consumer goods lies in the source of information; in industrial markets, buyer are well-informed, highly organised and sophisticated in their purchasing behaviour. And industrial purchasing is influenced by multiple factors.

Most commonly, a buyer is not the end user, but continues to sell the product throughout the supply chain, until turned into a consumer good. Thus, the interaction between the organisations and a network of relationships is more important than finding a marketing mix.

Motives are different as well, since industrial buyers are seeking profit while final consumers seek satisfaction. Finally, the number of buyers and sellers is much smaller in the industrial market than the consumer market.

Together these factors; informed buyers, profit as an objective, and small number of buyers and sellers, set the foundation for specific buying patterns and demand characteristics, and the emphasis on relationship as a marketing tool.