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industrial marketing study guide
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Industrial marketing study guideHow to study… the slides, class discussions, the “text” book (class lectures are extremely important) class
discussions are key, the theory of the class discussions you'll find in the slides, start with the class
discussions and the slides and if there's something that you are unsure about then you'll find the answer in
the prescribed material. Know the basics, they will be asked. Theory that needs to be studied. Being here
and knowing what has been mentioned in the slides. (he makes it somewhat obvious in the slides that it
could become part of a question, ex, what are the four characteristics of B2B, Demand is… derived, inelastic,
joint, fluctuating.
SIC, demand, elasticity, ethics,
Chapter 1
Mac vs a bunch of bolts… The difference lies in…?
The difference lies in functionality
Supplier → Manufacturer → Agent → Wholesaler → Retailer → Consumers
R500 R42 R58 R75 R80 R100
We work with 160,000 suppliers
We have 273 factories around the world, which require supplies
We need to equip 500 sites and office in 170 countries
Unilever’s Procurement teams are committed to delivering business results by focusing on:
o Driving growth through open innovation with suppliers, clear execution and our commitment to
on-self availability.
o Fueling efficiencies through cost savings, improved performance, and payment terms.
o Working towards 100% sustainable sourcing in partnership with our suppliers.
o Ensuring suppliers adhere to our Supplier Code of Conduct
IT PUTS PRESSURE ON SUPPLIERS
Checklist for unilever supplier audit (see slides)
GENERAL MOTORS - PURCHASING DEPARTMENT
$125 billion annual spend on industrial products and services
This is more than the GDP of Ireland, Portugal, Turkey and Greece
1 350 professional buyers - each spend more than $50 million annually
APPLE
Apple → is all about value
Thinking about where the products start to where they get to… the ethics etc.
Our goal, in a nutshell is to obtain the best products and services within tight timeframes, at a cost that
represents the best possible value to our customers and shareholders. If that sounds like a daunting task, it’s
the same one we assign ourselves.
,The question is… what is value? What is the meaning of value?
Meeting needs, fixing needs, meeting expectations. → Relationship marketing
Apple’s sourcing process is designed to ensure equal and fair treatment of suppliers so that they
can fully participate in a competitive procurement process.
We ask suppliers wishing to participate in the process to register with our Supplier Information
Database (SID), which enables Apple procurement professionals to access key information about
potential and current suppliers, including capabilities, product/service descriptions, Universal
Standard Products and services Classification (UNSPSC) codes, contact information, and so on.
EVEN GOOGLE…
B2B or B2C?
More than 100 000 business customers (advertisers)
Plus more than 200 million searches a day by internet users
SIZE OF THE MARKET
See slides
B2B now over 5x the size of B2C (?)
IN THE FINAL INSTANCE… IT’S ALL ABOUT SATISFYING NEEDS
WHAT’S THE DIFFERENCE?
Consumer Goods and Services
o Are for consumers, the final customer
Industrial Goods and Services
o Are used in making consumer goods and services
DIFFERENCES AND SIMILARITIES BETWEEN B2B AND B2C BUYING (PG 53) NB
Similarities - if buyers are peope too, then they can make decisions based on misperceptions,
emotions, and peer pressure just as easily as consumers. Moreover, some consumer purchases
involved a great deal of technical complexity and information searches, turning the supposed
“emotional” buying process claimed to be common in B2C markets into quite a rational, fact-based
approach.
o Notions of time
o The role of the customer
o Market structure
o The unit of analysis
Differfencefe in b2b nn b2ce manrefeing, buying
Buying maoiife
Dfemann of B2B i lnrgfely bn fe on femann in B2C
o Dferiife Dfemann - Thfe femann for nll b2b pro ucet , ulimantfely fepfen on thfe femann for
ceon umafer pro ucet . B2b ifen or mau t maonitor thfe feifelopmafent in efey ceon umafer manrefet
nn trnn lntfe thfema into feffeceiife manrefeing npproncehfe .
, o Con umafer manrefet cenn ceon i t of maillion of in iii unl , whferfen fnr ffewfer ceu tomafer manefe
up orgnniznionnl manrefet . It i ceomamaon for n manll pfercefentngfe of thfe fe ceu tomafer to nceceount
for n lnrgfe pfercefentngfe of pfen ing in n pnriceulnr fegmafent, giiing thfema ceon i fernblfe
purcehn ing powfer.
o Airlines marketing to the business consumer
o In consumer markets, evaluative criteria are thought to be based on social issues (such as
status) and level of utility (the extent to which the product meets the customer’s
practical needs), whereas in B2B markets, utility is still vitally important, but price and
value are usually felt to be of greater importance. For ex. In the pages of business week
magazine, Sharp’s document imaging products (photocopiers) promise to ‘meet your everyday
business needs’ and to ‘improve your productivity’’; while CDW, who supply IT hard managers
know the needs of today’s businesses
o The organizational purchasing process is often more complex than the consumer buying
(complex in a different way) due to the demanding technical issues so often associated with
industrial goods.
The key characteristic of organizational buying behavior is that several individuals may be in
involved in this buying decision, combining different backgrounds, perspectives and buying
motives.
o It is the supplier's job to identify the buying center members, determine their roles in the
decision-making process, determine their buying motives, and translate all this
information into an effective marketing approach.
o An effective marketing approach combines different communication means and
messages targeted at all key buying center members. When the buying center includes
people with a technical background, with much specialized expertise, for example, a vendor
may have someone from R&D join the sales person making the sales call.
o In between purchases they can maintain the relationship with their customers by
offering product upgrades, selling support services or leasing the product.
o This strategy results in a constant stream of revenues and establishes an ongoing
relationship, thus giving the vendor an edge over the competition when it is time for a new
purchase.
Market characteristics drive marketing strategy
o Even though several b2b markets closely resemble consumer markets and consumer
marketing approaches may be also useful for b2b, this does not negate the inherent
differences that often exist between both types of markets.
Same basic concepts and tools
o Con umafer manrefeing nn b2b manrefeing u fe thfe nmafe bn ice manrefeing ceoncefept , uceh n
manrefet fegmafentnion, tnrgfet ceu tomafer , nn inlufe propo iion.
o Ex. Rfelnion hip manrefeing feifelopfe for b2ce but ub feuufently npplife to b2b manrefet .
o Thfe manin imailnrity i thnt both fellfer tnrgfet thfe efey fecei ion-manefer nn thfeir intferfe t
Selling to consumers and B2B customers
o Many companies sell to both, ex. Insurance, computers, carpets, toilet paper, energy, flower,
shampoo, financial services, cars, airline tickets, etc.
o Dunl manrefeing - IKEA tnrtfe in B2B nn thfen wfent to B2b thi i u unlly how thi hnppfen
o These companies practicing dual marketing need to make two kinds of marketing decisions:
How will we target both markets?
How will we organize the marketing function internally?
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