Industrial marketing - business to business marketing

" Sales begin long time before the salesman picks up the phone "

Buying center in industrial marketing

Buying center

When selling to companies the first question is who has the decision to buy?
Is it one person or a group?
When we sell to one person it can be easier, but not necessarily. When selling to a group we call it buying center.
What is a buying center and how it works?
Buying center is a group of professionals, employees of the company who are involved in the decision making for a specific buying.
We can meet different roles:
–    Promoters: they make the first step or proposal
–    Users: they will use it effectively, they help to make a choice on technical/ professional level
–    consultants / influencers: they can offer advices
–    buyers: they will select the supplier, they negotiate and sometimes make even the decisions
–    approvers: financial department
–    decision maker: they approve the big value buying
–    gate keeper: they can have (negative) influence on the selling/buying process.

Let us see an example: a regional trade company wants to buy It and communication equipment to his sales force. The promoter could be the sales manager or an It manager. Users will be the sales forces. Consultants/ influencers the It and communication professionals, who knows different equipments and technology: laptop, palmtop, wi-fi, LAN, mobile net etc. The buyers will be the employees of the procurement department. The decision maker could be the CEO, if its about a large investment. Gate keeper could be the assistant manager/ secretary when observes some negative behavior on the selling team.

Why is important to analyze all these information? If we want to have a successful selling campaign we have to focus on every member of the buying center, offering the optimal sales argument for each member. Let’s see some sales argument for each:
–    for the final user: we have to convince them that the machine, equipment etc. will be perfect for their work: easy to use, handy, comfortable, they can have faster information from the market, faster and easier communication with the company etc.
–    for the sales manager: he will have a bigger control on his team, easier communication etc.
–    for the financial department: the new equipments will save costs, etc.
–    for the decision maker: his whole company will benefit from the purchasing: growing selling, closer control on sales forces and market and finally bigger profits.

So, the first step when selling to a buying center is to define the partners and their roles and influence in the decision making, then to offer the optimal sales argument for decision makers.

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Business to business sales forces

Personal selling is the oldest way to marketing. Ancient China, Egypt, Phoenicia, Rome was helped to develop by the traders, who based their profit mostly on personal selling.

In the last 150 years the market changed, and new forms of selling were introduced. We can mention self-service shops, catalogue selling. Most of them decreased the importance of personal selling. The products’ presentation and buying became more and more impersonal. Anyway in the beginning 21st sales forces are still the major factor of a company’s success on market.

Sales forces in industrial marketing are the major communication and selling channel. The key to success or failure.

We must not forget anyway, that the various marketing functions—sales force, advertising, customer service, product policy, market research—must work together. All of these functions must be parts of a focused marketing strategy and coordinated from the customer’s point of view.

Sales forces in business to business fields are in permanent contact with the customers, they are the company’s “eyes and ears”.  This is very important that they pick up information missed by other means and do this systematically. Marketing department must coordinate their effort to gather every significant data of the market: new product, new trends, prices, customers’ behavior and needs, competitions’ moves. And the most important thing is to analyze these INFORMATION and USE IT.

In order to achieve all the objectives (including sales target) a professional sales representative must have the following characteristics: very good communication skills (personal, technical), professional competence in his specific field (steel products, high tech, building or real estate, machinery etc), courtesy, reliability and responsiveness.

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Features of industrial marketing

What are the main features of industrial marketing?
Let’s start analyzing the way that a company makes a decision in industrial procurement. Sales arguments, objective and subjective influencing methods have their purpose, too. A buyer manager can be easily convince by an old business friend, a professional salesman from a partner company maybe only for old time‘s sake, but… But he has to offer some solid sales/ buying arguments, with number and facts to convince his bosses and colleagues about the opportunity of the procurement. These sales arguments can be numbers, information about the products, its capacity, commercial terms, logistics and support.
We cannot pretend from a purchasing manager, even the most correct and loyal one, who (influenced emotionally by some happy food TV ads) just bought some snacks or desert for his child at 8 am, when taking him to school, and in half an our to take a major decision regarding a procurement only based on numbers and technical data. And don’t forget the personal influence of the highly trained sales force.
Sales forces’ importance in business to business marketing. Let’s make a comparison FMCG market vs. b to b market. On FMCG markets the most useful and efficient communication channel (till now) is mass advertising. On the industrial markets personal relationships, personal selling is very important. You can have the perfect product, at very low price, but if the sales forces don’t work properly and don’t build long term partnerships you’ll never have success. We cannot forget that salesmen or sales engineers who offer high tech product or special business services at high value for procurement managers or executives need special skills, product and technological knowledge and wide experience. Their profile could be very different from an “avon lady”, salesman offering food and beverage for small neighborhood shops or a simple salesman who sales for the population.
Other features of business to business market:
– less buyers, but with high impact
– closer seller – buyer relationships
– professional procurement (decision making)
– more sales visits
– indirect demand influenced by the consumer markets
– unstable demand, geographically focused

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Industrial marketing intro

We don’t see very often TV ads for example mining industry equipments or other technical equipments or stuff. Why is that?

Are industrial or business to business companies using marketing or advertising? If yes, how do they do marketing?

Why advertising agencies focus (almost exclusively) on FMCG? Why do de treat industrial products and services like on outkast?

We have a large marketing experience in both categories. In business to consumer fields we met fast moving consumer goods – FMCG, services for large public, retail, tourism. And on the other side, the business to business fields: steel and building material trading, buildings, logistics – transports, IT – webdesign and online marketing, industrial sewing machine trading… Everywhere we met new, interesting marketing and selling methods,  tools and strategies.

The first aspect we noticed was that market target and decision making mechanisms define the style, the conception and the methods of marketing for each specific domain.

Very often innovative methods with huge success in one domain proved to be a total failure in other appropriate domains. Some marketing tools that make big sales for sure in the case of beer, could be totally inefficient for plumbing or sanitary stuff. And that means bog loses for the company, wasted money.

Of course, the basic precepts of marketing activity are the same for each domain. We can reduce to the following basic steps: analyzing a situation, diagnose the market of the company or product, making marketing plan or marketing strategy, implementing it and controlling. Little bit scientifically: we start with a market research (qualitative and quantitative), we analyze internal environment, we identify the possible developing directions. One of the key moment is the proper using of the most commented SWOT analysis.  Meaning not only mentioning the strengths, the weaknesses, the opportunities and the threats, but analyzing them like parts of a complex system, with multi-directional influences, we can establish powerful concept of future development or marketing strategy.  Then we can establish marketing plan: product, price, promotion and place (distribution) policies. We identify cleat objectives, which motivates and also are reachable, action plan with strict deadlines and tasks.

Even in the 21st century business some company ignore the fact that establishing a strategy must start with the mission and vision of the company and the general objectives of it. There are a lot of companies who “start marketing” when they already have major problems and are losing the marketing. It’s crucial to make early plans and to adapt continuously to the market and economy challenges. Without planning we only take a promenade or we fight for surviving. And this is also true for a small bakery and an industrial mammoth.

More to follow: the importance of the sales force, online marketing for b to b company, expo and fairs, industrial selling, marketing places, en-gross market, and much more

Szekely Szilard

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