Industrial marketing - business to business marketing

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

Features of organizational buying

Features of organizational buying

What is organizational buying/selling?
Companies need different materials, equipments, services or products to maintain their activity. We talk about business to business or industrial marketing when:
–    a manufacturer sells to another manufacturer, for ex. Equipments
–    a manufacturer sells to a trader
–    or a trader (en-gross) sells to a retailer.
Reporting to consumer goods selling this business is usually more quite, almost invisible for large public. Anyway there is about fat cash.
What are the main features?
–    big volume and fat cash
–    industrial equipments, machines or products for reselling
–    low number of buyers, but with great capacity
–    special services
–    intensive relationship between seller and buyer
–    professional procurement
–    large number of factors to influence decisions
–    the importance of sales forces
–    derived demand – it depends on consumer goods demand
–    unstable demand
–    geographical concentration of the buyers

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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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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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