Industrial advertising

Industrial Advertising
Industrial Advertising deals with information about

business goods and service. The items under business goods are machinery, material, technology and processes to industrial producers. Industrial product market is specialized and concentrated. The number of industrial buyers are limited.

Objectives of Industrial Advertising

It helps to improve the image among current and

potential customers Advertising of Industrial products conveys technical information and specification of the product Industrial advertisement helps the customer to know the product represented by the salesman better Since Industrial advertisement supports the salesman, the overall selling cost is reduced.
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Features of Industrial Buying

Industrial purchases made are straight forward

Prices are to be negotiated

Competitive bidding is encouraged Specification varies from one manufacturer to

another Differing requirement of several department is to be met

Business-to Business and Consumer Focus Communication: A Contrast

Elements Business-to-Business Consumer focus Communication Communication

Decision making authority

Here the buying Consumer and decision decision is made by the maker may be the buying centre or same committee consisting of members drawn from various departments
Rational appeal, straight talk, demonstration. Advertising and promotion takes a supportive role Involvement is collective Emotional appeal and use of different execution style such as drama, humour, fantasy, animation etc. Ad and promotion plays a lead role The buyer is generally involved in the buying decision of the

Nature of communication

Involvement of the buyers

Elements

Business-to-Business Consumer focus Communication communication

Integration of communication elements

Does not need sophisticated technology to provide message. Focus would be on demonstration
Personal selling gets the highest budget allocation and less money is allotted to ad and promotion

This requires sophisticated technology to create attention and recall value

Bulk of the marketing money is spent on market research, ad and promotion

Budget allocation

Evaluation measures Message content

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Directly related to sales Directly related to of products reach and coverage Mainly focused on feature, benefits and other value additions offered along with the The communication message is designed to create awareness, interest, emotion,

Use of creativity

Not much of a scope for creativity since it does not have any impact on target group Technical journal and magazines

Great scope for creativity as it acts as a nerved center of success and failure of ad TV, radio, print media etc

Media used

Business-to-Business Communication
A communication focusing on potential customers

who purchase in bulk for reproducing products/services (focus here is on manufacturers and service-providers) Objectives in Business-to-Business Communicaton:
Create awareness about products and services to the target

group The company must establish a favourable image Must generate interest among the target group and motivate them to try the products Proper communication with regard to features and benefits of acquiring the products should be passed on to the buyer as a part of knowledge bank

Business-to-Business Promotion
Advertising

Direct marketing
Internet Sales promotion Public relations Interactive media

Ad depicts the rational appeal

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Industrial Ads are designed to encourage customers to contact the marketers by providing phone numbers and email

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Industrial Ad emphasizes on various features

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Schneider Electric established customer care centres to interact with the customers
Toll-free Numbers: 1800 180 170 7 1800 103 0011 General Numbers 01244222040 FAX Number 01244222042 E-mail: incare@in.schn eiderelectric.com

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Target Market in Industrial Advertising

The first issue is whether the person who makes

the buy decision can be identified or not The next problem is to determine whether apparent decision makers are the real decision makers A buying committee formed from a cross-section of the organization with members from different disciplines.

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Goals of Industrial Advertising

To increase awareness and knowledge of the

product, the selling company, and create a favourable attitude and image
To make the sales executives job easier and

lower the cost of selling

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Special Issues in Industrial Selling

Market related Fewer, larger buyers Close supplier-customer relationship Professional purchasing Several buying influences Multiple sales calls Derived demand Inelastic demand Fluctuating demand Geographically concentrated buyers Direct purchasing Segmentation : Demographic
Industry: Which industries should we serve? Company size: What size companies should we serve? Location: What geographical areas should we serve?

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 Operating Variables
Technology: What customer technologies should we

focus on? User or nonuser status: Should we serve heavy users, medium users, light users, or nonusers? Customer capabilities: Should we serve customers needing many or few services?

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 Purchasing Approaches
Purchasing-function organization: Should we serve

companies with highly centralized or decentralized purchasing orientations? Power structure: Should we serve companies that are engineering dominated, financially dominated, and so on? Nature of existing relationships: Should we serve companies with which we have strong relationships or simply go after the most desirable companies? Purchasing criteria: Should we serve companies that are seeking quality? Service? Price?
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 Situational Factors:

Urgency: Should we serve companies that need quick and sudden delivery or service? Specific application: Should we focus on certain applications of our product rather than all applications? Size of Order: Should we focus on large or small orders?

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 Personal Characteristics
Buyer-seller similarity: Should we serve companies

whose people and values are similar to us? Attitude toward risk: Should we serve risk-taking or risk-avoiding customers? Loyalty: Should we serve companies that show high loyalty to their suppliers?

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 Product, Price and Channel

Product Specification: If the product is tailor-made there

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is more pre-purchase technical discussion and more post-purchase follow up by salesman. Negotiates price: In industrial product, price negotiation is inevitable. Advertising in this regard place a negligent role Short and direct channel: In industrial product, there is a direct contact between the customer and the supplier. Buyer related: Individual buying takes place in consumer buying. In industrial buying, there is a buying centre. The process is as follows: Engineers identify the problem, they give specifications or standards. Purchase manager negotiates with suppliers and evaluates several vendors. Finally, they select one and recommends for final decision to be taken by the management.

Typical Process of Industrial Buying

The manufacturing /production department identifies

the need for a component or tools, machinery, or any thing else to overcome a problem The department head fives a requisition by describing the specification of the product or service This requisition form is sent to Materials department for procurement The Purchase/Materials department start searching for a vendor who can supply this item As soon as a qualified vendor is located, the quotations are asked indicating the terms of delivery, such as mode of payment etc

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 Materials department receives necessary

information from the vendor One among those who have submitted proposals, will be chosen after discussing with all those concerned within the organization Order is placed through a copy called purchase order. When the material is received, all formalities are completed with respect to paper work.

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Buying Situations
Straight Rebuy: The purchasing department reorders on a

routine basis (e.g., office supplies, bulk chemicals) and chooses from suppliers on an approved list
Modified Rebuy: The buyer wants to modify product

specifications, prices, delivery requirements, or other terms. The modified rebuy usually involves additional participants on both sides. The in-suppliers become nervous and have to protect the account. The out-suppliers see an opportunity to propose a better offer to gain some business
New task: A purchaser buys a product or service for the

first time (e.g., office building, new security system). The greater the cost or risk, the larger the number of participants and the greater their information gatheringand therefore the longer time to take a decision.
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Advertising Issues
The media vehicles used here are very different

from those that are used for consumer products. Trade publications, direct mail, catalogues are some of the popular vehicles.

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Trade Shows
Many companies use trade show as a bridging tool.

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The most common goal of exhibition is to get sales lead for the work-force to pursue. Along with this, the goal is to give information to prospects with special emphasis on new products. Some preparation is required by the firm to ensure customer participation, such as advertising in the newspaper or a journal about its participation in the show. Also what will be exhibited in the show should be made clear to the customers. Therefore prior awareness is required by the customers. Most customers may be sent letters by the firm which will be much appreciated. After the show, there must be follow up and a visit to the customer premises, to ascertain the buying interest of the customer. Cost benefit analysis should be done by each firm after the show.

 Advantage of trade shows:

It is less costlier than having multiple sales person Those who are interested to learn will attend Helps to build customer data base An easy way to learn about competitors galore

Splendid route to introduce new products

Helps in getting publicity Can exhibit items which are bulky. Eg. Tractor etc

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