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Industrial marketing consists of all activities involved in the marketing of products and services to organizations which may be commercial,

profit or non profit institutions, government agencies or resellers that use products or services in the production of consumer or industrial good and service, and to facilitate the operations of the enterprise.

Product exchange Information Exchange Financial Exchange Social Exchange

Industrial products are the products, which are used for processing or for use in conducting a business. Thus the distinction between a consumer product and an industrial product is based on the purpose for which the product is bought.

Materials & Parts. Capital Items. Supplies and Services.


Geographically Dispersed Monopolistic competition

Geographicaly Concentrated Oligopolistic Competition * Products : Technical Complexity, Customized, Service very important

Market Structure:

Standardized. Service somewhat important.

Buyer Behavior :

Functional Involvement. Interpersonal Relationship

Family Involvement No personal Relationship.


Unobservable mental stages. Indirect & multiple linkages. Emphasis on Advertising List Prices

Decision Making Channels Promotion Price

Distinct observable stages.

Shorter & Direct

Emphasis on Personal Selling

Competitive Biddings and Negotiating.

Demand for the industrial demand develops from the ultimate demand for consumer goods and services. Demand is derived from the choice and likes of consumers. Characteristics of Demand in B2B Marketing : - Derived Demand. - Joint Demand (e.g., Complementary Goods) - Cross Elasticity of Demand (e.g., Substitute Goods)

Purchasing in Commercial Enterprises

Multiple Influencers Technical Sophistication - Value Analysis: (developed by General Electric) involves systematized techniques for reducing costs and improving the performance value of materials, components, and manufacturing processes. An intensive appraisal of all the elements of the design, manufacture, or construction, procurement, inspection, installation, and maintenance of an item and its components, including the applicable specifications and operational requirements in order to achieve the necessary performance, maintainability, and reliability of the item at minimum cost. Value analysis, as

Purchasing in Government Units

(Selling to government very complex & time consuming) Widely Dispersed Markets Complicated Procurement Laws

Institutional Purchasing

Purchasing in the institutional market involves practices lying somewhere between commercial enterprises and government. Quite similar to government buyers due to the constraints of political considerations and dictates of law; on the other hand private institutions are managed like commercial enterprises.

Task Oriented Objectives :

Price Services Quality Assurance of Supply Reciprocity

Non Task Objectives

Mutually Beneficial interactions Reputation Friendships