Machinery, manufacturing plants, materials, and other goods or component parts for use or consumption by other industries or firms.

Demand for industrial goods is usually based on the demand for consumer goods they help produce (called derived demand).

2

Adhesives Air Compressors Analytical Instruments and Scientific Supply Auto Repair Batteries Casters and Wheels Chains and Belts Chemical Processing Equipment Chemicals Cleaning Coatings Construction Supplies Factory Automation Filters Fluid and Gas Control Gases Gauges and Meters Gears and Transmissions Generators Hydraulic and Pneumatic Lubricants Machinery and Tools Magnets Materials Materials Handling Metal Nails Screws Fasteners Packaging Paint, Stain and Sealant Power Transmission Printing Pumps Rope and Rigging Safety Equipment Supplies Scales and Weighing Equipment Signage Springs Storage and Shelving Tanks Valves Hoses Fittings Welding Wire and Cable

3

They are classified as (1) Production goods, that enter the

production of a final product, such as the raw materials and component parts, or

(2) Support goods, that assist in the production process, such as fixed equipment and machinery, instruments, jigs, tools, etc.

4

Installations: Installations are major capital items that are typically used directly in the production of goods.

Accessory Equipment: Goods that fall into the subcategory of accessory equipment are capital items that are less expensive and have shorter lives than installations. Examples include hand tools, computers, desk calculators. While some types of accessory equipment, such as hand tools, are involved directly in the production process, most are only indirectly involved.

5

Raw Materials Raw materials are products that are purchased in their raw state for the purpose of processing them into consumer or industrial goods. Examples are iron ore, crude oil, diamonds, copper, timber, wheat, and leather.

Fabricated Parts and Materials Fabricated parts are items that are purchased to be placed in the final product without further processing.

6

Also called: Business-to-Business (B2B) and Organizational Marketing.

Definition: the creation and management of mutually beneficial relationships between organizational suppliers and organizational customers.

Industrial marketing (or business to business marketing) is the marketing of goods and services by one business to another. Industrial goods are those an industry uses to produce an end product from one or more raw materials.

Customer can be private firm, public agency, or nonprofit organization.

7

Creating value for customers with goods and services that address organizational needs and objectives.

Three major components:◦ All company activities should begin with, and be

based on, the recognition of a fundamental customer need.

◦ A customer orientation should be integrated throughout the functional areas of the firm: production, engineering, finance, R&D.

◦ Customer satisfaction is viewed as the means to long-term profitability goals.

8

IG are those goods used for resale, or in producing other go or in rendering services. Intended for use In making other goods.

IG are goods that become part of the product but have not undergone any more processing than what is needed for safe, convenient, economical transport and handling. 2 types of raw materials - FARM PRODUCTS such as poultry, eggs, vegetables, fruits. - NATURAL PRODUCTS such as lumber, fish , oil, minerals.

IG are Large and expensive items that do not become part of the final product but are expended, depleted, or worn out during the years of use. 2 classes: - buildings and land rights - major equipment such as computers, tractors, and generators.

9

IG does not become a part of the final product, but is less expensive than installation, more standardized, and shorter lived. Examples: writers, cash registers, desks and small power tools.

IG Become part of the finished product. Undergo more processing than raw material

A non-physical offerings that are valuable in supporting the operations of a firm. example: security, cleaning, engineering, advertising, consulting, legal, and others.

10

Identify customer needs Research customer behavior Divide market into manageable segments Develop new products/services Establish/negotiate prices Ensure proper Delivery, installation,

servicing of products Ensure adequate and timely supply of

products at correct place Allocate resources across product lines Communicate with customers Evaluate/control marketing programs

11

Marketing Concept Marketing Mix Market Segmentation Product Life Cycle Marketing is one-to-one in nature. It is relatively

easy for the seller to identify a prospective customer and build a face-to-face relationship.

Highly professional and trained people in buying processes are involved. In many cases, two or three decision makers must approve a purchase plan.

Often the buying or selling process is complex, and includes many stages (for example, request for proposal, request for tender, selection process, awarding of tender, contract negotiations, and signing of final contract).

Selling activities involve long processes of prospecting, qualifying, wooing, making representations, preparing tenders, developing strategies, and contract negotiations.

12

The technical characteristics of the product are important.

These products directly affect the operations and economic health of the customer.

The customer is an organization rather than an individual consumer, or family.

13

Products/Services being marketed Nature of demand How the customer buys Communication process Economic/Financial factors

14

More complex Large unit dollar value/Large quantities Custom/Tailored Various Stages from raw material to

finished goods.

15

16

Raw Material Extraction

Material Processing

Manufacturing Parts/Subassembly

Assembly

Distribution

Wholesale/Retail Trade

Final Consumers

Facilitators

Firms in Production Chain

Group Process

Formal

Lengthy

Loyal

Decisions based on risk and opportunity

17

Personal selling more important than mass paid advertising

Support sales with other promotional activities: advertising in trade journals, catalogs, trade shows, direct mail, WWW.

Message focused on technical, factual, and descriptive content.

Multiple audience members.

18