1. Fundamentals

2. Meaning of Industrial Marketing
 If a manufacturer or producer markets its products to
another business in the form of raw materials,
component parts or selling its services for
consumption, use, resale or for value addition then it is
called as Business Marketing or Industrial Marketing.
 Also called as B2B Marketing, or Institutional
Marketing, or Organizational Marketing.

3. Industrial Marketing Defined
 “Industrial Marketing consists of all activities involved
in the marketing of products and services to
organizations (i.e., commercial enterprises, profit and
non-profit institutions, government agencies, and
resellers) that use products and services in the
production of consumer or industrial goods and
services, and to facilitate the operation of their
enterprise” – Industrial Marketing Committee Review
Board.

4. More Definitions
 Bingham Jr. – “those activities that facilitate exchanges
involving products and consumers in business
markets.”
 Gross et al. – “ the marketing of products and services
to organizations rather than to households or ultimate
consumers. The purchase is made not for self
gratification, but rather to achieve organizational
objectives.”

5. Types of Business Market
 Commercial Enterprises
 Industrial Distributors / dealers (middlemen, resellers)
 Original equipment manufacturers (OEM’s) (Exide for Maruti Suzuki)
 Users / Industrial customers (TVS, Tata Motors)
 Government Customers
 PSU (BHEL, ONGC)
 Govt. Undertakings (Indian Railways, electricity boards, defence units)
 Organizational / Institutional Customers
 Public Institutions (Govt. hospitals, prisons)
 Private Institutions (Pvt. Hospitals, schools, colleges)
 Not-for-profit (charitable) organizations (Temple trusts, orphanage)
 Cooperative Societies
 Manufacturing units (State Sugar Coop Society, AMUL, PARAG)
 Non-manufacturing units (Cooperative banks, housing societies)

6. Scope of Industrial Marketing
 Flesh & blood of any market or economy.
 Provides strength to economic activity.
 Constitutes one of the largest markets.
 Volume of transaction more than that of consumer
markets.
 It is dynamic, challenging and accounts for well over
half of the country’s economic activity.
 Huge employment potential.

7. Differences Industrial vs. Consumer
Marketing
Industrial Marketing Consumer Marketing
1. Competition Oligopoly, Few
buyers.
2. Demand derived & volatile.
3. Market size larger, Global
perspective.
4. Buyers geographically
concentrated.
5. Purchases for in-house
consumption or onward
distribution.
1. Competition Monopolistic,
mass markets.
2. Demand direct , less volatile
3. Market size smaller,
Regional perspective.
4. Buyers geographically
dispersed.
5. Purchases for personal
consumption.

8. More Differences IM vs. CM
Industrial Marketing Consumer Marketing
6. Functional involvement of
buyer & seller. Relationship
oriented. Stable
interpersonal relationships
& reciprocity.
7. Key Account is very
important.
8. Large order sizes.
9. Purchase decisions based on
rational & economic factors.
6. Family involvement between
buyer & seller. Less technical
know-how, transaction
oriented, non-personal
relationships.
7. Key Account non-existent.
8. Small order sizes.
9. Purchases influenced by
emotional factors and are
impulsive.

9. More Differences IM vs. CM
Industrial Marketing Consumer Marketing
10. The purchase decision is
formal, lengthy, complex
and risks are high.
11. PLC is shorter, Service levels
are high. Quality is of prime
importance.
12. Branding is of parent
company.
13. Technical specifications are
of prime importance.
10. Purchase decision is
relatively shorter, less
complex and risk is relatively
low.
11. PLC is longer, Service levels
are less. Quality may not be
vital.
12. Branding is of individual
products.
13. Technical specifications less
important

10. More Differences IM vs. CM
Industrial Marketing Consumer Marketing
14. Distribution is generally
short, direct with few
linkages.
15. Product knowledge &
delivery is crucial.
16. Bidding, negotiation, leasing
are very common.
17. Promotional pricing is rarely
used.
18. List prices only on standard
items.
14. Longer channels, simple
with multiple linkages.
15. Product knowledge &
delivery not very critical.
16. Bidding, negotiation, leasing
are uncommon.
17. Promotional pricing is very
common.
18. List price & MRP is common
practice.

11. More Differences IM vs. CM
Industrial Marketing Consumer Marketing
19. Promotion through personal
selling, trade shows,
catalogues, direct mailers
and trade journals.
20. Sales promotion is not
common.
21. Packaging hardly has a
promotional role.
19. Promotion through mass
media advertising.
20. Sales promotion is very
common.
21. Packaging plays a
promotional role.

12. Economics of Industrial Demand
 Derived Demand – demand is dependant on and
derived from the direct demand of the product. (e.g.
Demand of Exide batteries is derived from direct
demand of Maruti cars)
 Joint Demand (Joint product set purchased e.g. 12
sets of products to operate a phone line – preferred
from a single supplier; water pump + DG set)
 Cross Elasticity of Demand (e.g. Aluminum panel if
price of wood or steel rises)
 Fluctuating Demand