What is Industrial sales?

1. What is Industrial sales? B2 B Marketing Institutional sales Government

2. Fewer buyers Large buyers Closer customer - supplier relationship Geographical concentration of buyers Derived demand Inelastic demand Fluctuating demand Professional purchasing Several buying influences Multiple sales calls Direct purchasing Reciprocity Leasing Salient Features

3. Buying Situations • Routine items • new specifications • new items

4. Systems Buying Buying a total solution from one seller

5. Systems Contracting Single supply source supplies MRO (maintenance,repair.operators)

6. Initiators Users Influencers Deciders Approvers Buyers Gatekeepers Buying Centres

7. Major Influencers • Environmental • Organisational • Interpersonal • Individual • Cultural

8. Environmental • Macro views eg.production levels,investment,consumer spending,interest rates,technological changes,political - regulatory,eco - friendly developments • You may like to store up raw materials fearing an impending scarcity or you may like to sign up some long term agreements

9. Organisational • Purchase department • Cross - functional roles - team operation • Centralised purchasing - economical,better deals,easy for supplies to interact at one point • Decentralisation of low price items • Internet purchasing • Long term contracts • Supplier evaluation • JIT

10. Interpersonal • The seller has to be sensitive to the group dynamics existing in the organization involved in the buying process. To that extent any prior information researched before the purchase decision is taken is invaluable for the selling organization.

11. Individual • ‘keep it simple’ • own expert • want the best • want everything done • ‘negotiators’

12. Cultural Factors Necessary to know the local culture. Business buyers buy to reduce operating costs or satisfy social or legal obligations

13. Buyer tactics • Commoditization • Multisourcing

14. Procurement Orientation • Cost reductions • Quality improvements • Early supplier involvement programmes

15. Buying Process • Problem recognition - new product,spares,purchase material unsatisfactory,opportunities to buy some materials economically • General need description - evolved in a team process • Product specifications - engineering,manufacturing.technical • Supplier search

16. Proposal solicitation - quotations,proposals,presentations • Supplier selection • Buying situation - routine order products,procedural problem products,political problem products

17. Routine order products • delivery • price • reliability • supplier reputation

18. Procedural problem products • Technical service • supplier flexibility • product reliability

19. Political problem products • All the previous points mentioned in the previous two slides

20. Multisourcing • Hedging against risks of non - supply • supplier can have IR problems • machine breakdowns • insurance against ‘twisting arms’

21. Institutional Buyers • Business is big • minimum specifications • lowest price • domestic supplier preference • buyer is unlikely to understand technicalities • time taking • patience