What is Industrial sales? B2 B Marketing Institutional sales Government

Salient Features 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

Buying Situations Routine items new specifications new items

Systems Buying Buying a total solution from one seller

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

Buying Centres Initiators Users Influencers Deciders Approvers Buyers Gatekeepers

Major Influencers Environmental Organisational Interpersonal Individual Cultural

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

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

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.

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

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

Buyer tactics Commoditization Multisourcing

Procurement Orientation Cost reductions Quality improvements Early supplier involvement programmes

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

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

Routine order products delivery price reliability supplier reputation

Procedural problem products Technical service supplier flexibility product reliability

Political problem products All the previous points mentioned in the previous two slides

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

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