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 Industrial, Consumer, or Business-to-Business Marketing - Which One Do You Need?
 Seven Steps to Greater Profitability Through Target Marketing

Industrial, Consumer, or Business-to-Business Marketing - Which One Do You Need? 1

Dave Cranmer, Phase 3 Consulting LLC

If you're a manufacturer, or a business that supplies things to manufacturers, you know that industrial marketing - marketing and selling industrial products to other businesses - isn't the same as consumer (selling to individuals) or business-to-business (selling to other businesses) marketing. The differences can mean the difference between being successful and not. In this article, we'll explore the differences (and the similarities) so you'll be better positioned to market and sell your products and services to the right customers.

There are seven major areas where consumer, business-to-business, and industrial marketing differ:

bullet Product complexity. First, industrial products can be technically very complicated, highly customizable, frequently fit into some other system or component, and can be difficult to sell. Industrial and technical products range from off-the-shelf bearings to custom-engineered machines of incredible complexity. The more customized the product, the more customized and personal the marketing strategy. Typically, they become part of the another company's products, which are then sold to the end consumer or to another company in the supply chain.

Business-to-business products and services can also be technically complicated, and can include the industrial products category as well as the products and services a business uses on a day-to-day basis to run the business. Examples in this category range from computers to pencils.

Consumer products can also be technically very complicated, but often aren't as difficult to sell because the uses they're put to and their benefits are obvious to the end consumer. They range from the automobile to home computers to detergent.

bullet Who's the buyer? Typically, businesses that buy industrial and technical products, and large businesses have very knowledgeable buyers and often have buyer teams. Their job is to analyze products and purchases in terms of user benefits -dollars or return on investment - and beat you up on price.

Consumer marketing presupposes sellers that have all the knowledge and power and passive, inexpert buyers who can be influenced to purchase through advertising techniques. The Internet changes some of this lance by providing information about products and companies in one easy place.

bullet Bids and quotes. Industrial products are often sold through a complicated bid or quotation process that usually includes elaborate specifications to define the product wanted. Many business-to-business products are bought through a similar, process with less elaborate specs.

Consumers, on the other hand, buy or don't buy based on listed or known discounted prices, although the Internet allows individual consumers to do some homework before buying to know what a good price should be.

bullet Advertising and promotion. Advertising and promotion of industrial products is just the start of the selling process. It's unlikely that you'll get a sale based solely on the ad you place in a trade journal, but it can tell you who you need to follow up with to continue the sales process. You won't, though, identify the buying influences and influencers of material-handling robots, based on ads alone.

For consumers, a newspaper ad, website promotion, or other announcement of a sale or money-off coupon leads directly to in-store or website sales.

bullet Market information. There are many databases available to tell a company about consumers - demographics (where you are) and psychographics (how you behave) - and on consumer products. These databases make it very easy for consumer-based companies to do market research and target the people who are most likely to buy what they're selling.

That's not true for industrial or business-to-business markets. Information on these markets is often hard to get, is generally qualitative rather than quantitative, and can require considerable industrial experience to gather and interpret.

bullet Product range. How you market and sell your products changes drastically with product type, length of sales cycle, product size, and number of decision makers. Selling, promotion, and pricing strategies for selling low-unit-price, standard motors to known accounts are pretty straightforward. The buyer knows what's needed, the sellers know or can easily find out who the buyer is, and the specifications are relatively simple. Capital equipment designed for production lines, though, is usually large, complex in design, and has high unit prices that must be justified by returns to the company and approved by the board of directors. That means a long selling cycle, lots of people involved in the process, and significant design and installation issues that need to be solved before the sale can be completed. Finally, for consumer products, it's mostly about getting known and getting your product through a distribution channel at a reasonable price.

bullet The Internet. How you can and should use the Internet varies widely, depending on what you're selling and to whom. If you're a consumer products company, or one whose products are relatively standard and small, you can market and sell directly to the end user over the Internet (provided you've done everything right). If you're an industrial products company, or are selling to another business, you might be able to sell some things directly, but for larger, more complicated products, you're probably better off using your website to provide information about your products and company in ways that buyers find useful, and to support your sales force.

In the end, as products and services move toward the industrial end of the spectrum, they become more complex and customized with higher prices and longer sales cycles. That means the advertising, selling, pricing, and product development strategies are going to be more complex and more specific to the situation. Focusing on the seven factors above will help put you in a better position to know what your customers will be looking for and how you can provide it.

1 Originally published in The Business Monthly (Howard County, Maryland) Volume 10, Number 6, June 2002


© 2002-2004 Phase 3 Consulting, LLC All rights reserved.
David C. Cranmer, President
18629 Queen Elizabeth Dr.
Brookeville, MD 20833

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