Business Marketing

Dr. Neeraj Singh

Marketing & Strategy Area
Indian Institute of Management Rohtak
Business Marketing
S. No. Evaluation Components Weight

1 Simulation (Post Mid-term) 10 %

2 Group Project 20 %

3 Class Participation 15 %

4 One Quiz 15 %

5 End Term 40 %
 B2B exchanges are omnipresent in the value network

Source: https://www.ibbaka.com/ibbaka-market-blog/value-networks-systems-thinking
B2B/ Industrial Marketing
• The marketing of goods and services to commercial enterprises,
governments, and other nonprofit institutions for use in the goods
and services that they, in turn, produce for resale to other industrial
customers.

• By contrast, consumer goods marketing is the marketing of goods and

services to individuals and family units for personal consumption
and to wholesalers and retailers in consumer goods distribution
systems
Industrial Marketing
• In industrial markets, goods are usually bought for processing and
subsequent resale.
• Industrial customers buy to support the profit-making or nonprofit
functions in which the organization is engaged
Industrial Products
Category Description
Technically complex and requires a substantial investment.
Heavy Equipment Examples include radiology equipment, diesel engines, and
industrial air compressors.
Involves smaller investments and is within the purchase
Light Equipment range of a larger customer base. Examples include
portable air compressors and hand tools.

Composed of central equipment and peripherals, delivering

Systems a comprehensive solution to the end user. Application
software and networking are crucial.
Industrial Products
Category Description
Sold as commodities with competing sellers offering comparable quality. Buyers primarily consider price in
their purchasing decisions. Examples include crude oil, iron ore, and cotton fiber. Marketing and sales
Raw Materials
systems often have few intermediate layers, and transactions may occur through low-cost intermediaries
like brokers.
Undergo further processing from raw materials to serve as primary inputs for manufacturing. Can be
Processed Materials differentiated by adding value for specific applications. Examples include rolled steel, fabric, and plastic
polymers. Marketed through conventional sales and distribution channels rather than spot markets.
Used up or consumed by the end user in regular business operations. Key purchase criteria include the
ability to obtain regular reorders. Examples include coolants, abrasives, and medical syringes.
Consumable Supplies
Consumables used in maintenance, repair, and operations (MRO) focus on ease of availability due to
difficulty in predicting breakdowns.
Purchased for incorporation in the buyer's end product. Examples include engines, motors, and other
parts. Components are used in their purchased form as part of the purchaser's products, distinguishing
Components
them from supplies and materials. Key relationships vary, with some core components requiring a close
technical and commercial relationship, while others may focus on low-cost and efficient sales approaches.
Offered in industrial markets, including engineering services, management consulting, and contract
maintenance. Can involve comprehensive design, installation, and operation of major systems or support
Industrial Services
services such as transportation. Logistic support provided by industrial distributors can also be viewed as a
form of service.
The nature of demand is Derived
• Demand for a product or service that comes from its use as an input
in the production of another product.
• These inputs, known as factors of production, are not directly
demanded by consumers on their own.
• However, they are essential for the production of final goods that
consumers want.
• The demand for these inputs is derived entirely from the demand for
the final product.
• In other words, if there is no demand for the final product, there
would be no demand for the inputs used to produce it.
Derived Demand

Suppose RoadRubber Tires Inc. receives an order from an automobile manufacturer to

supply tires for 10,000 cars. Each car requires 4 tires. Therefore, the derived demand for
tires in this case would be:

• Number of tires demanded = Number of cars * Tires per car

• Number of tires demanded = 10,000 cars * 4 tires per car
• Number of tires demanded = 40,000 tires

In this example, the derived demand for tires is 40,000 tires, based on the demand for
10,000 cars.
RoadRubber Tires Inc. would need to produce and supply 40,000 tires to fulfill the order
from the automobile manufacturer.
Complex Buying/Selling
• In industrial markets, the buying process is usually more complex and
involves multiple departments within an organization.
• For example, when purchasing industrial equipment, various
departments such as purchasing, engineering, finance, and
manufacturing may be involved.
• Additionally, the purchase may require approval from top
management before it can proceed.
• This complexity arises from the need to consider various factors,
technical requirements, budgetary considerations, and the overall
impact on the organization's operations.
Concentrated Consumer Base
• In industrial markets, the customer base is usually much smaller.
• In many cases, a small number of customers represent a significant portion
of the industry's buying potential.
• Industrial marketers, especially those selling high-value items like satellites
or power generation equipment, may have only a handful of customers.
• Additionally, due to the specialized nature of industrial markets, there is
often a requirement for specific infrastructure or capabilities to support
the products or services being offered.
• This may include specialized facilities, technical expertise, or logistical
support. Industrial marketers need to consider and cater to these
infrastructure requirements in order to effectively serve their customers.
BLiSC
Oxford-Cambridge Arc: A B2B innovation
hub

https://www.bbc.com/news/health-55041371
Genome Valley, Telangana
B2B market values cutting edge technology
• Industrial products often gain a competitive edge in the marketplace through
technology and superior performance. Manufacturers of components like
semiconductors and disk drives continuously strive to improve the
performance-to-price ratio in each successive generation of their products.
• While consumer product manufacturers may also introduce innovations, the
emphasis is more on providing "solutions" rather than solely focusing on
technology.
• On the other hand, in many consumer markets, consumer tastes and loyalties can
resist change. An example of this is the reintroduction of Classic Coke in response
to consumer disappointment with the New Coke. Consumers preferred the taste
of the "old" Coca-Cola over the "new" version. In consumer markets, factors like
style, handling, and comfort often play a more significant role in the selling
proposition, rather than purely technical factors.
High level of customization
• Industrial products often require high levels of customization to meet
the specific technical requirements of customers, while consumer
products generally have standardized features.

• Customization in industrial products is crucial as they are used in the

manufacturing process of subsequent products. This customization
can extend to hardware, software, and peripherals.
Made-to-order
• Industrial products often involve made-to-order manufacturing,
where production begins only after receiving customer orders.
• This job-shop approach is common in the industrial sector, whereas
consumer goods are typically produced in large-scale batch or
continuous flow operations.
• Industrial manufacturers often maintain low levels of finished-goods
inventory, triggering manufacturing operations directly in response to
customer orders.
• In contrast, consumer goods manufacturers rely on finished-goods
inventory to meet sales forecasts, rather than individual customer
orders.
Case Study: PrecisionPro Industries

PrecisionPro Industries is a renowned industrial manufacturing company that specializes in

made-to-order production. In a recent case, a leading aerospace company, AeroTech Solutions,
approached PrecisionPro Industries with a unique manufacturing challenge. They required a highly
specialized component for their next-generation aircraft, which demanded strict specifications,
durability, and precision engineering.
PrecisionPro Industries engaged in thorough consultations with AeroTech Solutions to fully
understand their requirements. With their team of skilled engineers and technicians, they
meticulously designed and developed a customized solution tailored to meet the aerospace
company's exact needs.
Utilizing advanced manufacturing techniques and cutting-edge machinery, PrecisionPro Industries
successfully produced the specialized component with exceptional precision. Rigorous quality control
measures were implemented throughout the production process to ensure the highest standards of
performance and reliability.
The outcome was a resounding success, with AeroTech Solutions integrating the custom-made
component seamlessly into their aircraft. PrecisionPro Industries' commitment to excellence and
personalized manufacturing solutions has solidified their position as a trusted partner in the
industry, showcasing their ability to deliver tailor-made products that exceed customer expectations.

What value is Precisonpro offering

Market Selection and Development
• In industrial markets, customer education and market development
are crucial due to the role of technology.
• Industrial customers may not initially appreciate or show enthusiasm
for untested products.
• It is the marketer's responsibility to demonstrate the value and use
of the product through intense trials and productivity analysis.
• Industrial marketers often create and build markets for their products
rather than solely addressing existing needs.
 The conceptual schematics of digital platforms

The digital platforms are sociotechnical systems

consisting of technical elements, organizational
standards, processes, lead firms and a dynamic
network of complementors.1,2,3

Complementors on the food delivery platforms (for Dynamic interactions

instance) include: 2,3
• Physical restaurants
• Hyper-local logistic partners
• Technology developers
• Social media modules
• Banks and payment partners (including mobile wallets)
• Real estate entities (For Dark kitchens and cloud
kitchens)
✔ C1, C2, C3…Cn are complementors
Source: Authors’ conceptualization based on literature review.
✔ L is the lead firm
✔ U is the end users of the platform

1. De Reuver, M., Sørensen, C., & Basole, R. C. (2018). The digital platform: a research agenda. Journal of information technology, 33(2), 124-135.
2. Cenamor, J. (2021). Complementor competitive advantage: A framework for strategic decisions. Journal of Business Research, 122, 335-343.
3. Cusumano, M., Yoffie, D., & Gawer, A. (2020). The future of platforms. MIT Sloan Management Review, 46-54. 22
Business Marketing

Dr. Neeraj Singh

Marketing & Strategy Area
Indian Institute of Management Rohtak
How did DMC captured more than 50% market share

The key differentiating point between the DMC and its

competitors was...
How Did DMC captured more than 50% market share

• A key factor in their success was a skilled salesperson hired in 1974,

who had experience in Texas with electrical equipment sales and oil
field electrical application engineering.
• DMC's competitors lacked salespeople with comparable skills in the
region, allowing DMC to establish an early presence and secure a
strong market position.
What are the key offerings of
Dominion?
What are the key offerings of Dominion?
What Threat is DMC facing from Hamilton oil
company
• What is the core competence of Hamilton?
• What is the core competence of DMC?
• Why DMC is reliant on Hamilton?
• Who is Upstream and Who is Downstream in the value network?
What Threat is DMC facing from Hamilton oil
company
• In early 1985, DMC faced a potential loss of its market share due to
tests conducted by Hamilton Oil Company.

• John Bridges, head of Hamilton's electrical engineering department,

determined that DMC's motor ranked third among those offered by
Spartan Motors, Ltd., and the Universal Motor Company of Canada.
Who are the Buyer groups of DMC?
Who are the Buyer groups of DMC?

Why OEM should are getting the highest discounts?

Why small users are getting the least discount?

Draw the value network of Canadian
oilfields motor industry.
• Show exchanges.
• Show competitors.
Alternatives
Reengineer
present 7.5 hp
Reduce price of motor to
10hp motor increase
torque=Spartan’s
motor

Redesign 5hp Persuade Bridges

motor with and Hamilton
higher torque executives
Business Marketing

Dr. Neeraj Singh

Marketing & Strategy Area
Indian Institute of Management Rohtak
Business Marketing

Dr. Neeraj Singh

Marketing & Strategy Area
Indian Institute of Management Rohtak
1 2

3 4
Thank You