This document discusses industrial sales and business-to-business marketing. It outlines the key characteristics of institutional buyers, including that there are fewer but larger buyers, closer supplier relationships, professional purchasing, and multiple influences on buying decisions. The document also covers different types of buying situations, such as routine purchases, new specifications, and systems buying. It provides an overview of the major influencers on organizational purchasing, including environmental, organizational, interpersonal, individual, and cultural factors.

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

2. 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

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. Buying Centres
• Initiators
• Users
• Influencers
• Deciders
• Approvers
• Buyers
• Gatekeepers

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