Industrial Market vs Consumer Market

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Industrial Market Vs Consumer Market Market Structure

Understanding Industrial markets

Industrial Market Geographically conc. Fewer buyers (relatively) Big buyers ( small number of large buyers)

Consumer Markets Geographically dispersed Mass markets Free Market (large number of buyers)

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Industrial Market Vs Consumer Market Market Structure - Example

Understanding Industrial markets

Industrial Market ( Rutile for Paints) Major ten cities. Fewer buyers (example 500) Oligopolistic buyers with clout To access international market (Asian, Nerolac, ICI etc.)

Consumer Markets (paints) Even in small villages Mass markets ( 1 billion ) Small customers normally competition is within the country.

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Industrial Market Vs Consumer Market Buyer Behavior

Understanding Industrial markets

Industrial Market *Evaluated for functionality rational/task motive to buying. *Purchasers are experts & focus is more on performance/service. *Higher interaction with the supplier. * Formal processes.

Consumer Market *Social / psychological factors are important. *Family involvement & focus more on product per se. *Nor personal relationship with the supplier. * Less of formal processes. 3

Industrial Market Vs Consumer Market Buyer Behavior - Example

Understanding Industrial markets

Industrial Buyer for AC *Evaluated for functionality ( evaluation by tech committee) *Purchase through tendering Process & brand less important. *Discuss technical details, price negotiation etc. *Formal processes of documentation etc.

Customer for AC •Should look good & match the décor. *Want to buy LG only (because neighbor has) *Go to a shop, select, negotiate pay & forget. * Less of formal processes. 4

Industrial Market Vs Consumer Market Products

Understanding Industrial markets

Industrial Market * Technical complexity and customized. * Service, delivery and availability is very important.

Customer Markets * Standardized. *. Service, delivery and availability is somewhat important.

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Industrial Market Vs Consumer Market Products - Example Samsonite Outsourcing soft luggage * Each component is as per Samsonite specification. * Service, delivery and availability is very important as it affects supply chain of the company.

Understanding Industrial markets

Customer for Samsonite soft Luggage * Standardized product range to select from. *. Service, delivery and availability is somewhat important, can wait for a Specific color / size.

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Industrial Market Vs Consumer Market Decision making

Understanding Industrial markets

Industrial Market * Distinct observable stages * Multiple influencers and decision makers.

Consumer Market * Unobservable mental stages, not very clear pattern.

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Industrial Market Vs Consumer Market Decision making - Example

Understanding Industrial markets

Industrial Buyer – Soaps for Workers canteen * Need identification, selection, procurement etc. * O.K. from the workers union, agreement by contractor, purchase departments negotiation & placing order.

Customer * Low involvement buying and impulse purchase (the exact choice criteria difficult to identify) & varies from situation to situation.

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Industrial Market Vs Consumer Market Distribution channel characteristics

Understanding Industrial markets

Industrial Markets * Shorter, more direct & fewer linkages between seller and buyers.

Consumer Markets * Indirect and multiple linkages

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Understanding Industrial Market Vs Consumer Market Industrial Distribution channel characteristics -Example markets

Hotel buying Cold Drinks * Supplied directly by the distributor, may even be serviced by company employee or a regular basis.

Customer for Cold drinks * Normal distribution style of distributor to retailer to customer. Virtually no interaction with company.

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Industrial Market Vs Consumer Market Promotion

Understanding Industrial markets

Industrial Markets *...
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