Description
It explains the industrial marketing environment, various participants in industrial marketing environment like buyers, suppliers. The macro environment under which industrial marketing exists, forces in macro environment like economic influences, ecological influences, physical environment influences, cultural influences, technological influences, demographic influences etc.
Industrial buyers and sellers operate in a
dynamic environment , one constantly posing new opportunities and threats
How well buyers and sellers understand the environment within which they operate, and how well they communicate with one another, foretells their capabilities of profiting from or being damaged by the environment’s many surprises and shocks
The effectiveness of the buyer – seller interface hinges on monitoring and adapting to or developing strategies to affect environmental changes that directly impact either or both organization
The traditional view of marketing has been one of achieving organizational goals through satisfying the needs of identified markets by adapting the organization to deliver the desired satisfaction “ more effectively and efficiently than competitors “
Marketing strategies have been” viewed as a set of adaptive responses “ i.e. marketing strategies appear to begin with a system of environmental constraints Marketers gather and analyze information on forces in the environment ( e.g. Competitors, politics, and economics ) and implement strategies to adapt to environmental demands
Adaptation strategies are not sufficient in today’s turbulent environment Marketers must adopt a proactive orientation so that marketing strategy can be developed not only to adapt to but to change or affect , when possible, the environment in which the firm operates
Government
Macro environment
Publics
Buyer- seller interface
?
Due to several interfaces that exist between firms that interact directly with one another, we refer to the first level as the interface
level
?
?
The next two levels we refer to as the publics and the macro environment All three discernible levels of a firm’s environment exist within the purview of final environmental entity, government
?
The interface level involves those key participants who immediately interface with an industrial firm (buyer or seller) in facilitating production, distribution, and purchase a firm’s goods and services.
Supply inputs are transformed by a company and its competitors into outputs with added value that move on to end markets, the move being made through the firm’s interface with industrial distributors and dealers, manufacturer’s representatives , and company’s own sales force That move is possible by a firm’s interface with facilitating institutions such as banking , transportation, research and advertising firms
SUPPLIERS
MARKET SEGMENTS
BUYERS
FACILITATORS
?
SUPPLIERS
? ? ? ? ? Labor Capital Raw material Component parts Equipment
?
BUYERS
? Company manufacturers ? Distributors / dealers ? Competitors
?
FACILITATORS
? ? ? ? ? ? ? Manufacturer’s representatives Distributors / dealers Transportation firms Warehouse firms Advertising agencies Marketing research firms Banks and insurance companies
?
MARKET SEGMENTS
? Government ? Commercial enterprises ( User, OEM, Industrial distributor ) ? Institutions
?
? ?
?
Industrial firms are part of a chain of organization Each firm is both buyer and supplier As buyers, firms form less populated markets than in the consumer area Their buying decisions are more technical, logical, and expert
?
?
They recognize that what they buy and how they buy can affect the cost and efficiency of their manufacturing process or alter the quality & performance of the outputs products that are sold to firms farther along the industrial chain To deal with such interdependencies , industrial firms form long – term , buyerseller interfaces
?
?
Individuals in various functional areas, e.g. research, engineering and production , meet their counterparts in other firms to exchange information on technological developments and processing innovation They will be expecting more assistance in the areas of technical innovation , manufacturing , and other cost- cutting areas from their suppliers
?
?
?
The sphere of activity of the various participants in the interface level of the industrial marketing environment is greatly influenced by the multiple publics Publics are distinct groups that have an actual or potential interest or impact on each firm’s ability to achieve its respective goals Publics have the ability to help or hinder a firm’s effort to serve its markets
Financial publics
Independent press
Public interest groups
General publics
Internal publics
?
Financial institutions influence the ability to
obtain funds
?
Favorable or unfavorable press affects
?
?
marketing activities Interest groups demand social responsibility and Attitudes of the employees and the general public toward a firm’s activities and products affect a firm’s ability to do business
Since the ultimate function of business is to serve society, publics are a composition of tangible interest groups that 1. Indicate how well that service is being performed 2. Actively work to assure that society is in fact being served and 3. Act as a societal sounding board upon which business can make its case heard
?
?
The dynamic forces of the macro environment have a major impact on both the publics and interface levels of the industrial environment
ECONOMICS
ECOLOGY
PHYSICAL ENVIRONMENT
CULTURE
TECHNOLOGY
?
?
Because of derived nature of industrial demand, changes in economic variables that affect consumers’ discretionary purchasing power have an impact on the industrial producer When consumers tighten their belts and wait for better economic times, demand for raw materials , component parts , and associated services also tighten
?
?
?
All around the globe, industrial organizations face public reaction and government intervention when industrial activities pose potential danger to the earth’s resources Government officials are becoming more concerned with environmental damage to the earth’s water, land, air and people e.g. Chemical & pesticides, disposal of waste materials , RTI Act
?
?
The ability to produce and market goods and services at a profit necessitates a favorable combination of inputs needed Certain advantages stem from the natural endowments of environment, such as raw material, water and power, or
?
?
The favorable combination of production inputs, such as adequately skilled management, low – cost labor , and transportation facilitates Industrial suppliers who are able to work out low-cost combination of these factors of production often have a differential advantage over their competitors
?
?
Location and transportation considerations , particularly when procurement requirements necessitate a close buyer – seller relationship, are often of paramount consideration in the supplier- sourcing decisions As transportation costs increase, buyers prefer suppliers whose mining, manufacturing or storage facilities are nearby
?
?
Culture mores, customs, habits , norms and traditions greatly influence the structure and function of an organization as well as the inter personal relationships of organizational members Cultural differences have little impact on the product specifications of industrial products, but there is a growing trend toward joint venturing with foreign partners to take advantage of production techniques that are the products of other cultures
?
?
?
Technological developments and changes in the industrial market strongly affect both buyers and sellers Buyers are worried whether their profitability and market acceptance will be favorably impacted by changes in suppliers’ product design or manufacturing process Suppliers are equally concerned whether their customers will perform well enough in the downstream markets to maintain or increase their share of derived demand
?
?
Industrial firms can not ignore the demographic environment because of the derived nature of industrial demand World population explosion and the changing population structure of the world provide both opportunities and threats
?
?
Government, charged with administering and controlling nations and their sub divisions, transcends the industrial marketing environment As world competition increases, industrial marketer is constrained to give greater attention to the actions of the governments around the world , as well as within the country
?
?
In performing its multi- faceted functions, government enables and facilitates , but also hampers and disallows , industrial actions In the interface environment , government laws, regulations , and activities affect all participants
Primary functions of Government are to
1. Protect
companies from each other 2. Protect consumers from unfair business practices 3. Protect the larger interests of society against unrestrained business behavior 4. Ameliorate income inequality in society 5. Provide economic stabilization through control of unemployment and inflation
These functions include
1. 2.
3.
4. 5. 6. 7. 8.
Regulating agencies Laws/ politics Program funding Research funding Import/ export regulation Levying taxes Providing social programs Controlling interest rates
Government’s diversified actions include :? Providing input monies by funding programs ? Effecting changes in interest rates and taxes ? Specifying product safety standards ? Sponsoring research & development ? Issuing regulations that protect the environment ? Facilitating actions that are believed to be in accordance with the desires of society that it regulates
?
?
Government may become attentive to public opinion aroused by the independent press. That opinion may involve some ecological problem that can only be replaced by banning a particular pesticide – a pesticide that must eventually be replaced by another that will ultimately be developed through new and different technology.
?
?
Government , in its omnipotence , does sometimes yield to advocacy in the face of logic, to public opinion despite heavy investment , and to the free press regardless of a firm’s best intentions Governmental regulations and laws often favor whichever environmental entity has the most influence in New Delhi, the state capital or the city hall
?
An industrial firm’s own best interests are particularly furthered if and when that firm anticipates government regulation by changing before being mandated to do so ( example Tariff drop in Text Messaging by Reliance, Adopting to Euro IV emission norms by TATA Motors )
?
?
Industrial marketers have frequently reaped considerable benefit by anticipating , planning , and assisting government with some new research project or product development. E.g. new metal alloys and fabrics developed by NASA space projects has spawned entire product lines aimed at industrial and consumer applications with similar temperature , weight, or volume requirements
?
?
?
As government transcends all levels of the industrial environment, it is capable of influencing and being influenced by environmental elements at all levels Each element of the public and macro environment level influences government ( intentionally or unintentionally ) Example :-
?
?
Public interest groups fight intentionally to save wilderness area , while the demographic consideration of a growing segment of older citizens influences governmental actions unintentionally when planned social security increases the are side tracked. Setting of SEZs, National Rural Employment Guarantee Scheme( NREGS) , development of vaccine for H1N1 etc are some of the latest examples
?
The political environment includes international trade restrictions , government attitudes toward business and social activities, and government funding of selected programs
?
Protection against foreign imports is brought about through government pressure on foreign nations to restrict exports “ voluntarily “ through quota restrictions, through the use of tariffs, or through imposition of artificial barriers , such cumbersome rules and regulations
?
?
? ?
?
Buyers and sellers in the industrial market are firmly regulated by governmental agencies, i.e. agencies that are charged with the responsibility of protecting business from each other Protecting consumers from businesses Protecting the larger interests of society from unrestrained business behavior E.g. FDA, MRTP, PCB etc.
?
?
Both buyers and sellers must keep careful watch on pending regulation to ensure that their respective business plans will meet with government approval Industrial organizations respond to government agencies and legislators by seeking legal advice from internal or external legal staffs as to what they can and can not do
Independent strategies
Competitive aggression
•Product differentiation •Aggressive pricing •Comparative advertising
doc_696761257.pptx
It explains the industrial marketing environment, various participants in industrial marketing environment like buyers, suppliers. The macro environment under which industrial marketing exists, forces in macro environment like economic influences, ecological influences, physical environment influences, cultural influences, technological influences, demographic influences etc.
Industrial buyers and sellers operate in a
dynamic environment , one constantly posing new opportunities and threats
How well buyers and sellers understand the environment within which they operate, and how well they communicate with one another, foretells their capabilities of profiting from or being damaged by the environment’s many surprises and shocks
The effectiveness of the buyer – seller interface hinges on monitoring and adapting to or developing strategies to affect environmental changes that directly impact either or both organization
The traditional view of marketing has been one of achieving organizational goals through satisfying the needs of identified markets by adapting the organization to deliver the desired satisfaction “ more effectively and efficiently than competitors “
Marketing strategies have been” viewed as a set of adaptive responses “ i.e. marketing strategies appear to begin with a system of environmental constraints Marketers gather and analyze information on forces in the environment ( e.g. Competitors, politics, and economics ) and implement strategies to adapt to environmental demands
Adaptation strategies are not sufficient in today’s turbulent environment Marketers must adopt a proactive orientation so that marketing strategy can be developed not only to adapt to but to change or affect , when possible, the environment in which the firm operates
Government
Macro environment
Publics
Buyer- seller interface
?
Due to several interfaces that exist between firms that interact directly with one another, we refer to the first level as the interface
level
?
?
The next two levels we refer to as the publics and the macro environment All three discernible levels of a firm’s environment exist within the purview of final environmental entity, government
?
The interface level involves those key participants who immediately interface with an industrial firm (buyer or seller) in facilitating production, distribution, and purchase a firm’s goods and services.
Supply inputs are transformed by a company and its competitors into outputs with added value that move on to end markets, the move being made through the firm’s interface with industrial distributors and dealers, manufacturer’s representatives , and company’s own sales force That move is possible by a firm’s interface with facilitating institutions such as banking , transportation, research and advertising firms
SUPPLIERS
MARKET SEGMENTS
BUYERS
FACILITATORS
?
SUPPLIERS
? ? ? ? ? Labor Capital Raw material Component parts Equipment
?
BUYERS
? Company manufacturers ? Distributors / dealers ? Competitors
?
FACILITATORS
? ? ? ? ? ? ? Manufacturer’s representatives Distributors / dealers Transportation firms Warehouse firms Advertising agencies Marketing research firms Banks and insurance companies
?
MARKET SEGMENTS
? Government ? Commercial enterprises ( User, OEM, Industrial distributor ) ? Institutions
?
? ?
?
Industrial firms are part of a chain of organization Each firm is both buyer and supplier As buyers, firms form less populated markets than in the consumer area Their buying decisions are more technical, logical, and expert
?
?
They recognize that what they buy and how they buy can affect the cost and efficiency of their manufacturing process or alter the quality & performance of the outputs products that are sold to firms farther along the industrial chain To deal with such interdependencies , industrial firms form long – term , buyerseller interfaces
?
?
Individuals in various functional areas, e.g. research, engineering and production , meet their counterparts in other firms to exchange information on technological developments and processing innovation They will be expecting more assistance in the areas of technical innovation , manufacturing , and other cost- cutting areas from their suppliers
?
?
?
The sphere of activity of the various participants in the interface level of the industrial marketing environment is greatly influenced by the multiple publics Publics are distinct groups that have an actual or potential interest or impact on each firm’s ability to achieve its respective goals Publics have the ability to help or hinder a firm’s effort to serve its markets
Financial publics
Independent press
Public interest groups
General publics
Internal publics
?
Financial institutions influence the ability to
obtain funds
?
Favorable or unfavorable press affects
?
?
marketing activities Interest groups demand social responsibility and Attitudes of the employees and the general public toward a firm’s activities and products affect a firm’s ability to do business
Since the ultimate function of business is to serve society, publics are a composition of tangible interest groups that 1. Indicate how well that service is being performed 2. Actively work to assure that society is in fact being served and 3. Act as a societal sounding board upon which business can make its case heard
?
?
The dynamic forces of the macro environment have a major impact on both the publics and interface levels of the industrial environment
ECONOMICS
ECOLOGY
PHYSICAL ENVIRONMENT
CULTURE
TECHNOLOGY
?
?
Because of derived nature of industrial demand, changes in economic variables that affect consumers’ discretionary purchasing power have an impact on the industrial producer When consumers tighten their belts and wait for better economic times, demand for raw materials , component parts , and associated services also tighten
?
?
?
All around the globe, industrial organizations face public reaction and government intervention when industrial activities pose potential danger to the earth’s resources Government officials are becoming more concerned with environmental damage to the earth’s water, land, air and people e.g. Chemical & pesticides, disposal of waste materials , RTI Act
?
?
The ability to produce and market goods and services at a profit necessitates a favorable combination of inputs needed Certain advantages stem from the natural endowments of environment, such as raw material, water and power, or
?
?
The favorable combination of production inputs, such as adequately skilled management, low – cost labor , and transportation facilitates Industrial suppliers who are able to work out low-cost combination of these factors of production often have a differential advantage over their competitors
?
?
Location and transportation considerations , particularly when procurement requirements necessitate a close buyer – seller relationship, are often of paramount consideration in the supplier- sourcing decisions As transportation costs increase, buyers prefer suppliers whose mining, manufacturing or storage facilities are nearby
?
?
Culture mores, customs, habits , norms and traditions greatly influence the structure and function of an organization as well as the inter personal relationships of organizational members Cultural differences have little impact on the product specifications of industrial products, but there is a growing trend toward joint venturing with foreign partners to take advantage of production techniques that are the products of other cultures
?
?
?
Technological developments and changes in the industrial market strongly affect both buyers and sellers Buyers are worried whether their profitability and market acceptance will be favorably impacted by changes in suppliers’ product design or manufacturing process Suppliers are equally concerned whether their customers will perform well enough in the downstream markets to maintain or increase their share of derived demand
?
?
Industrial firms can not ignore the demographic environment because of the derived nature of industrial demand World population explosion and the changing population structure of the world provide both opportunities and threats
?
?
Government, charged with administering and controlling nations and their sub divisions, transcends the industrial marketing environment As world competition increases, industrial marketer is constrained to give greater attention to the actions of the governments around the world , as well as within the country
?
?
In performing its multi- faceted functions, government enables and facilitates , but also hampers and disallows , industrial actions In the interface environment , government laws, regulations , and activities affect all participants
Primary functions of Government are to
1. Protect
companies from each other 2. Protect consumers from unfair business practices 3. Protect the larger interests of society against unrestrained business behavior 4. Ameliorate income inequality in society 5. Provide economic stabilization through control of unemployment and inflation
These functions include
1. 2.
3.
4. 5. 6. 7. 8.
Regulating agencies Laws/ politics Program funding Research funding Import/ export regulation Levying taxes Providing social programs Controlling interest rates
Government’s diversified actions include :? Providing input monies by funding programs ? Effecting changes in interest rates and taxes ? Specifying product safety standards ? Sponsoring research & development ? Issuing regulations that protect the environment ? Facilitating actions that are believed to be in accordance with the desires of society that it regulates
?
?
Government may become attentive to public opinion aroused by the independent press. That opinion may involve some ecological problem that can only be replaced by banning a particular pesticide – a pesticide that must eventually be replaced by another that will ultimately be developed through new and different technology.
?
?
Government , in its omnipotence , does sometimes yield to advocacy in the face of logic, to public opinion despite heavy investment , and to the free press regardless of a firm’s best intentions Governmental regulations and laws often favor whichever environmental entity has the most influence in New Delhi, the state capital or the city hall
?
An industrial firm’s own best interests are particularly furthered if and when that firm anticipates government regulation by changing before being mandated to do so ( example Tariff drop in Text Messaging by Reliance, Adopting to Euro IV emission norms by TATA Motors )
?
?
Industrial marketers have frequently reaped considerable benefit by anticipating , planning , and assisting government with some new research project or product development. E.g. new metal alloys and fabrics developed by NASA space projects has spawned entire product lines aimed at industrial and consumer applications with similar temperature , weight, or volume requirements
?
?
?
As government transcends all levels of the industrial environment, it is capable of influencing and being influenced by environmental elements at all levels Each element of the public and macro environment level influences government ( intentionally or unintentionally ) Example :-
?
?
Public interest groups fight intentionally to save wilderness area , while the demographic consideration of a growing segment of older citizens influences governmental actions unintentionally when planned social security increases the are side tracked. Setting of SEZs, National Rural Employment Guarantee Scheme( NREGS) , development of vaccine for H1N1 etc are some of the latest examples
?
The political environment includes international trade restrictions , government attitudes toward business and social activities, and government funding of selected programs
?
Protection against foreign imports is brought about through government pressure on foreign nations to restrict exports “ voluntarily “ through quota restrictions, through the use of tariffs, or through imposition of artificial barriers , such cumbersome rules and regulations
?
?
? ?
?
Buyers and sellers in the industrial market are firmly regulated by governmental agencies, i.e. agencies that are charged with the responsibility of protecting business from each other Protecting consumers from businesses Protecting the larger interests of society from unrestrained business behavior E.g. FDA, MRTP, PCB etc.
?
?
Both buyers and sellers must keep careful watch on pending regulation to ensure that their respective business plans will meet with government approval Industrial organizations respond to government agencies and legislators by seeking legal advice from internal or external legal staffs as to what they can and can not do
Independent strategies
Competitive aggression
•Product differentiation •Aggressive pricing •Comparative advertising
doc_696761257.pptx