Comparing Consumer to Industrial Marketing. Page 5 / 5 |
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6. Viable selling / communication / research techniques widely applied in
each sector? | Industry | Consumer | Mass
Advertising. | Normally
focussed on technical media. Not normally TV. | Often suitable and used including TV, Radio and mass
circulation print advertising. | Direct Mail. | Often very suitable due to small
numbers | Sometimes not
viable due to high numbers & low value. | Face to face selling by specialists. | Often very suitable for company
specialists | Rarely suitable
for individual items to end users, except in retailing by retailers own staff.
(note B2B element of B2C companies selling via retailers) | Hospitality | Very suitable because of often high business value
per decision maker | Not
often used for end consumers, used however as in industry where retail decision
makers are concerned (the B2B aspect being similar to
industry). | Editorial. | Very suitable in targetted print media. | Sometimes suitable.
| Publicity. | Suitable | Suitable | Loyalty
schemes. | Rarely
suitable because split between buyer (individual) and payer (company) creates
eithical problems. | Often
suitable, decision maker and person making payment are often the same person.
Loyalty schemes often act like simple loyalty discount. | Discounting. | Often to reward volume customers. | Discount sales are often used for
sales promotion. | Specialist exhibitions and or
trade shows. | Often used
for high and lower value items. | Mainly suitable for higher value items unless selling consumer
wares to retail buyers. | Opinion polling. | Sometimes but total market population is invariably much
smaller. | Often used because
of difficulty of addressing whole population high levels of statistical
analysis are required from representative samples of the
population. | Focus
groups. | Not needed, can
address the whole population. | Often used to infer views and preferences of a population.
| Pilot schemes. | Rarer than in consumer markets
because of smaller market size. | Often used for example test areas for new product
trials. | Point of sale displays and
communications. | Not often
used except where distribution involves trade counters and on some small qty
packaging. | Extensive
use. | Summary: Consumer marketing is characterised by greater use of mass
communication and research techniques than industrial marketing because it is
harder (due to the numbers of consumers) for companies to be close to actual
market participants. |
7. Viable routes to market in each sector? | Industry | Consumer | Direct sales force | Often used in industry to sell direct to buyers and specifying
engineers. | Used where
needed to sell to resellers more than to actual consumers. | Wholesalers | Sometimes used. | Often used in chain before
retailers especially in export markets. | Distributors | Often used. | Sometimes used. | Catalogues | Form part of distribution chains. | Form part of distribution
chains. | Commissioned Agents | Often used. | Sometimes used. | E-Commerce via Internet | Becoming more prevalent to cut out
the middle man and reduce stocks. | Becoming more prevalent at retailers, less so for manufacturers
because of their narrow ranges. | Multi-level marketing including party plan. | Rarely used. | Used for some
specialities. | Summary: There are fewer differences on first view in the routes to
market between industrial and consumer goods, but the variety of items falling
into each of these large categories does not help differences to show through
on this aspect. |
8. Summary and conclusion.
The key difference between industrial and consumer markets is the much
greater number of buyers in consumer or end markets.
This means consumer marketers are by necessity more involved in polling type
research to infer information about the population of consumers.
They are also more involved in mass communication such as print, television
and radio advertising than their industrial counterparts.
I have suggested that physical utility, rationality and deep buyer knowledge
is more prevalent in industrial buying decisions.
This is in part because the consumer situation features informal purchasing
procedures and no formal buying groups. There are usually fewer individuals
involved in consumer decisions.
I argued that there are often lower switching costs for consumers which
allows creative sales and promotions to persuade individual consumers to
switch.
This means mass communication in consumer markets can have less focus on
utility than would be needed in industry.
I think a study would bear this out, visible consumer promotion is usually
much less about technical performance, price and relationship and more about
peer acceptance, fashion, trend or approval issues.
In industry personal relationship building must be used alongside utility
and cost advantage (to overcome switching costs).
As there is a much smaller group of possible buyers in industry marketing
and selling can often be carried out face to face by individuals doing both
marketing and selling tasks.
This creates an interesting argumnent which is that in industry there may be
no difference between marketing and selling.
In consumer markets it could be argued that there remains a big distinction
between marketing: research, creative idea production (dreaming up these
advertising promotional angles which I hope do fit some demographic and target
style identifiers), packaging, point of sale, loyalty schemes etc, and retail
sales staff who book shelf space or man counters and
checkouts.
The key difference between industrial and consumer marketing may be
therefore the reduced face to face interaction between organisations and
customers in consumer markets with greater use of mass or delegated
communications, compared to increased face to face communications in industry
with greater blurring between marketing and selling.
Comments are welcomed, please use the email address below.
Author Mark Abraham (mark@sticky-marketing.net) 30th
November 2001
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