th
Philip R. Cateora, Mary C. Gilly, and John L. Graham

• Issues of standardization versus adaptation
– Less relevance to marketing industrial goods than consumer goods
• Factors accounting for greater market similarities in customers of industrial goods versus consumer goods
– The inherent nature of the product (industrial products and services are used in the process of creating other goods and services)
– The motive or intent for the user differs (industrial consumers are seeking profit, whereas the ultimate consumer is seeking satisfaction)
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Exhibit 14.1
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• Three factors affect the demand in industrial markets differently than in consumer markets.
They are:
– Volatility of industrial demand (demand in industrial markets is by nature more volatile)
– Stages of economic development (stages of industrial and economic development affect demand for industrial products)
– Technology and market demand (the level of technology of products and services make their sales more appropriate for some countries than others)
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• Cyclical swings in demand
– Professional buyers tend to act in concert
– Derived demand accelerates changes in markets
• Derived demand can be defined as demand dependent on another source
• Minor changes in consumer demand mean major changes in related industrial demand
– Boeing
• Worldwide demand for travel services related to demand for new airplanes
• Commercial aircraft industry one of the most volatile
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• Perception of quality rests solely with the customer
– Level of technology reflected in the product
– Compliance with standards that reflect customer needs
– Support services and follow-through
– Price relative to competitive products
• Quality standards vary with level of country’s industrialization
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• Positively affects the performance and stock prices of firms
• Certification of the existence of a quality control system a company has in place to ensure it can meet published quality standards
– Describes three quality system models
– Defines quality concepts
– Gives guidelines for using international standards in quality systems
• Generally voluntary
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• EU Product Liability Directive
• Now a competitive marketing tool in Europe and around the world
• The ACSI approach
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• For many industrial products the revenues from associates services exceed the revenues from the products
– Cellular phones
– Printers
• Leasing capital equipment
• Services not associated with products
– Boeing at-sea-satellite-launch services
– Ukrainian cargo company space rental on giant jets
– Professional services (advertising, banking, healthcare, etc.)
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• Installation
• Training
• Spare and replacement parts
– Delivery time
– Cost of parts
• Service personnel
• Almost always more profitable than the actual sale of the machinery or product
• Crucial in building strong customer loyalty
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• Client followers
• Mode of entry
– Licensing
– Franchising
– Direct investment
• Protectionism
• Restrictions on cross-border data flows
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Trade Shows: A Crucial Part of Businessto-Business Marketing
(1 of 4)
• Secondary methods for marketing:
– Advertising in print media
– Catalogs
– Web sites
– Direct mail
• Trade shows have become the primary and most important vehicle for doing business in many foreign countries
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Trade Shows: A Crucial Part of Businessto-Business Marketing
(2 of 4)
• Total annual media budget spent on trade events:
– Europeans – 22 percent
– Americans – 5 percent
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Trade Shows: A Crucial Part of Businessto-Business Marketing
(3 of 4)
• Trade shows
– Provide the facilities for a manufacturer to exhibit and demonstrate products to potential users
– Allow manufacturers to view competitors products
– Are an opportunity to create sales and establish relationships with agents, distributors, franchisees, and suppliers
• Online trade shows
– Become useful in difficult economic and/or political circumstances
– Are obviously a less than adequate substitute for live trade shows
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Trade Shows: A Crucial Part of Businessto-Business Marketing
(4 of 4)
• Not a matter of selling the right product the first time instead selling a continuously changed the product to keep it right over time
• The objective of relationship marketing
– To make the relationship an important attribute of the transaction
• Differentiating oneself from competitors
• Using the Internet to facilitate relationship building and maintenance
– Cisco Systems
– Solar Turbines Inc.
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