Industrial Marketing

Question 1

Define industrial marketing

Answer 1

Offering the right product at the
right price at the right place and at the time to sell profitably to business customers. B to B. Selling goods and services that are not directly aimed at consumers. It may sell finished goods, raw materials, components or services.

Question 2

Methods adopted when selling to industrial customers

Answer 2

• Will require a finely targeted approach – homing in on the few people in any organisation whose responsibility it is to purchase goods and services from outside.
• Industrial marketing is more focussed and does not aim at mass markets.
• Trade fairs and exhibitions may be used to establish contacts and display goods.
• May involve highly specialised sales personnel – one to one relationship with purchasing manager/buyer likely to be
  more important. Price negotiation.
• Trade magazines and journals may be used to advertise the goods or services.

Question 3

Opportunities when marketing globally

Answer 3

☑ a much larger potential market – important as the UK market seems to be saturated
☑ an opportunity to earn greater profits and thereby grow the business
☑ spreads the risk – being in a number of different markets can safeguard against economic downturns
☑ may enhance the business’ reputation – investors may be attracted towards the business
☑ economies of scale – marketing
economies.

Question 4

Difficulties when marketing globally

Answer 4

☒ selling abroad can be more risky than the domestic market
☒ need to be aware of government
stances and policies so that marketing is appropriate
☒ cultural differences – language, religion, attitude towards advertising, etc.
☒ products may need to be adapted to suit the requirements in different countries – this could cause margins to be squeezed
☒ economic factors such as the general level of income will need to be taken into account so that marketing can be targeted effectively
☒ differences in business practice
☒ understanding the degree of competition that already exists in the markets being considered – the use of reliable agents who
have an understanding of specific markets
☒ exchange rate difficulties.

Question 5

Define marketing budget

Answer 5

It sets out targets for the marketing department. For example: how much money is available to be spent, targets for sales, targets for market share etc

Question 6

Purpose of a marketing budget

Answer 6

It is a planning and control tool. It ensures that spending is kept under constant review.

Question 7

Benefits of a marketing budget

Answer 7

☑ it helps to control marketing costs
☑ it can help to identify where costs have been too high
☑ it identifies situations where marketing expenditure has been ineffective
☑ it helps to plan the future of the business
☑ it helps to co-ordinate strategies with other departments
☑ it sets targets which may help to motivate employees

Question 8

Problems of a marketing budget

Answer 8

☒ they may be too rigid and not be responsive to changes in market conditions
☒ if too ambitious they may demotivate employees
☒ they may be inaccurate and lead to poor decision making
☒ they might conflict with other objectives of the business
☒ resources might be redirected from other departments
☒ time and expense of setting the budget