As we have often discussed during this course, marketing can be defined as the process of knowing customers needs/wants/problems, developing/providing innovative solutions and then communicating this to the target market in order to stimulate a purchase on which a profit can be made. Industrial marketing is the marketing of goods/services that are used in the process, either directly (such as raw materials, components, equipment, etc.) or indirectly (such as fuel, office supplies, computers, etc.). Thus industrial marketing plays a vital role in the economy and is estimated to be at least 2x the dollar volume of consumer purchases. There are three major categories of customers in the industrial market. They are:.
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Industrial manufacturing & Processing Firms which also includes distributors who buy and resell to other firms.
Institutional/Commercial including health care, restaurants, educational institutions, hotels/resorts and other service providers.
Government Agencies includes all levels from local municipalities, county, state and national organizations. It should be no surprise that the Federal Government of the USA is the single largest purchaser of goods/services in the World.
Each of these major market segments buys products/services for their process of providing their own products/services. A Company may market the same product/service to all three segments, although it may well be priced and packaged differently. This is caused by the variances in purchasing methods and the channels of distribution required to serve the differing segments. For example, when I was working for a large chemical company who sold products to treat heating & cooling water systems, we actually developed completely different sales organizations, with different packages of the same products for the three segments. The industrial segment tended to be large complex operations that required highly trained technical salespeople who could communicate and work closely with the customer's technical people.
