Industrial Marketing Environment
Industrial buyers and sellers operate in a dynamic
environment. One constantly poises new opportunities and threats. The industrial marketing environment could be divided into four levels namely
- Buyer Seller Interface
- Publics
- Macroenvironment
- Government
The Interface Level
This involves those key participants who immediately
interface with an industrial firm (buyer or seller) in facilitating production,
distribution and purchase of firm’s goods and services. Supply inputs are
transformed by a company and its competitors into outputs with added value that
move on to the end markets, the move being made through the firms interface
with industrial distributors and dealers, manufacturers representatives and the
company’s own sales people. That move is made possible by a firms interface
with facilitating institutions such as banking, transportation, research and
advertising firms.
Participants in the interface level include:
§
Input supplier– Input goods such as the raw materials, labor and capital are
supplied by organizations to industrial firms for use in producing output goods
and services. The survival and success of a firm depend on the knowledge and
relationship with its input suppliers. Interruptions in the flow of inputs
cause repercussions in the entire industry affecting not only production and
marketing plans but also the production and marketing plans of the suppliers.
§
Distributors– Most organizational buyers buy from five or more industrial distributors.
Industrial distributors, contact potential buyers, negotiate orders, provide
buffer inventories, credit and technical advice to potential buyers. They are
particularly important when joint demand is present because they bring together
the heterogeneous inputs needed for the production of end products .
§
Facilitators– Advertising agencies and public relations firms provide the necessary
communication flow between the sellers and buyers through the formulation of
meaningful information and media strategies. The use of advertising in reaching
potential buyers and the multitude of buying influencers is vital in the
overall communication strategy. Transportation and warehouse companies
facilitate the free flow of goods that must be delivered in usable condition to
industrial customers and distributors when and where they are required. When
goods are not delivered on time and in usable solutions, buyers can be forced
to shut down production lines. Resources as they move from the supply inputs to
end users must be financed and insured.
§
Competitors– Competitors actions whether domestic or foreign, ultimately influence the
company’s choice of target markets, distributors, product mix, and in fact its
entire marketing strategy.
The Publics Level
Publics are distinct groups that have actual or potential
interest or impact in each firm’s ability to achieve its respective goals.
Publics have the ability to help or hinder a firms effort to serve is markets.
§
Financial publics– Financial institutions such as investments firms and stock brokerage
firms and individual stakeholders invest in an organization on its ability to return profits. When they become unhappy with the management or dissatisfied with a company’s social polices, they sell their shares.
§
Independent press – Industrial organizations must be
accurately sensitive to the role that the mass media play and how they can
affect the achievement of the marketing objectives. The independent press is
capable of publishing news that can boost or destroy the reputation of a firm
as well as the sales potential of a product.
§
Public interest
groups– Industrial marketing decisions are increasingly
affected by public interest groups. Clearly, these various public interest
groups limit the freedom of the suppliers and buyers in the industrial market.
While some organizations respond by fighting, others accept these groups as
another variable to be considered in developing strategic planning, working through public affairs
departments to determine their interests and to express favorably the company’s goals and activities in
the press. The impact of these groups however is felt by all participants in
the interface level.
§
General public— Although the general public does not react in an organized way towards a
firm or an industry, as interest groups do, when sizeable portion of a
population shifts attitude towards a firm or industry, there is definite
impact.
§
Internal public– The board of directors and managers as well as blue and white colour
workers are important emissaries between an organization and other participants
in the interface and public levels. Corporate policy must give consideration to
employees and others who are held responsible for the overall operation of the
firm. Employee morale is an important factor in all business decisions. And
when morale is low, organizational efforts suffer. A firms employees spend more
than two thirds of their time off the job, interacting with their families and
the community, so employees attitudes do influence the public.
Macro Environment
This level of the organization is made up of components
that have less specific and less immediate implications for managing the
organization effectively.
1. Economic
component
Economic conditions greatly influence an organizations
ability and willingness to buy and sell. Thus emerging changes in the economic
environment both at home and abroad, must be closely monitored. It
includes the following factors;
§
GNP
§
Inflation rates
§
Balance of payment
position
§
Debts and spending
§
Taxation rates
§
Interest rates
§
Consumer’s income
§
Corporate profits
2. Social
component
This describes the characteristics of the society where
an organization exists. It includes factors such as;
§
Literacy levels
§
Values of people
§
Educational levels
§
Geographical distribution
§
Customs and believes
3. Legal component
This consists of legislation’s that have been
passed. It describes the rules or the laws that all the company members
must follow. They include all laws affecting the organization e.g.
§
Consumer health policy
§
Energy policies and conservation Acts
§
Employment Acts, etc.
4. Political
component
Comprise those elements related to the government
affairs. This includes;
§
Type of government
§
Government attributes towards certain issues
§
Lobbying efforts from interest groups
§
Progress towards passing of laws affecting certain
industries, etc.
5. Technological
component
Given the rate of technological change in industries such
as telecommunications, computers, and semi conductors, large buying firms are
developing forecasting techniques to enable them to estimate time periods in
which major technology developments might occur. Marketers must also monitor
technological change if they hope to adapt marketing strategy with sufficient
speed and accuracy to make the more scientific breakthroughs. This
includes;
§
New procedures
§
Approaches to new plan of goods and services
§
Addresses the issues of new equipments and new ways of
improving production through the use of computers /robots.
6. Demographic
component
Industrial firms cannot ignore the demographic
environments because of the derived nature of industrial demand. World
population explosion and changing population structure of the world has a major
impact on industrial demand.
Government
Every year
government makes changes in its financial year policies or in five year plans.
They provide subsidies to some sectors which are going down and increase taxes
and duties to some sectors. Time to time government policies are changed for companies.
It force industrial market to changes according to the government norms.
Post a Comment