industrial marketing assgn. 1 content

8/4/2019 Industrial Marketing Assgn. 1 Content

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Industrial Marketing

P5709

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QUESTION

Instructions:

1. By taking examples of companies in your environment, you are required to distinguishbetween MARKETING CONSUMER AND MARKETING INDUSTRY. Your opinion

should be with the right example. (10m)

2. What do you understand in the procurement strategy? Explain. (10m)


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INTRODUCTION

Industrial marketing and Consumer marketing is two different types of market that exist.

Market can be analyzed for the product itself, or end-customer, or both. The most common

distinction is between the consumer and industrial markets. Industrial marketing is one of the

important targets for each company that wants to success in business. Industrial marketing is

defined as a marketing of goods or services to industrial and institutions. It is also known as

business to business or business marketing. Industrial marketing include selling finished goods,

selling raw materials or components, or selling services to business. While, consumer marketing

are the markets for products and services bought by individuals for their own or family use.

Good that is bought in consumer market can be categorized in several ways such as buying the

convenience goods, shopping goods, special goods and goods that are not in search.

In this assessment, example of the company that was run in industrial marketing and

consumer marketing is completely different, in many ways. One of the companies that were in

industrial marketing is Alliance Rubber Products Sdn Bhd While the company that was inside

the consumer marketing is COSWAY. Alliance Rubber Products Sdn Bhd is one of the

companies in Malaysia that is produce high quality of rubber gloves while COSWAY is a

company below Berjaya Cooperation Berhad and produced several product and directly soled to

customer in their own retail.


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DISTIGUISH BETWEEN INDUSTRIAL MARKETING AND

CONSUMER MARKETING

1. ProductProduct is the main asset that was produce by a company in the market. The characteristic of

product are very important for the marketers especially in competing with each other and

showing the types of their company. The differences between industrial marketing also shown in

a product they produced. Product can be categorized in several types depend on what type of the

company is whether they product it as convenience goods, shopping goods or others. Product

that produced by two types of marketing that is industrial and consumer is different.


Industrial product is more complex and requires technical skills. The size of the product is larger

because it is used in the factory or company, However the function that are used are only by

certain people and have a higher prices in purchasing a larger quantities. Alliance Rubber Sdn

Bhd product is complex and requires technical skill especially in choosing the right type rubber

to produce quality gloves.

Alliance Rubber Sdn Bhd purchases the main raw materials that are sap from suppliers in large

quantity to make large amount of product inside their factory. The product their produced only

focused to one type of product that is rubber gloves. Rubber gloves only used for certain

purposes such as in medical, manufacturing and others.

Consumer Marketing

Consumer product is more accessible and small size as it is for personal individual use. The

purchasing price is low because it is purchases in small quantities. COSWAY produced they


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own product and sell it in their own retail or shop. The product easy to purchase by the customer

because COSWAY can be found anywhere. The amount of purchases of consumer usually in

small quantities based on their desired and needs and this is give the consumer low price for

purchasing the product.

2. Purchasing DecisionsPurchasing decisions is making a move with a specific condition or rules. Decision making will

be influenced by the condition required, environment and others. Purchasing decision need to be

wise to make sure the purchasing is valuable. Purchasing decisions between industrial and

consumer marketing is making by different categories of people.


Purchasing decisions for industrial marketing is more complex and it is involved high costs,

necessary follow the specific procedures and involved many parties. Usually, industrial

marketing company has their own decisions making unit that are consist of group of individuals

and it takes a long time for taking the matter of cost and so on. To get the price discount,

negotiations are needed.

Purchasing decisions that were made by Alliance Rubber Sdn Bhd is completely in purchasing

their raw materials to make their product. The ingredients need to complete the product such as

chemical substances, sap, and so on. The decisions for making the purchase is depend on

following the specific procedures. For the example, they want to buy a sap for the product. This

required some aspects such as the quality of the sap, the grade, type of sap and the price given by

suppliers. The decisions is making by group of individuals in special unit or department of

Alliance Rubber Sdn Bhd that is responsible in making the purchasing decisions.

Consumer Marketing

Purchases decisions made by the user of the product. The process is easier and faster with the

power, the need and demand from customer. It is different between the industrial marketing

because it is involved the customer itself other that industrial marketing that involved the whole

operation of the company. COSWAY sells his product directly to their customer and the

purchases decisions are by their own power. For the example, Aziza as the customer wants to


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buy body lotion for herself, so she does have to take a long time purchase decisions because she

do not have to take the matter of cost, quality and so on. The purchase power is on the customer

itself.

3. Marketing CommunicationMarketing communication is the way of marketers promotes their company in the market and

how to represent their product or services to the market. Marketing communication usually

depend how or what the services or product is. Industrial marketing and consumer marketing

using different a type of marketing communication.


Industrial marketing focused on personal sales for industrial products due to is complexity,

difficult to apply as it needs to have sales people to describe on how to use it. Advertising is also

used, but only through particular print media such as industrial magazines, business journals and

others. Alliance Rubber Sdn Bhd product does not have difficulty in using their product, so their

just using particular print media such as industrial magazines or business journal. Other example

of Industry Company is Bosch. Bosch Company product is hard to use such as angle grinder,

polisher, cutting grinder and so on. This product needs personal sales to show the buyer how to

use it.

Consumer Marketing

Consumer marketing communication is more on advertising and promotion activities and

personal is rarely used because it involves high cost. Advertising and promotions is very

important to represent their product and to get higher amount of sales. COSWAY using a

Bosh Product that needs personal sales to explain how to use it

an as marketing communication


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promotion strategy to communicate their marketing. There are several ways of doing the

promotion such as brochures, coupon, special member cards and other.

4.

Financial or Economic Factors

Financial or economic factors are one of the macro environments that cannot control by the

marketers. The type and the size of the market are influenced by the changing of the economic

such as inflation.


Industrial marketing are easily influenced by the economic factors. Any changes in economic

factors, will give a large effect to the industrial product such as the changing of prices caused byinflation. If there is economic problem for the example, the price of sap in the market is increase,

the price for Alliance Rubber Sdn Bhd product also directly increases. This is caused by the price

of the raw material that is sap for their production, is hardly increasing.

Consumer Marketing

Consumer marketing is less affected by the economic factors. If the economic recession,

consumers will still purchase the product as long as it is the needs of consumer. For the example,

COSWAY product has increase because on the economic factors. The customer will still make a

purchase because the product is their needs and they demand for it.

Promotion by COSWAY as their marketing communication


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5. Market size

Market size is depending on how the size of company is. The market size is different for every

company in the market. Usually, the bigger size of the, shows the higher power they had in the

market and they can be a market leader.


Industrial organizations are composed of several companies, organizations, large institutions,

who are usually focused on one geographic area. The size of the market is smaller but it has high

purchasing power that made in bulk and the amount of purchased is measured by the total

expenditures and total sales of the company. Alliance Rubber Product Sdn Bhd will buy the raw

material in large amount based on their sales and expenditures. Because of the size of the

company, the purchasing power is high.

Consumer Marketing

The market size of private users is enormous. Private user is individuals who make purchase for

personal used. The amount of buyer in COSWAY shop is all made by individuals that used the

product they buy for personal. This is involved in not just one person but involved in many and

uncounted costumers that are searching the product their need.


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PROCUREMENT STRATEGY

Procurement strategy is the company purchases the industrial products to meet the demands and

requirement of users. It is to maintain the movement of goods and services in the company. If

there is no turnover, the movement of goods would be affected.

The objectives of procurement are:

1. Availability factors Industrial goods to ensure that goods are always available. To provide continuous operations by ensuring that goods and services purchases

are available at the time it is needed.

Example: Machine for production. Choose suppliers or vendors in order to ensure the availability factor.

2. Product Quality Need to ensure that the goods have industrial quality at early stages, if the goods

have no quality, it will affect the final product.

The organization itself that determined the quality desired. Example: The contractors know about the quality of sand and bricks/

3. Price It must be consistent with the quality of products supplied. Important because it will give effect to the pricing of the final product. Example: To produce quality chocolate products, cocoa powder quality must be in

good quality.

4. Services Most industrial products have provided after-sales services which are complex

because of industrial goods.

Example: Mill bread machine requires maintenance and cleanliness. The company may pay a higher price if there is a good service provided. Price of industrial products are often include physical products and services to be

received.


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5. Long term relationship Important for suppliers and customers as they have good long-term relationship to

ensure smooth availability factors.

Ro be able to get a reasonable price It can ensure that companies receive quality services from a company.

There are three steps in procurement strategy that is:

6. Determine the scope of procurement, especially what will be purchased.The scope should specify what to purchase. The purchase that was going to be made should be

affective and how the purchase can solve the problems by making the purchases. The purchased

will need recognition. Business purchasing also need recognition by recognized a need of the

business.

For the example, the company wants to specify what to be purchase, either to purchase a new

machine or spare parts to fix old machines. The problem is that the company has a problem

involved in production system. The need here is either to buy new machine or repair the

machine. What to be purchased will be give influences to future matter of the production system.

Marketers usually create buying center that are the first organizational members to recognize a

need. Much of this has to do with an organizations motive to reduce costs. The professional

buyers, which are the business, will make their mark on certain product.

7. Form the specifications of item or services in detail.The business will specify the products features to be purchased and make sure that the

specification due to avoid over-budget. Specifications document will be generated that lays out

the requirement of the product or services to be purchased. The primary intention of this

specification is to identity which product meets the specification and then through the screening

process, offers advantages of the item. Each item may evaluate the option using a checklist of

item and benefits sought by the buyer.


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The specification made also depend on what type of item should be purchased. For the example,

when the purchasing involved machine, the specification such as engine power, the maximum

desired levels of production, raw materials such as rubber from high or low grade must be

considered.

8. Determine the role of strategic that should be playing by the vendor.Industrial user will specify the duties and responsibilities that must be done by the vendor or

suppliers. Industrial user will choose the vendor through a competitive process. Working with

the vendors should come to agreement that will mutually benefit to both parties. The function of

vendors is provides necessary information at the right time that will allow a vendor to better

services the business needs. This is include limited forecast information, new product launches,

changes in design and environment and other.

The vendors have their own function that should be considered as important to be done correctly

that is transportation, warehousing includes unloading, storing, sales after services and others. If

the vendors are unable to do what is preferred by the company, the company should look for

another vendor who is able to fulfill the requirement of the company.


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CONCLUSION

Industrial marketing and consumer marketing is two type of market that is completely

different internal and external. Industry marketing is due to producing industrial goods and used

by other business or institutional. Consumer marketing produces their product directly to the

customer and focused to the customer or individual buyer environment. However, it is important

to both marketer to plan a marketing strategy to make sure there is no problems in facing the

market situation such as competitive, price inflation, customers unsatisfied with the goods and

others.

Procurement strategy is very important to companies to meet their demand of the product and

requirement of users. There are factors should be considered important which is vendor or

supplier selection, The product factors, price and services received by other parties, and the

relationship management between the organizational.


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ATTACHMENT

Industrial product of Alliance Rubber Product Sdn Bhd.

Consumer Products of COSWAY with different categories that

such as Household, Foods and Car Care.


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REFERENCES

Notes Chapter 1 P5709, Industrial Marketing http://www.alliancerubberproduct.com/ http://cosway.com/ http://www.google.com/image

industrial marketing assgn. 1 content

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