Industrial marketing is the marketing of goods and services to industrial and institutional customers. It is now renamed as Business to Business (B2B) marketing as it is a marketing of goods and services by one business to another business. Due to the new communication and interaction capabilities in the current era, everything around marketing has changed in many industries. By keeping the basic marketing mix unchanged, Peattie suggested new roles for the 4P’s such as Product, Price, Place, and Promotion of the marketing mix. (Peattie (1997)). This essay will give a brief explanation about how we can preserve the basic 4P’s of marketing mix by giving new roles to it in industrial marketing.
Marketing to an industrial consumer is considerably different from marketing to consumers (Herbig, Milewicz, & Gulbro, 1994). In contrast to consumer marketing, the 4Ps are different in industrial marketing. In terms of product, it may be a raw product, semi-finished product, chemicals or something that satisfies the production process or operations of a firm. The products are usually technically complex and valued for the purpose they solve for the buyer. Regarding Pricing, Competitive bidding (open, closed, and informal) is the most common way of trading in business markets. The industrial sellers can earn a competitive edge in pricing by utilizing economies of scale and economies of scope. Marketers have to choose the right mix of communication tools to achieve the goal for promotion. Sellers will have to adopt the sales promotion techniques to understand the prospects of the offering. Although there are promotional schemes, relationship building is vital for promotion in B2B marketing. Place explains where and how the product is sold. The supply chains are short in B2B marketing, and buyers are geographically concentrated.
Although basic 4Ps are good enough for marketing strategies, it lacks a few aspects of industrial marketing due to the advancements in technologies and communication. B2B marketers were impacted by the following three issues according to the study released in Harvard Business Review by Richard Ettenson, Eduardo Conrado and Jonathan Knowles (2013) on Rethinking of 4Ps. Cost of entry is the only differentiating factor, although 4Ps suggest marketing and sales team to stress on product technology and quality. 4Ps model under-emphasizes the reasons why their solution would be of superior value. It distracts the team from leveraging their benefit as a trusted source of diagnostics, advice and problem-solving. Therefore, the role of 4Ps needs to get an upgrade using interactive communication-based concepts and the latest technologies that are available in the current era.
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Better communication will lead to better marketing. As the saying goes, the product in B2B marketing can be improved by adding co-design concepts and production upgrade strategies. Co-design brings the concept of multidisciplinary collaboration into practical application. It requires honest knowledge sharing, willingness to explore untested ideas and a genuine interest in solving the problem. Additionally, it reveals blind-spots, speeds up the decision making, empowers, and aligns teams. According to the paper from Christopher Durugbo(2014) on Managing industrial service co-design, we can convey that adapting to co-design will lead to better efficiency in production as well as to improve the communication between seller and client.
The time taken to produce the design is reduced by co-design concept. Involving the marketing and sales team during the design phase will help in designing a better product by avoiding the pitfalls they faced in similar products previously. This overcomes an issue reported in the Harvard Business Review where the marketing and sales team’s expertise were not utilized as a trusted source for advice and problem-solving. In terms of production, we can improve production efficiency and lower the costs by constantly developing new production methods and materials with the help of Research and Development. Also, updating the knowledge of the employees by giving the latest technology-based training will improve productivity. The above arguments signifies how co-design and production upgrade strategies are adding values to the product in industrial marketing.
As there is a significant growth in technology, the pricing related details can be found online which helps to provide transparency in pricing. It helps to gain more knowledge of competitive pricing by comparing their price with competitors, and this also gives a clear understanding of their relative market value. This can reduce uncertainty and inspire to get more confidence. Price transparency will also help the premium business to find their most price-sensitive customers. A case study conducted by Marco Guida, Jorge Postigo and Stuart Schardin (2014) for McKinsey & Company on Turning pricing complexity into pricing advantage that boosts return on sales stated the following ideas. We can improve the transparency of pricing in B2B marketing by collecting complete data regarding transaction history. This includes price, product, and customers from previous years which will give full transparency into deploying pricing and discount strategies.
We can create a tool which includes all the updated information regarding pricing details of products which provides more transparency. To retain the customers, we can adjust price recommendation with the help of an experienced sales manager who has more knowledge in individual customers and market places. These pricing strategies will help to secure a competitive edge in the market as the customer will have a good insight into the pricing data along with product technology and quality. They can use this data for planning their future purchases. This overcomes an issue reported in the Harvard Business Review where the cost of entry was only used as a differentiating factor. Also, this implies how transparency in pricing has effectively improved the role of price in marketing.
