B2B- Marketing Intelligence

Industrial Marketing Research


Marketing intelligence is an on-going activity to
provide continuous information for decision
making

Marketing research undertakes periodic projects
or studies to collect and analyse data with
specific objectives

Basic elements of MR apply to both consumer
and industrial marketing

But some major differences exist between the
both
 Consumer v/s Industrial MR

More reliance on secondary data, exploratory research and
expert opinion in Industrial Research

Market information is concentrated among a few people

Secondary data is available from government and non
government publications, trade and industry associations,
online databases

Understanding of technical factors is important for Industrial
research

Information to be obtained from design engineers,
production managers and material executives

Must have a technical orientation
 Consumer v/s Industrial MR...

Number of research studies is very less as compared to
consumer markets

More emphasis given to descriptive method compared to
observational and experimental methods of primary data
collection

Respondent cooperation ans accessibility hard to obtain

Defing the basic unit of research( Respondent) is difficult
as decisions are made by several members of buying
committee
 Industrial MR- Scope
1. Development of Market Potential

Information on sales and profit potential of different
product-markets is required to make decisions relating
to resource allocation in the diverse product-markets
− For a company manufacturing electric motors
following product markets exist

FH power motors( for consumer durables)

Small Range AC motors in rural markets

Medium range AC motors for industrial customers

High HP motors for big plants
 Industrial MR- Scope
2. Market Share Analysis

Market share of a industrial marketer is highly volatile and
changes frequently due to changes in
− Competitive strategies and actions
− Consumer requirements
− Economic and political conditions

It thus becomes an important performance parameter
3. Sales Analysis

Sales, costs and contribution are broken down by each
product line, territory, sales person, market segment and
customer

Analysis of actual performance against goals helps in
identification of problem areas
 Industrial MR- Scope
4. Forecasting
5. Competitor Analysis
6. Benchmarking
7. New Product Acceptance and Potential

It is important to find out the following aspects from
customers when the product is at concept testing in
prototype form
− Probability of purchase
− Aspects liked or disliked
− Potential usage problems
 Industrial MR- Scope
8. Business Trend Studies

Since the industrial demand is often derived, it is
important to study the patterns and trends of those
industries
9. Sales Quota Determination
 Industrial Marketing Intelligence
System


MR studies are carried out periodically to address specific
problems, but companies need continuous flow of information

Marketing Intelligence Systems provide relevant, accurate and
timely information on continuous basis

MR thus forms one of the components of a Intelligence System
 Industrial Marketing Intelligence System
MR
Studies

Industrial
Secondary Marketing
Marketing Market
Data DSS Strategy
Intelligence Response
Sources Development
System

Internal
Information
System
 Components
• MR Studies
– Sources of data from MR projects are labeled Data Providers
and are stored in memory
• Internal Information System
– Generates periodic reports which evaluate actual
performance with goals
– Coordinates requirements of all functional and key
executives
• Secondary Data Sources
– Available from on-line databases, Cds
– Relevant secondary data is seperated from the non-relevant
data
• Output from an intelligence Syatem is used by decision makers
• As these decisions become complex, a DSS is required to make
more effective decisions
The STP Framework
 STP Framework for B2B

Segmentation Targeting Positioning

1.Evaluate
1.Identify
Resulting
1.MR Target Customer
Segments
2.Segmentation Attributes
1.Select
Variables 1.Select
Target
1.Profile of Right Attribute
Segments
resulting 1.Communicate
1.Decide
Segments to each target
Target
market
Market Strategy
 Segmentation
• Market segmentation has not been practised in
B2B markets efficiently
• Difficulty in segmenting industrial markets
• Responses to marketing programs may not be
similar because of involvement of many individuals
with different backgrounds
• Not very beneficial if
– Few customers
– Single Large customer
– Unprofitable small market
 Selection of Segmentation Variables

• Consumer Markets are segmented on basis of demographic

or psychographic variables
• Industrial markets are segmented on the basis of
– Macro-variables
– Micro-variables
• In some cases a sequential segmentation process can be
used
 Macro-Variables
Type of Industry or Type Which industries should we market to
of Customer based on Standard Industries
Classification(SIC).
Type of customer includes
Government, Commercial,
cooperative or institutional
Company Size or Usage Based on Sales Potential market is
Rate segmented by large, medium and
small size customers
Customer Location What geographical areas. Customers
near factory or custers in specific
areas
End Use or Application Should we focus on specific end use.
Aluminium bars can be used for door
frames, electrical panels, TV
antennas, heat sink or bus body
building
 Micro-Variables
Customer Interaction Customers who need more
Needs information, help or discussions in
decision making
Organisational Customers who need financial
Capabilities support, more services or technical
support
Purchasing Policies Customers who prefer competitive
bidding, market based negotiated
prices, turn key contracts or service
contracts
Purchasing Criteria Customers who seek quality, service
or price
Personal Characteristics Personal characteristics of buying
centre members as risk takers, risk
avoiders or personal motives
Targeting
 Evaluating Segments
• Evaluation of industrial market segments can be done using four criteria
– Size and Growth
• Current Size of each segment
• Future potential using demand forecasting methods as time
series, regression, sales force estimates and expert opinion
– Profitability Analysis
• Difference between estimated sales revenue and marketing
cost of servicing and maintaining the segment in same time
period
– Competitive Analysis
• Strengths and weaknesses of existing and potential
competitors w.r.t. To different areas
– Company objectives and resources
 Selecting the Target Segments

• Companies can use an advanced DSS or a

Simple Matrix System(SMS) to select the
desired Target Segments
Factors/Segme Automotive Furniture Boiler Bicycle
nts
Size 60 25 30 50

Growth 20% 7% 10% 10%

Profitability Good Low Good Good

No. of 3 10 3 4
competitors
Comp. Strength Quality, timely Low prices Special raw Quality, timely
del. material del.
Comp. Service Small Scale Low supply of Relationship
Weakness raw material
Self Strengths Service and - - Service and
relationship relationship
Success Factor Large Volume, Simple, low Special raw Large Volume,
high tech. price material high tech.
Compatability High Low Low Average
with long term
obj