A Complete Introduction to Industrial Product Marketing
In this Article
Marketing is one of the most essential departments in a company. The evidence is all over the place, no matter where you look. For example, the latest CMO Survey suggests that marketing expenses account for 12.3% of the overall budget of a typical American company. If that is not enough, this budget has increased annually since February 2021 and is expected to expand by 5.7% in the next 12 months.
But why would a company spend this much on marketing? What do marketers do that warrants expending vast amounts of a company’s capital? For starters, there is a misconception that marketing equates to advertising –that all marketers do is showcase the company’s products or services to potential and existing customers far from it. According to the CMO Survey, 94.1% of the respondents said that marketing is primarily responsible for the brand. On the contrary, 92.3% said marketing takes care of advertising. Another 77.9% said marketers are responsible for promoting their company’s products or services.
The biggest takeaway from the survey is that marketing is not all about advertising. Instead, marketing (industrial or consumer) is broad, so much so that most organizations fail to determine where a marketer’s responsibilities start and end. One cannot help but infer that the marketing concept seems fuzzy to some, yet it forms the foundation of a successful business. What then happens when one begins asking specific questions like, what is industrial marketing? What do industrial marketers do? And what are their core responsibilities regarding enabling the organization to achieve important goals, such as revenue growth?
This article has one primary purpose: to clear the fuzziness around industrial marketing, i.e., provide a complete ‘get-started’ guide to industrial marketing, including a definition of key terms and a discussion of the main characteristics and concepts.
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Industrial Marketing Explained
Industrial marketing involves one company showcasing goods and services to other companies who then sell to other businesses or end consumers. It centers on business-to-business (B2B) relationships and interactions, which is why industrial marketing is also commonly known as B2B marketing. In fact, some argue that the term industrial marketing was popular pre-1990s, and it has been dropped for B2B marketing ever since.
According to one analysis, industrial marketing was popularized in the 1930s United States. The economic crisis that resulted from the Great Depression changed the purchasing habits of industrial buyers, creating the need for more market research and targeted advertising. During this time, known as The Sales Era, the productivity of manufacturing increased, leading to a surplus of available products. This surplus was further exacerbated by the Great Depression, which led to a supply-demand imbalance.
Marketers had to adapt their strategies to these changing circumstances. They developed and refined tactics such as the sales pitch during this period. As the economy recovered in later years, the role of the door-to-door salesman emerged. These salespeople needed to sell consumers items based on convenience and recreation but not always necessities. At the same time, the business of companies buying from each other expanded, creating an opportunity for salespeople specialized in the industrial market. Industrial marketers and consumer market marketers engaged in innovative practices that captured the attention of marketing scholars who codified and disseminated such practices. At the same time, marketing academics often developed new research methods or theories that practitioners subsequently adopted. The result was the emergence of two distinct aspects of marketing: B2B and business-to-consumer (B2C).
While the term B2B marketing is most commonly used, industrial marketing is still relevant because of the nature of this practice. It focuses on the industrial market. Before proceeding any further, it helps to define a few key terms:
Defining Key Terms Used in Industrial Marketing
The word “industry” pertains to a particular sector of economic activity that involves creating or manufacturing services and goods. It may also refer to a set of enterprises or firms specializing in a specific industry type. The term describes the activities in which companies engage, as well as those that engage in those activities, resulting in particular goods and services. So, the noun “industry” often describes the various types of markets, such as food, mechanical and electrical engineering, and construction, but also segments like building, marketing, and fishing.
To further refine the understanding of what industry is all about, consider the list of industries and sectors defined by the International Labor Organization (ILO). According to the institution, there are 22 industries and sectors.
According to the Collins Dictionary, “industrial” is an adjective you use to describe things that relate to or are used in industry. So, marketing activities that relate to industry can be described as industrial marketing activities. But this word can also refer to businesses producing goods and B2B markets. This definition is predicated on the fact that most industrial goods are sold to other businesses.
III. Industrial products
These are goods and services that industries use to produce end products, which means end consumers do not directly use them. They include raw materials, machinery, parts, tools and supplies, and accessories.
IV. Industrial market
The industrial market refers to all the entities that acquire goods and services, and they go on to become raw materials for businesses that produce consumer products. It involves one business dealing goods or services to another company instead of a consumer base. The industrial market focuses solely on the goods and services provided for producing a separate end product (industrial products). The typical players in this market include manufacturers, wholesalers, retailers, government agencies, public institutions, and non-profits. You can call them industrial buyers.
However, experts at B2B International state that the term B2B is more commonly used today than industrial. As such, “industrial” is best referred to as B2B, industrial products as B2B products, and the industrial market as B2B market. This also means industrial marketing is best called B2B marketing, and industrial buyers are B2B buyers.
B2B is the critical principle that makes industrial marketing unique. The other common type of marketing is consumer marketing, which, as the term implies, focuses on showcasing products and services to end consumers. The types of marketing differ in many other aspects, including the nature of business customers, formal purchasing procedures, complex products/services, and the importance of organizational buyer-seller relationships. Read our previous article for a detailed discussion of the differences between B2B and B2C marketing.
Key Characteristics of Industrial Marketing
Derived demand is a critical concept in the B2B space. It refers to the fact that demand for industrial goods depends on (or is derived from) demand for consumer goods. For example, a manufacturer of power tools like drills and saws will purchase materials like motors, plastics, batteries, and metal components based on their demand forecasts for how many power tools consumers/contractors will buy.
If consumer demand for power tools increases as more construction projects start, the derived demand for motors, batteries, etc., to make those power tools will also increase. The power tool manufacturer will need to order more components and raw materials from their industrial suppliers.
On the other hand, if new housing construction slows down, contractors may purchase fewer power tools. As a result, the power tool maker will reduce orders for components as they scale back production targets. Put simply, the demand for industrial goods is derived from and driven by fluctuations in consumer demand for end products.
Inelastic demand describes the situation where changes in the price do not produce a significant shift in demand. This is often the case with industrial goods because they are essential inputs for production processes.
For example, a manufacturer of residential windows relies on supplies like glass, aluminum framing, and silicon sealants. Even if the prices of these raw materials increase, the window manufacturer likely cannot dramatically reduce their purchases. These materials are critical for their production capabilities and ability to fulfill orders. Instead, the manufacturer may choose to absorb smaller price increases or aim to negotiate pricing but cannot cease purchasing the essential inputs.
Industrial goods like manufacturing equipment or factory supplies are often highly complex, with many customized features and specifications. This requires buyers to conduct in-depth technical evaluations and compare products on attributes instead of branding. As such, marketers must possess extensive product expertise and the ability to educate potential clients on technical details.
In addition, marketers should prepare marketing collateral like catalogs, websites, and proposals that thoroughly document all product features, configurations, compatibilities, certifications, and other relevant technical attributes. However, this may be challenging if a business uses manual processes or stores product information in disparate locations. Using a product information management (PIM) system helps manage this complexity. PIM tools, such as Catsy, consolidate crucial product information into a central repository, enabling organizations to manage attributes effectively and efficiently.
Long Sales Cycles
The sales cycle describes the total time an industrial brand takes to close a sales deal. This cycle could be as short as a few seconds in consumer markets. However, B2B companies experience longer sales cycles because they go through several steps before closing the deal. In some cases, the process takes several months, up to seven months, to complete. Below are the typical stages of the B2B sales cycle:
- Demand generation: Involves attracting interest in your products.
- Connecting with and qualifying leads: This is where potential customers (leads) are identified, and their likelihood to buy (qualification) is assessed.
- Presenting offerings: The product or service is offered to the potential customer.
- Addressing customer questions and concerns: Any objections or concerns the potential customer raises are addressed at this stage.
- Closing the deal: This is where the final agreement is made, and the sale is completed.
- Following-up: After the sale, the company follows up with the customer to ensure satisfaction and potentially identify opportunities for future sales.
- Client nurturing/retention: Maintaining a relationship with the client after the sale, providing support, and encouraging repeat business.
The fact that B2B buying involves multiple parties is a factor that influences the long sales cycle. For example, suppose a construction company intends to purchase a new set of power tools. Various teams and specialists will influence the final buying decision as follows:
- Technical experts such as engineers will evaluate whether products meet functional specifications, integrate with existing systems, and satisfy performance requirements. Their analysis carries weight.
- Financial analysts will assess the costs, potential ROI, and budget impact of purchases. Their approval is critical for large investments.
- Operations managers will examine how the new equipment would impact production workflows, capacity, and processes.
- Senior executives like Plant Managers or CFOs give final sign-off on major deals and ensure alignment with broader corporate strategy.
- Procurement specialists manage vendor selection, negotiations, contracts, and purchasing protocols.
- External consultants may analyze options and aid selection for highly complex purchases.
Reciprocal interdependence in industrial marketing describes the close collaborative relationships and two-way value exchange that often develop between B2B buyers and sellers. For instance, industrial companies frequently rely on suppliers as partners that enable their operations and production capabilities. The buyer’s success is dependent on the supplier’s performance.
Meanwhile, suppliers may provide extensive technical support, maintenance, and training to customers after sales. Customer service enhances the usefulness of products for buyers. Simply put, the B2B market is characterized by long-term relationships that go beyond the sales transaction. The most critical feature of this relationship is mutual reliance and benefit.
Key Concepts in Industrial Marketing
Learning the main characteristics of anything is crucial. It helps you understand the subject matter more deeply. For example, knowing the elements of industrial marketing can help you understand why it is essential and how it helps industrial brands achieve goals. On the contrary, learning the key concepts of something enables a more detailed understanding – after all, concepts are the fundamental ideas that underpin a particular subject. They are the building blocks that form the basis of more complex ideas and understanding. Let’s discuss some basic concepts of industrial marketing.
Segmentation refers to dividing the broad industrial sector into distinct sections based on attributes like industry, customer type, geography, company size, usage patterns, etc. It allows industrial brands to conduct more targeted marketing campaigns and avoid the pitfalls of a one-size-fits-all approach. The trick here is to match products and messaging to specific segment needs. Some typical segmentation approaches include:
- Industry (manufacturing, transportation, utilities, construction, etc.)
- Customer type (OEMs, wholesalers, governments, institutions)
- Location (country/region, urban/rural)
- Company size (large enterprises vs SMEs)
- Usage patterns (light vs heavy usage)
Market segmentation is an essential concept in B2B marketing. Understanding it allows marketers to identify the differences between groups of customers that impact marketing strategy, such as:
- Buyer motivations and purchase criteria
- Distribution channels used
- Decision-making unit and influencers
- Purchasing processes and procurement policies
- Price sensitivity
- Service needs and support expectations
Buyer Needs Analysis
When Neil Borden, a Harvard University professor, conceptualized marketing mix (the 4 P’s of marketing) in 1964, he indicated, although not explicitly, that understanding customer needs was essential. He argued that knowledge of the buyer’s pain points increases the likelihood of brands registering success when advertising their products. The same philosophy underpins the buyer needs analysis technique in B2B marketing.
Buyer needs analysis involves in-depth research to understand the needs, motivations, requirements, and constraints that drive purchasing decisions for organizational customers. This goes beyond surface-level demographics to uncover what truly matters to different buyer types in the industrial context.
Industrial marketing professionals utilize various techniques to conduct buyer needs analysis, such as:
- Interviews with relevant stakeholders like end users, technical experts, and executives within the customer organization.
- Observing production processes and workflows firsthand.
- Reviewing request for proposal (RFP) documentation and criteria.
- Analyzing a customer’s current solutions to identify pain points and challenges to be addressed.
- Ongoing industry research that helps understand broader trends influencing customer needs.
An effective buyer needs analysis will assess both functional needs around technical specifications, reliability, durability, etc., as well as organizational needs related to cost targets, management priorities, operational constraints, etc.
Organizational Buying Process
One of the key characteristics of industrial marketing discussed earlier is long sales cycles. It was revealed that B2B sellers follow a series of well-defined steps to close a sale, which might stretch to seven months. Similarly, B2B (organizational) buyers have a template guiding how they acquire new products, which is best known as the organizational buying process. It is a series of complex decisions for evaluating, selecting, and purchasing from potential suppliers. The process begins with problem recognition. With the problem adequately defined, the buyers proceed to information gathering, supplier identification and evaluation, request for proposal, negotiation, then order placement. The buying process can be boiled down to three stages: research, evaluation, and purchase.
- Research stage
- Recognize a problem or need that purchasing could address.
- Determine critical requirements and product specifications.
- Identify and research potential suppliers through industry directories, trade shows, experience, etc.
- Issue RFPs/RFQs to qualified suppliers to gather data.
- Assess proposals and shortlist options that merit further evaluation.
- Evaluation stage
- In-depth analysis of shortlisted supplier options involving product demos, site visits, pilot tests, and stakeholder reviews.
- Suppliers complete technical response process addressing all specifications.
- Determine criteria for final decision – functionality, cost, reliability, service, etc.
- Evaluate total costs – purchase price, operating costs, etc.
- Conduct a risk analysis of the potential downsides of each option.
- Develop recommendations for final decision-makers.
- Purchase stage
- Before agreeing to terms, final negotiations around pricing, payment terms, warranties, service contracts, etc..
- Contract finalization involving legal and procurement teams.
- Physical product ordering, delivery, installation, and training.
- Ongoing management of supplier relationships, new requests, issues, etc.
One of the most distinguishing factors of the B2B market is that buyers and sellers interact long after the purchase. Therefore, it is natural for marketing practices to value relationships. Relationship marketing focuses on establishing close, long-term partnerships between buyers and sellers, which requires a customer-centric approach. This approach is successful when you prioritize buyers’ needs and seek to understand them deeply.
Product Support Services
The long-term relationships between buyers and sellers in the B2B market revolve around satisfying customers and hopefully retaining them for a long time. Businesses can display a commitment to the relationship through high-quality product support services post-sale. As stated earlier, industrial purchases often involve complex equipment or systems that require ongoing maintenance, repair services, and troubleshooting assistance to keep operating efficiently. They may require employee training for safe, effective utilization.
Examples of post-sale support services include on-site training on operations, maintenance, and best practices. Industrial brands can supplement the training with manuals, videos, and virtual training. Even better, the companies can leverage PIM and digital asset management (DAM) solutions to help automate the creation and managing of product manuals, documentation, instructional videos, and other training content. Some solutions like Catsy PIM and DAM autogenerate PDFs of marketing collateral, enhancing efficiency and expediting workflows.
Trust is the currency of business, and only credible companies earn it. So, the question is: how do companies develop credibility? You can use the following tactics to build trust:
- Demonstrate deep expertise and competence regarding your products and the customer’s industry. Provide education through thought leadership content.
- Ensure product information, specifications, documentation, and marketing collateral are always up-to-date, consistent, and accurate across all channels, sales materials, and customer interactions. Use PIM and DAM, which centralize product data as a single source of truth, to enable this.
- Provide reliable, responsive customer service and technical support that resolves issues quickly and effectively.
- Maintain consistent product quality, on-time delivery, and execution of services.
- Maintain transparent communication and share insights that help customers make informed decisions.
- Build relationships over the long term. Earn loyalty through consistent performance and exceeding expectations.
Industrial marketing has evolved significantly over the past few decades, largely driven by digital technologies that have transformed business operations and interactions. While the fundamental principles of understanding customer needs and building relationships remain constant, the processes, strategies, and tools leveraged by industrial marketers look very different today.
Modern industrial marketing leverages digital channels and data-driven insights to attract and engage buyers. Content marketing, social media, and targeted advertising enable demand generation, while CRM systems track every customer touchpoint and interaction. Also, sales teams access product information and collateral on tablets and mobile devices while out in the field.
Therefore, to stand out and succeed in this digitally driven industrial landscape, B2B brands must become experts at managing product data and digital assets, which has made solutions like PIM and DAM indispensable tools. PIM and DAM establish a single source of truth for product content and marketing collateral, ensuring consistent, accurate product messaging across the organization and channels.
Industrial marketers who leverage these technologies will be best positioned to deliver exceptional customer experiences because they enable teams to create targeted, compelling campaigns quickly and efficiently. In other words, an industrial marketing technology stack with PIM and DAM at the core is imperative for industrial brands seeking to differentiate themselves. The future success of industrial marketing will rely on mastering product data and digital assets.
Retail marketing focuses on creating an immersive shopping experience through store layouts, visual merchandising, and targeted promotions, while commercial marketing aims to build long-term relationships with customers through content marketing, trade show engagement, and consultative sales.
Retailers can use loyalty programs and conversion optimization techniques to encourage repeat visits and increase sales. Loyalty programs provide points, discounts, and tiered rewards to encourage repeat visits and higher spending, while conversion optimization involves testing and data analytics to optimize conversion rates.
Marketers in both industries should conduct market research, develop customer personas, create targeted messaging, focus on lifetime customer value, and leverage automation and digital channels.
Businesses can use product information management (PIM) tools for effective product data management and digital asset management (DAM) platforms to manage and distribute digital assets appropriately. Some vendors, like Catsy, provide PIM and DAM within a single platform.
By learning from each other’s strategies, marketers can achieve greater success in their respective industries. For example, retail marketers can benefit from commercial marketers’ focus on long-term relationships with customers, while commercial marketers can benefit from retail marketers’ expertise in creating an immersive shopping experience.