Structure of the industrial market - Industrial (B2B) marketing

Industrial Market Structure

As mentioned earlier, the industrial market is a company that purchases goods for further use in the production, resale or lease process. The structure of the industrial market is shown in Fig. 1.2.

Structure of the industrial market

Fig. 1.2. The structure of the industrial market

Consider this structure in more detail.

1. Businesses include:

• industrial and other enterprises in various sectors of the national economy, for example in the field of engineering, automotive, transport, etc .;

• intermediaries - dealers, distributors, retail chains;

• organizations that provide industrial services in the field of installation, commissioning, service, logistics, banking system, etc.

2. Public institutions include various government bodies, both at the federal level and at the regional and local levels.

3. Public organizations include trade unions, consumer protection societies, various social organizations and movements, etc.

In general, the industrial market is quite large - its sales volumes far exceed the sales volumes of the consumer market. Different components of consumer goods pass through several stages of sales, processing and resale, and only then reach the consumer market. For example, the sale of leather jackets in the consumer market. Initially, in the industrial market, the procurers sell leather to companies that paint it and paint it. After that, the skin is sold to companies engaged in tailoring, and ready-made jackets are sold to wholesale companies, which, in turn, sell them to retail chains. At the same time, at each stage, each link buys related goods and services. In the B2B market there are several stages of purchases only to ensure one purchase of the end consumer in the consumer market.

The industrial market or market B2B is rapidly becoming global. Globalization is facilitated by the influence of several groups of factors (Figure 1.3).

Factors affecting the globalization of the industrial market

Fig. 1.3. Factors affecting the globalization of the industrial market

Let's review them in more detail.

1. The specifics of the market. This group of factors includes: the homogeneity of consumers in several countries, their globality, shortening the product life cycle (JTS), globalization of brands, the internationalization of commodity circulation channels .

2. Environmental factors. This group of factors includes: developed communications, a reduction in the cost of logistics costs, integration policies, and the intensity of technological changes.

3. Economic factors. This group of factors include: the effect of scale in production and distribution, high resource efficiency, the high cost of developing and testing the product, the difference in costs in different countries.

4. Competition factors. This group of factors includes: the competitive advantages of globalization, the emergence of new markets before other companies, the globalization of competitors, the interdependence of countries among themselves.

Among the main trends that determine the development of the industrial market, we can distinguish the following:

1) integration. Expressed in the form of mergers, acquisitions, financial and industrial groups, etc. At the same time horizontal integration develops more actively than vertical integration. This is explained by the fact that horizontal integration reduces the level of competition in the market, thereby increasing profitability, providing price increases, creating barriers to entry, thereby ensuring a high level of concentration of sellers and their dominance over buyers;

2) outsourcing. Assumes concentration of efforts in a certain field of activity, with auxiliary and accompanying processes being provided by other companies. As a rule, outsourcing includes logistics, management of information technologies and databases, logistics, advertising, accounting and service. Accordingly, outsourcing provides an increase in the processes of specialization and interdependence. As a result of this process, the number of enterprises of the full reproduction cycle has significantly decreased; Companies of the industrial market pay significant attention to the training of personnel, introduce special programs for the relationship with partners, develop systems for automated management of customer databases ( CRM ).

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