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Manufacturer's Corner: The Difference Between Industrial and Consumer Marketing

The majority of college marketing graduates are simply unprepared to go to work for industrial companies. So attests Jack McNally, dealer sales manager of Columbia Steel, a crusher wear parts manufacturer.

"The methods for marketing industrial products are substantially different from consumer marketing," explains McNally. Our industry has to invest considerable time in on-the-job training to teach these people industrial sales and marketing. It would be helpful if college professors went out into the manufacturing sectors to see for themselves how industrial products are bought and sold."

McNally's experience mirrors my own in training salespeople to sell industrial equipment. For years, we took people who were very familiar with the equipment (like engineers and technicians) and tried to make them salespeople. This only worked part of the time, and because these people never had any education or training in industrial marketing, the on-the-job training was very extensive.

I would much rather have had a non-engineering college graduate who was people-oriented…provided, of course, they had some education in industrial marketing and sales.

This problem has been around for years. It costs industrial corporations a great deal of time and money to train salespeople, and even after they have become good at sales, they still don't know anything about industrial marketing. In short, we need to develop college courses that teach industrial marketing, as well as industrial sales.

To provide you with a better understanding of the problem, let me explain some of the fundamental differences between consumer and industrial marketing:

Product complexity. First and foremost, industrial products are very complicated and require a lot of technical knowledge to sell. Industrial and technical products range from off-the-shelf bearings to custom-engineered machines of incredible complexity. The more custom the product, the more custom the marketing strategy.

Industrial buyers. Consumer marketing presupposes powerful sellers and passive, inexpert buyers who can be influenced to purchase by a variety of advertising techniques. In contrast, industrial markets consist of very knowledgeable buyers (and often buyer teams) who analyze products and purchases in terms of user benefits often measured in dollars or as ROI.

Bids and quotations. Consumers either buy or don't buy from listed prices. On the other hand, industrial products are often sold by request for quotes that may require a quotation with elaborate specifications to define the product.

Advertising and promotion. Developing a newspaper ad for impulsive shoe buyers is relatively straightforward, but it is very difficult to even identify the buying influences of dragline machines or material-handling robots. Inquiries produced by industrial advertising are only the beginning of a long, expensive selling process—sometimes lasting years before the sale occurs.

Market information. There is a lot of database information available on consumer products and an enormous amount of consumer demographic information, making consumer market research relatively easy to accomplish. On the other hand, information on industrial market niches is very difficult to acquire and is generally qualitative. This requires considerable industrial experience to gather.

Case studies. Cases showing how large consumer products companies market hairspray have little relevance to a small company marketing dragline shovel teeth. In fact, marketing strategies used by large companies aren't even practical for small companies that must market with limited staff, money, and time.

Product range. Marketing strategies change drastically with the type of product, length of the sales cycle, product size, and the number of decision makers. For example, the selling, promotion, and pricing strategies used to sell low-unit-price, standard motors to known accounts are fairly straightforward. In contrast, capital equipment designed for production lines is usually large, complex in design, and has high unit prices that must be justified in terms of returns to the company and approved by the board of directors.

Fundamentally, as the industrial products become more complex with higher prices and longer sales cycles, the advertising, selling, pricing, and product development strategies are more complex and more specific to the situation.

Manufacturers of industrial products, large and small, need help with industrial marketing. Therefore, large companies have to train new employees on the job, and small companies hope to hire people with industrial marketing experience.

As mentioned earlier, there is definitely a need for college courses, seminars, and training on industrial marketing. Of the 2,500 business schools in the U.S., I believe less then 10 percent teach an industrial marketing course. I'd be very curious to hear from marketing professors and get their take on this problem.

Mike Collins is the author of "Saving American Manufacturing" and its companion book, the "Growth Planning Handbook for Manufacturers." To learn more about the author or these titles, visit www.mpcmgt.com.