The relative importance of industrial promotion tools

This article describes a survey of the perceptions of organizational buyers regarding the extent to which their purchasing decisions are influenced by various promotional tools. The results of this survey provide some practical implications for industrial marketers regarding the relative effectiveness of various promotional tools and the relative emphasis that they should place on each of them.     

Information,Promotion, and the Adoption of Innovative Consumer Durables*

The diffusion of innovative new products is critically dependent on the transmission of relevant information to potential adopters. Existing research indicates that the relative effectiveness of different communication tools depends on the type of information being communicated. Written and verbal communication tools can be effective when consumers make adoption decisions based on search attributes. However, when adoption depends on experience attributes, marketers must find ways to effectively expose consumers to these attributes. In this paper the authors explore the effectiveness of promotional incentives in motivating consumers to engage in behaviors that should increase their understanding of an innovation's experience attributes. To the authors' knowledge, the research described here is the first published study of the relative effectiveness of different promotional vehicles in stimulating adoption of a consumer durable. The empirical analysis is based on data collected in a real‐world experiment involving 614 households. Just over half of these households received a free DVD movie disc as an incentive to participate in the study. The authors assigned the participating households to four treatment groups of 100 households each and a control group of 214 households. The households in the treatment groups received one of four promotional offers that featured some form of a $50 monetary incentive. These promotional offers differed in the degree to which they encouraged behavior that exposed consumers to the experience attributes of a DVD player. After one month the authors surveyed these households again to determine how many purchased a DVD player in the preceding month. An analysis of this experimental data reveals that all four monetary promotions significantly enhanced the probability of adoption. In particular, the average adoption rate among the households receiving one of the monetary incentives was 41%. In contrast, none of the households in the control group reported purchasing a DVD player. Promotions that paid consumers for specific behaviors that precede purchase were no less effective than a coupon that reduces the purchase price by an equivalent amount. In addition, promotions that directly exposed consumers to experience attributes were more effective than promotions that simply provided consumers with the opportunity to learn about experience attributes. Finally, the gift of a free complementary product (a DVD movie) enhanced the effectiveness of three of the four monetary promotions. The authors close with a discussion of managerial implications and directions for future search.     

Industrial publicity: One of the best promotional tools

One of the most frequently forgotten and misunderstood promotional tools in industrial marketing is publicity. Yet most surveys rank editorial material in trade journals as one of the most important sources of information used by industrial customers in making buying decisions and evaluating products. This article discusses how industrial marketers can use publicity as an effective promotional tool, with emphasis on its major advantages, namely, high credibility and low cost per contact.     

The effects of purchasing proactivity on value creation and supply risk reduction in sourcing projects: Implications for marketers' capabilities

In many organizations, the role of purchasing is in a transition from a reactive order taker, into a proactive and internally integrated business partner. Building on a Resource-Based View and Capability-Based View, this study explores how purchasing professionals' involvement and proactive efforts in sourcing processes affect sourcing project outcomes, in terms of both value creation and supply risk reduction. The authors gathered data on 112 sourcing projects from a large, private financial services company with in-depth and structured interviews with key stakeholders. A structural model deploying the research hypotheses was analyzed using the Partial Least Squares technique. The results reveal that, driven by early involvement of and responsibility granted to the purchasing professional, purchasing proactivity enhances value creation and supply risk reduction sourcing outcomes. Specifically, proactivity mediates the effect of purchasing's involvement on value creation.This study empirically establishes the importance of purchasing proactivity, serving as critical capability of purchasing professionals. Following a dyadic logic, this impacts industrial marketers. More specifically, when purchasers build capabilities to show proactive behavior to enhance value creation and risk reduction, marketers need to develop capabilities to facilitate purchasers in their endeavors.     

Better use of the industrial marketing concept

Customer orientation is vital in order for industrial marketers to enjoy greater profitability in the industrial marketplace, which is at present characterized by rapidly changing environmental factors. These shifts include increased computerization of the purchasing departments, greater social and legal challenges to various buying organizations, deteriorating economic conditions and the changing role of the industrial purchasing manager. This paper suggests a way by which industrial marketers may adopt the marketing concept. The first part of the paper presents evidence of industrial marketers' failure to adopt the marketing concept and highlights the consequences of this practice. In addition, emphasis is given to the manner in which industrial marketers may adapt to the changing conditions—while capitalizing upon new opportunities that become available—by adoption of the marketing concept. The second part explores the use of market segmentation as a means for adopting the marketing concept. After reviewing the approaches that are now being utilized to segment industrial markets, a more pragmatic approach is presented.     

Artificial neural networks: A new methodology for industrial market segmentation

Neural networks are a type of artificial intelligence computing that have generated considerable interest across many disciplines during the past few years. The authors explore the potential of artificial neural networks in assisting industrial marketers faced with a segmentation problem by comparing their classification ability with discriminant analysis and logistic regression. The neural networks achieve higher hit ratios on holdout samples than the other methodologies. A marketer in a business-to-business situation may be able to segment a market more accurately, thereby improving efficiency for sales forces and other promotional activities, by using artificial neural networks.     

Support service is key for technology transfer to China

China, under the direction of its new political leadership, is extremely interested in purchasing the most up-to-date technology. However, still being a less-developed nation, there is some doubt about her ability to absorb this high-level technology. If the U.S. industrial marketers hesitate to sell this technology, China will buy it from other industrialized countries. The authors maintain that the U.S. industrial marketers must sell the high-level technology to China. However, they also must make sure that this technology will be transferred successfully. In order to assure the success, the authors suggest that special attention be paid to the development of marketing support service systems as highly technical industrial products are sold to China. These systems will at least temporarily overcome existing barriers to technology transfer and hence will facilitate smooth and enduring technology transfers in the long run.     

Impact of purchasing trends on industrial marketers

Purchasing departments have undergone dramatic changes during the past decade. This article examines key characteristics that changed during the 1970s including the purchasers' view of effective salespersons and women in purchasing. It is important that industrial marketers better understand these changes and subsequently implement marketing efforts that compliment the purchasing environment of the 1980s.     

The purchase of components: Functional areas of influence

The Webster and Wind model of organizational buyer behavior enjoys considerable popularity. However, not all of its constructs and relationships among constructs have been validated by empirical research. The purpose of this study was to provide empirical evidence concerning the relationships between three of the model's critical constructs: buying center membership, purchase situation, and purchase phase. The relationships studied were variations in the perceived relative influence of different functional areas (e.g., production, marketing, purchasing, etc.) across three purchase situations and four purchase phases. The results of the study clearly indicate that the functional areas are generally perceived to have varying amounts of influence across both the purchase situation and purchase phase. These results have specific implications for developing effective industrial marketing strategies.     

Buyer information sources in the capital equipment industry

To maximize the effectiveness and efficiency of industrial marketing communications, industrial marketers should provide product and/or service information to their customers via the communications channel considered most important by industrial buyers. This study attempts to determine if industrial marketers and industrial buyers attach equal importance to five channels of communication. The findings raise some important questions regarding traditional practices in industrial marketing communications.     

The impact of purchase situation on salesperson communication behaviors in business markets

This research addresses the impact of purchase situation on sales communication behaviors used by the salesperson in business markets. We hypothesize that different sets of sales communication behaviors will be needed and vary for different purchasing situations. Measures of a salesperson's communication behaviors were tested for different types of purchase situations. Differences were found in the persuasiveness of the salesperson's getting, giving, and using information, depending on the type of purchase situation. These findings help support the value of salesperson adaptability, providing an important variable on which to adapt.     

OK you are now an approved supplier—but you still do not get orders: Understanding the case of the P-Card

The purchase card (P-Card) was introduced in the 1990s as a payment mechanism for smaller value items so that purchase paperwork is reduced, itemized reporting and control become possible, and purchasing and payment are decentralized at the user level. Since the late 1990s, with E-procurement and B-to-B E-commerce, the possibilities of P-Card use have magnified exponentially. However, the adoption and success of P-Cards in organizations has been short of initial expectations.Using P-Cards with approved suppliers is an ideal situation for both buyers and sellers. In practice however, many P-Card users seem to buy many items from suppliers who are not on the approved supplier list. To make payments to these “new” suppliers, organizations need to make exceptions resulting in paperwork, costs, and loss of business for approved suppliers. However, there are many P-Card users who indeed follow the company-approved list and these users may be called “P-Card conforming users.”This article takes a knowledge-based approach and presents a model for conforming P-Card use (CPU). The model is tested in an organization, and results are used to derive managerial and research implications. While orientation training of P-Card users is important, both business marketers and purchasing departments need to reach out directly to the P-Card user to ensure that approved supplier lists work well in an electronic age.     

Small and medium-sized firms' import behavior: The case of Danish industrial purchasers

This paper focuses on the foreign purchase behavior of small and medium-sized industrial firms in a small European country, and is guided by three main research issues: (1) to what extent are small and medium-sized firms involved in international sourcing; (2) how do small and medium-sized firms initially make contact with foreign suppliers, and what are their motives for choosing a supplier; and (3) how do small and medium-sized firms perceive relationships with foreign suppliers in terms of perceived problems and cooperation? Through a survey administered in Denmark, the results show that small and medium-sized industrial firms are highly involved in international purchasing both within the European Union and abroad. Surprisingly, this involvement does not appear to be significantly driven by lack of domestic availability. Instead, the primary drivers for choosing a foreign supplier are price and quality. Finally, product adaptation appears to be a significant element of relationship formation between importers and their suppliers. The paper concludes with a discussion of results, implications, and directions for future research.     

A service perspective on business relationships: The value creation, interaction and marketing interface

Adopting a service perspective or logic on business directs suppliers' focus in business relationships towards engaging with their customers' business processes. The purpose of this article is to analyze implications for value creation and marketing of adopting a service logic in business relationships. In the article it is demonstrated that a service perspective is multi-dimensional, enabling the mutual creation of value, with service as a mediating factor in that process. It is argued that value creation, purchasing, usage and marketing are intertwined processes. Here supplier-customer interactions are in a focal position. This perspective enables marketers to better understand how to develop and extend service offerings through assistance to customers' processes relevant to their businesses. Therefore, the underpinning logic of industrial interactions is analyzed in detail, extending marketing's conventional boundaries.     

The digital vicious cycle: Links between social disadvantage and digital exclusion in rural areas

The Internet confers benefits on its users in a variety of ways, ranging from simple information acquisition and purchasing goods and services, to interacting with a range of individuals and groups in the wider processes of governance. Rural citizens stand to gain more than most, relatively, since the use of the Internet reduces, if not removes, former barriers (particularly that of distance) to such interaction. To that extent, the shrinking of the ‘digital divide’ (and particularly the increased availability of broadband Internet in the countryside) is very welcome. However, there is a danger that non-users of the Internet are disenfranchised by such developments, and these include some of the most disadvantaged and vulnerable sectors of rural populations. There is thus a risk that, as the Internet increasingly becomes regarded as the default communication medium, a minority becomes progressively disadvantaged, first in relative and then in absolute terms. This paper explores the links between digital exclusion and social exclusion in a rural context, to identify the likely consequences of this ‘digital vicious cycle’, and to consider the options for ameliorating these consequences.     

Purchasing professional services: A transaction cost view of the antecedents and consequences of purchasing formalization

Professional services represent an increasing share of expenditures in contemporary organizations. While these services are often of strategic importance, they are also perceived as being difficult to purchase and use, which creates challenges for the purchasing process. In order to address these challenges, organizations are increasingly engaging in systematic efforts to improve their ability to purchase professional services. These efforts focus on formalizing the purchasing process by introducing policies, guidelines, and other measures for the hiring of service suppliers. Based on a transaction cost economic framework, the current paper investigates the nature, antecedents and consequences of formalization initiatives in the purchasing of professional services. The results from a cross-sectional study of 76 large Swedish organizations show that the formalization of purchasing professional services takes two different forms: the formulation of policies and the establishment of preferred supplier agreements. The former is driven by company size, whereas the latter is driven by the frequency of purchase transactions. Only the establishment of policies, however, is found to be positively related to organizations' perceived ability to purchase professional services.     

Successful branding of a commodity product: The case of RAEX LASER steel

In today's competitive business environment, industrial marketers must work harder than ever before to achieve some degree of differentiation for their products to avoid being viewed as a commodity. Many firms have sought to achieve this differentiation by branding their products. Branding, however, is more than simply putting the company's name on a product and broadcasting that name to its target audiences. For industrial products, branding is a multidimensional construct that includes not only how the customers view the physical product, but also the logistics, customer support, and corporate image and policy that accompany this product. This paper discusses how the Finnish steel company Rautaruukki was able to successfully incorporate these four components into their RAEX LASER steel, a brand specifically targeted for job shops who do laser cutting. The paper concludes with managerial implications and suggestions for how industrial marketers might implement their own branding strategy.     

A descriptive model of the trade-show budgeting decision process

Spending decisions for industrial trade shows are studied here. A discriminant analysis procedure identifies those factors that separate products that use trade shows from those that do not. The product category, fraction of sales made to order, industry sales level, importance of the product to the customer, and purchase frequency were found to be most instrumental. Another model evaluates the level of spending for products that use trade shows. The sales of the product and stage in the life cycle are shown to be most important in the budget-setting process. The potential use of these results for industrial communications and promotional planning and evaluation decisions is discussed.     

Internet integration into the industrial selling process: A step-by-step approach

The Internet has evolved into an outstanding tool for industrial salespeople. Reps use the Internet to prospect new accounts more efficiently, serve existing customers more effectively, and build more enduring business buyer relationships. This paper examines these practices and possibilities in detail while offering ways to facilitate and augment WWW usage. Each phase in the selling process is addressed by proposing specific websites, web-based tools, and techniques that industrial salespeople can use to further enhance their selling competitiveness and effectiveness. Examples of how the Internet is used by salespeople in a variety of industries are described. A series of propositions and a new conceptual model summarizes the positive effects of the increased Internet utilization on individual selling effort. The paper concludes with a discussion of managerial implications for sales management and recommendations for future research.     

Similarities in industrial procurement across four countries

This article reports on a cross-sectional, longitudinal, and comparative study of industrial buyer behavior. The study points to clear similarities in industrial purchasing between buyers in two industries in four countries. It also shows similarities in results using the same instrument taken in studies several years apart and points to generalizations about the involvement of different departments in the purchase of a variety of product types in different international markets.