The recent snowstorms ambushing the United States and Britain have surpassed the winter weather we have become accustomed to in the past 30 years. This fact, coupled with the tough economic environment, with townships and government agencies cutting costs and slimming budgets, has caused a shortage of supply in gritting salt used to clear the roadways. The article in "The Economist" has highlighted the surge in demand for this commodity, causing prices to rise and salt mines to suddenly need an unexpected increase in their production. Gritting salts weight and expense to transport makes it a largely regional commodity. Only a region that is physically incapable of producing its own salt imports it ("The Price of Salt," 2010).
In Britain, the Salt Union is the primary supplier of rock salt. Despite the fact that their largest salt mine is able to produce 30,000 tons of salt per week, after the back to back blizzards and freezing temperatures affecting the region, the plant has been unable to meet demand despite the plant operating at full capacity. Additional transport issues involving the blockage of roadways surrounding the mine has led to a dire situation (Sturcke, 2010). The combined factors of the surge in demand and the inability for producers to meet that demand have resulted in the short run supply of rock salt being highly inelastic.
There are no widely used substitutes for gritting salt (there are a few such as magnesium chloride, used in the state of Oregon "Oregon Department of Transportation"2010), the safety and accessibility of the major roadways is a necessity, the percentage of a town or counties budget earmarked for salt is fairly small, and the price change is a temporary measure. These factors make gritting salts demand inelastic.
Industrial goods are raw materials, fabricated materials and parts, installations, accessory equipment and operating supplies. Raw materials are products destined to become part of another product. Fabricated materials are products that have already been processed. Installations are major equipment with long lives such as buildings, generators and aircraft. Accessory equipment aids and implements production and includes such things as machinery. Examples of operating supplies are lubricating oil, ball point pens and floor wax.
The four characteristics of industrial demand is derived demand, inelastic demand, widely fluctuating demand, knowledgeable demand. Demand for industrial goods is derived from consumer demand this is what is meant by derived demand. Industrial demand for products such as automobile tires is really dependent on the demand for automobiles by consumers. Industrial products represent a small part of a bigger product is most cases. Price sensitivity is low. Generally the demand for industrial goods is subject to wide fluctuation. Industrial buyers are usually very well informed in relation to consumers. They also generally have more specialized interest in terms of product purchases.
There are several uses for Business to Business uses of direct marketing, these are:
- Generate qualified "leads" for salesperson follow-up.
- Achieve direct sales remotely (i.e. via catalogs and Websites).
- Reinforce all sales efforts.
- Introduce new products.
- evelop new markets and applications.
- Build industrial customer goodwill.
- Conduct industrial market research.4. Describe the challenges facing industrial marketers today.
There are five major challenges facing industrial marketers these are:
Marketing costs that are increasing while the audience reached is decreasing. It costs more generate awareness than ever before.