What is an Industrial Product?
An industrial product is a type of product purchased by a business firm for consumption, rendering services, or reselling purposes. Industrial products are also called business products.
Industrial products can not be directly used by consumers, these products need to be processed to be able to use by end consumers. Usually, industrial products are those which are purchased for industries or business use.
These products are purchased for producing other products or for reselling purposes. For example, if a person buys a laptop for his personal use, this is a consumer product. If the same person buys the same laptop for business use, this is an industrial product.
So the basic difference lies between industrial and consumer products is the purpose for which the goods are purchased. Industrial goods’ main buyers are the other business or commercial institutions and such products are mainly used in B2B scenarios.
Characteristics of Industrial Product
The following are the main characteristics of industrial goods.
As compared to consumer goods, industrial goods are purchased in huge quantities. The objective of purchasing these goods is to fulfill the needs or requirements of business organizations.
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Industrial goods are mostly purchased for either reproduction or resell purposes. In some instances, businesses buy products for consumption purposes such as snacks for employees.
Industrial buyers are few but large in size. The industrial market has few buyers who buy their requirement of products or services in large quantities.
Industrial buying is mostly technical and based mostly on reasons. Professional employees are hired or appointed to buy such industrial goods.
A large part of the demand for industrial goods and services is inelastic. There is very little impact of the changes in price on the quantity demanded of the products and services.
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Types of Industrial Products
There are six main types of industrial goods which are mentioned below with examples.
Raw materials are industrial products that are in raw form and to make them usable by consumers they need to be processed. Raw materials are the first part of the production process.
Sugarcane, jute, textiles, etc. are examples of raw materials which need to process in order to be finished goods. Take an example, to make a final product sugar, sugarcane is needed to be processed.
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These are the goods fundamental for business organizations to smoothly run the production process. These include the products like buildings, equipment, machines, land, etc.
For example, you must have a machine to process the sugarcane in order to produce the sugar. Without these capital products industries will not be able to process raw materials and produce final products.
As the name suggests, essential equipment – is the industrial products needed to run the operations of industrial smoothly. For example, automobiles, computers, machinery, etc.
Essential equipment is the utility products that are required to produce, process, and sell the products.
Component materials are the upgraded version of raw materials. These are the industrial products that are to some extent already processed and assembled to make final products.
In addition, component materials are finished products for an organization as well as raw materials for other organizations. For example, a tire is a finished product for a business but it needs to be assembled in order to complete a bike, cycle, car, or other automobiles.
These are the industrial products that do not have an active part in the production and selling process but they assist in the production and selling of finished goods without being a part of it. For example, trolleys, small power tools, forklifts, display racks, etc.
Services and Supplies
These are temporary products and services that aid in creating or controlling the end product. The phrase “supplies” refers to any temporary items or materials required for the regular operations of a firm or business.
They are only ever utilized to support business operations and are never included in the finished goods. Examples include lubricating oil, stationery, and brooms for cleaning factory floors.
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Business services are typically provided by third parties to businesses and are already in use because businesses do not want to invest the time or energy necessary to get routine operations up and running.
These consist of maintenance and repair items like paint, nails, etc., and operating supplies like a lubricant, computer, stationery, writing paper, etc.
Importance of Understanding Different Types of Industrial Products
Different types of industrial products have different marketing considerations. For example, if the raw materials are produced from an agricultural source, many procedures are involved in production and distribution activities.
The procedures largely control the supply of raw materials. These products are perishable in nature and can not be produced at a uniform rate throughout the year due to the uncertainty of climatic conditions affecting the production of these products.
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Similarly, for the products like supplies and services for distribution many middlemen have been used therefore the channels of distribution become longer.
These products have competitive prices i.e. low-profit margins. As such, it is necessary that you should first understand the different types of industrial products, and their nature, and apply relevant marketing strategies.
Examples of Industrial Product
Since we have already understood what the industrial product is and its different types. Let’s point out some examples of industrial goods.
- Raw materials (natural resources, jute, textiles, seeds, wood, minerals, etc.)
- Capital goods (heavy machines, land, buildings, and other equipment necessary for production)
- Essential equipment (machinery, typewriters, computers, automobiles, etc.)
- Component materials (engines, auto parts, switches, gears, tires, etc.)
- Accessory products (trolleys, small power tools, forklifts, display racks, etc.)
- Service and supplies (cleaning supplies, stationery supplies, maintenance supplies, etc.)
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