Industrial Products

Industrial products are those bought for further processing or for use in industrial product conducting a business. Thus the distinction between a consumer product and an

A product bought by industrial product is based on the purpose for which the product is purchased. If

individuals and

a consumer buys a lawn mower for home use, the lawn mower is a consumer orga nixa tionsforfu rther product. If the same consumer buys the same lawn mower tor use in a land

processing or for use in scaping business, the lawn mower is an industrial product.

conducting a business. There are three groups of industrial product: materials and parts, capital

items and supplies and services (see Figure 13.2). Materials and parts are industrial goods that become a part of the buyer's

materials and parts product, through further processing or as components. They include raw ma

Industrial products that terials and manufactured materials and parts.

enter the manufacturer's Rmv materials include farm products (wheat, cotton, livestock, fruits, vegetables)

product completely; and natural products (fish, timber, crude petroleum, iron ore). Farm products are

including raw materials supplied by many small producers, which turn them over to marketing intermedi

and manufactured aries that process ;ind sell them. Natural products usually have great bulk and low

materials and parts. unit value, and require a lot of transportation to move them from producer to user.

They are supplied by fewer and larger producers, which tend to market them directly to industrial users.

Manufactured materials and pans include component materials (iron, yarn, cement, wires) and component parts (small motors, tyres, castings). Component materials are usually processed further for example, pig iron is made into steel, and yarn is woven into cloth. Component parts enter die finished product complete with no further change in form, as when Electrolux puts small motors into its vacuum cleaners and Volvo adds tvres to its automobiles. Most manufactured

566 • Chapter 13 Brands. Products, Packaging and Services

materials and parts are sold directly to industrial users. Price and service are the most significant marketing factors, and branding and advertising tend to be less important.

capital items Capital items are industrial products that help in the buyers' production or Industrial goods that

operations. They include installations and accessory equipment. Installations partly enter the finished

consist of buildings (factories, offices) and fixed equipment (generators, drill product, including

presses, large computers, lifts). Because installations are substantial purchases, installations and

they are usually bought directly from the producer after a long decision period. accessory equipment.

Accessory equipment includes portable factory equipment and tools (hand tools, lift trucks) and office equipment (i'ax machines, desks). These products do not become part of the finished product. They have a shorter life than installations

and simply aid in the production process. Most sellers of accessory 1 equipment use intermediaries because the market is spread out geographically, the buyers are numerous and the orders are small.

supplies and services Supplies and services are industrial products that do not enter the finished Industrial products that

product at all. Supplies include operating supplies (lubricants, coal, computer do not enter [hefinished

paper, pencils) and repair and maintenance items (paint, nails, brooms). Supplies product a! all.

are the convenience goods of the industrial field because they are usually purchased with a minimum of effort or comparison. Business services include maintenance and repair services (window cleaning, computer repair) and busi ness advisory services (legal, management consulting, advertising). These services are usually supplied under contract. Maintenance services are often provided by small producers, and repair services are often available from the manufacturers of the original equipment.

Individual Product Decisions

Let us now look at decisions relating to the development and marketing of' indi vidual products. We will focus on decisions about product attributes, branding,

packaging, labelling, mid productsupport services.

Industrial Products