industrial products

1. Industrial products

2. Meaning
• Industrial products are those products
that are purchased by individual or
organizations for further processing, for resale
and for the use in operation a business.
• In other words If an individual, group or firm purchases the
product and services with further motive rather than personal
use, then they are known as industrial product.
• The buyers of industrial product may be business organizations,
organizational institution, private and government offices and
producers.
• Industrial products can be divided into five categories.

3. 1. Raw materials
• Unprocessed and semi- processed item that will be converted
into final product by a manufacturer is called raw materials.
• Finished goods are made by changing quality, shape, and form of
such raw materials. Form and utilities of raw material change
many times under the process of production. Such basic
materials are purchased by producer and business organizations.
• The raw materials are also divided into two categories as
i. Agricultural products such as millets, wheat, corn, paddy, cotton tobacco,
fruits animal products, and
ii. Natural products such as gold, silver, iron, copper, coal, petroleum, herbs.

4. Raw materials cont..
Features of raw materials
i. Buying frequency:- Raw materials are purchased frequently
ii. Life:- The life of raw material is very short.
iii. Per unit price:- Per unit price of raw materials becomes low.
iv. Limited Supply:- Supply of raw materials is limited, especially
natural raw materials.
v. Purchase quantity:- Raw materials are purchase in large
quantity.
vi. Availability:-It is available in limited area or place.
vii.Effect:-Raw materials cost affect the product cost.

5. Raw materials cont….
Marketing Consideration for raw materials:-
i. Branding:- More importance should be given to the quality of raw
materials than to the branding
ii. Before sales and after sales service:- No need of before sales and after
sales service.
iii. Transportation and warehouse:- As such goods becomes different in
quality and nature during transportation and storing, there should be
carefully stored and transported.
iv. Contract period:-Long term contract should be done for supplying such
goods of different quality and standard.
v. Promotion:-No promotional activities need to be conducted in
distribution of raw materials.
vi. Price competition:- Competitors price strategy of raw materials should
be consider when determining price of raw materials
vii. Distribution Channel:- Distribution channel should be short and direct

6. 2. Fabricating Materials and parts
• Fabricating materials and parts are those industrial products
that becomes an actual components of the finished products.
After including such materials in main product, new types of
product becomes ready.
• Such finished materials and parts are used without changing
their quality, form and nature to prepare a third product.
• Per unit price of such products are relatively low. They give
completeness to the new products or goods.
• Motors tyres, buttons, zippers, batteries, nuts and bolts,
machinery parts etc. are the example of such goods.

7. Fabricating Materials and parts cont..
Features of Fabricating materials and parts:-
i. Organ:- Fabricating materials and parts are important organ of
final product.
ii. Life:- Parts and materials have short life period and it also
depends on the life of final product.
iii. Per unit price:- per unit price of fabricating materials and parts
becomes relatively low
iv. Purchases quantities:- Fabricating materials and parts are
purchased in large quantities.
v. Standardized:- Such products are highly standardized.
vi. Direct purchased:- Such products are purchased directly.

8. Fabricating Materials and parts cont..
Marketing Consideration of Fabricating materials and parts
i. Duration of contract:- Duration of contract or agreement between buyer
and sellers of fabricating materials and parts should be long.
ii. Channel of distribution:- distribution channel of fabricating materials
and parts should be short and direct as far as possible.
iii. After sales service:- Service after sales is essential for such materials and
parts.
iv. Promotion:- Promotional activities for fabricating materials and parts
should be conducted
v. Branding:- Branding of such goods is not given importance but not
applicable for all.
vi. Packaging:- Packaging is not important for such types of product so
packaging is not necessary.
vii. Price competition:- marketing manager should analyze the competitors
price strategy when setting the price of such products.

10. 3.Installations
• Big industrial capital equipment and instruments are installations.
• Capital goods or installations are industrial products that support in the
buyers production or operations.
• They are the highly price of machinery items in the organization and the
entire production process depends on it Installation consists of major
purchases such as buildings like as factories, offices, fixed equipment like as
generators, press, large computer system, lift, etc.
• In the lack of these installation, raw materials cannot be converted into
finished goods. As these items need huge investment, a rational decision
should be taken to buy installation.

11. Installations cont..
• Feature of Installation:-
i. Per unit price:- Per unit price of installation is very high
ii. Life span:- Installation have very long life span
iii. Purchase quantity:- Very few items are purchased in
installation.
iv. Buying frequency:- Installation need not to be bought
frequently.
v. Importance:- Brand name or trade mark of installation is very
important.
vi. Problems:- No problems of supply.

12. Installations cont..
Marketing consideration of Installation
i. Channel of distribution:-Distribution channel of installation should be
direct and short as far as possible.
ii. Brand: - After producing capital items, they should be given brand name
and trade mark.
iii. Before and after sales service:- Before and after sales services should
provide by the sellers.
iv. Promotion:- Personal selling should be given preference rather than
advertising and other promotional activities.
v. Knowledge:- The supplier of installation should be efficient and
experienced and he/ she must have technical knowledge.
vi. Contract period:- Long term agreement should be applied.
vii. Profit margin:-High per unit profit margin strategy should be adopted.
viii.Price competition:- Industrial users gives priority to quality, after sales
service rather than price of . So there is no need of price competition.

13. 4. Accessory Equipment
• Accessory equipment is an industrial
product. It does not become a part of the finished goods, but
it plays an important role on the operation of organization.
• Accessory equipment includes portable factory equipment's
and tools such as hand tools, lifts, trucks, pick, liver, tables,
chairs, drawers, office equipment like computer, fax machine,
operating desk etc.
• Such equipments do not come into direct use in the
production process but helps in the production activities to
run the production functions smoothly.

14. Accessory Equipment cont…
Features of accessory equipment:
i. Regular help:- The accessory equipment help in production process
ii. Price:- Per unit price of accessory equipment become low than
installation.
iii. Purchase frequency:- Purchase frequency of accessory equipment
becomes medium
iv. Purchase quantity:- As demand of accessory equipment becomes
low and purchasing quantity is also low.
v. Time and effort:- less time and effort is needed for purchase in such
products.
vi. Capital Items:- It is not capital items like installation.
vii. Durability:- Accessory equipment have moderately long life span
but less than installation.

15. Accessory Equipment cont…
Marketing Consideration for accessory equipment
i. Distribution Channel:- Distribution channel of accessory equipment should be
long. it should be through intermediaries such as agents, wholesalers, and
retailers.
ii. Promotional tools:- Promotional activities should be conducted for such
equipment. Generally personal selling and advertising can be effective.
iii. Brand:- Trade Mark and brand of such equipment should be given more
importance.
iv. Price factors:-Marketers should give more emphasis on quality rather than price
of the product.
v. Contract period:- Medium contract period is needed for such product.
vi. Before and after sales service:- Pre and post sales service should be provided
according to buyer's needs.
vii. Packaging:- Customer gives more priority to quality, brand, warranty rather than
packaging of product. So it is not necessary to give more emphasis on packaging
of the product.

16. 5. Operating Suppliers:-
• This things which help to make production easy and regular are called
operating suppliers. It help to conduct business activities continuously.
• Operating suppliers are also called the convince goods.
• Stationary, fuel, oil chemicals, petroleum, coal, cloths, computer, etc. and
repair and maintenance items such as nails, paints, brushes etc.
Features of Operating suppliers:-
i. Life span:- Operating suppliers have short life span.
ii. Per unit price:- These products have low unit price.
iii. Purchase frequency:- Operating suppliers are frequently purchased items.
iv. Parts:- operating supplier cannot be a part of finished products.
v. Time and Effort:- Neither much effort nor time is needed to buy operating
suppliers.
vi. Knowledge:- Customers have full knowledge about such product.
vii. Supply Problems:- No supply problem of such product.

17. Operating Suppliers cont…
Marketing Consideration of operating suppliers
i. Wide distribution:- Intermediaries should be used to supply operating
suppliers.
ii. Brand:- Importance is not given to the brand and trademark of such goods.
iii. Contract:- The duration of the contract for supplying such goods should be
short.
iv. Promotion:- Promotional activities are not important for such goods.
v. Before and after sales service:- Before and after sales service is rarely
provided for such goods.
vi. Packaging:- Marketer should give more importance to quality of such
product rather than packaging
vii. Price competition:- Price strategy should be followed when setting price of
such product.

18. Service

19. Concept of service – Important Component of Product
• Service is one of the component of product, goods being another.
• Any activity or benefits that one party can offer to another that is essentially
intangible is called service product.
• Service is the combination of any activity, benefits that have some worth and
have ability to satisfy human needs that is primarily intangible, non
perishable and doesn't remain in ownership of party. Communication,
transport, banking, insurance, hotel, restaurant, advertisement, counseling
services etc. are the examples of service product. Such service cannot be
stored.
• Price and quality of service product cannot have uniformity.
• service can be classified into two types: person related service and
equipment related service.
• Teachers' service, doctors service, lawyer's service are person related service
whereas lifting machine service, vending machine service, television service,
computer service are equipment related service.