Definition of 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 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.
Bulk Purchase
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.
Purpose
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.
Few Buyers
Industrial buyers are few but large. The industrial market has few buyers who buy their required products or services in large quantities.
Professional Buying
Industrial buying is mostly technical and based mostly on reasons. Professional employees are hired or appointed to buy such industrial goods.
Inelastic Demand
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.
Related: What is Buyer Behavior?
Types of Industrial Products
There are six main types of industrial goods which are mentioned below with examples.
Raw Materials
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 that need to be processed to be finished goods. Take an example, to make a final product sugar, sugarcane is needed to be processed.
Capital Goods
These are the goods fundamental for business organizations to smoothly run the production process. These include products like buildings, equipment, machines, land, etc.
For example, you must have a machine to process the sugarcane to produce the sugar. Without these capital products industries will not be able to process raw materials and produce final products.
Related: Types of Products
Essential Equipment
As the name suggests, essential equipment – is the industrial products needed to run the operations of the industry 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
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 to complete a bike, cycle, car, or other automobiles.
Also Read: Difference Between Industrial and Consumer Products
Accessory Products
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.
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.
Also Read: What is an Unsought Product?
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 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.
Related: What are Core Products?
Similarly, for 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, you must 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.
- Crude oil
- Timber
- Iron ore
- Cotton
- Industrial robots
- Factory buildings
- Power generators
- Heavy-duty cranes
- CNC machines
- Commercial printers
- Delivery trucks
- Industrial-grade computers
- Car engines
- Electrical wiring
- Circuit boards
- Bearings
- Hydraulic trolleys
- Welding tools
- Storage racks
- Conveyors
These examples demonstrate the diversity of industrial products, which play a vital role in the production processes of various industries.
Read Next: What is Packaging?
Sajan Kushmi is a content writer with more than 4 years of experience. He holds BIM Degree. He write on the topics related to Management, Marketing, and Entrepreneurship.
Thank you for informing us that it counts as an industrial product if they are purchased to be processed in industries before they are used by end consumers.
I appreciate your explanation.
Thanks a lot