Industrial Marketing

Chapter 2 : Products, Services and Customers

+Types of Industrial Products

 Business Services

 Systems Marketing

+Industrial Customers

Chapter Summary

Industrial products are consumed as they are or with modifications to produce the final product. Industrial products are grouped into raw materials, processed materials, major equipment, accessory equipment, components and sub-assemblies, maintenance repair and operating (MRO) supplies, and services. Some companies provide services to other manufacturing and service organizations.

The services thus provided by external firms are called business services and the providers are called business service providers. Services are outsourced when they are too costly or require exceptional skills to handle. The intangible nature of services makes it difficult to measure them and both the client and the service provider could face problems during their contract.

Modern day industrial marketers have embarked upon a new form of marketing called systems marketing where a whole range of solutions are offered, rather than just a product. Industrial markets are quite different from the consumer market and exhibit a different kind of purchasing behavior. Some industrial customers purchase products for using them in producing the final product and they are called manufacturers.

Others sell them to other industries and institutions and they are known as distributors. Industrial customers can be broadly classified into three categories -- commercial enterprises, institutions, and government agencies. Commercial enterprises are further divided into users, original equipment manufacturers (OEMs), and dealers/distributors.

Industrial buying is a formal activity and involves a formal approach. This makes it tough for industrial marketers as they have to make their products appeal to most of the concerned people in the buying organization.

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