Characteristics and Strategies of Industrial Products
The demand for industrial goods is derived from the demand for final goods which they are used to produce. The higher the demand for the final item, the higher will be the demand for the industrial goods and vice versa.
The demand for industrial goods is mostly inelastic; that is, the amount of items bought for an industrial product remains, essentially, the same regardless of the price. This is because most items are not made of one single product, but a combination of products.
For example, a car is made of the body, tires, radio, air conditioners, lights, and so on. If the price of the items is increased, they will still need the same number for each car. Although if the price falls, they may buy more stock in anticipation of a rise in price in the future.
Most industrial goods have joint demands with other industrial items. As mentioned above, most finished goods are a combination of very many products, and an increase in the demand for one item will lead to an increase in the demand for the other product.
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Strategies for Industrial Products
As mentioned to you in the last unit, industrial products are generally subject to greater standardization, as against certain consumer products which require frequent changes in fashion and style.
Advertising, normally, is an important promotional tool for consumer products, but may not be so in the case of industrial products. Personal selling and after-sales service are generally more important for industrial products.
Industrial products generally involve high-value purchases and this involves competitive bidding based on price competition. Selling is done based on quality or tangible attributes.
In conclusion, a product is the key marketing mix variable around which all the other marketing mix variables revolve. It cannot be diverted from other marketing mix variables, because all of them contribute to forming the images of the product from the point of view of the buyers.
These images determine the values and satisfactions expected from a given product and how much the buyers will offer for it. It is therefore important for manufacturers and marketers to understand what a product means to consumers and their expectations from that product.
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