Business Products
Business products are sold to other businesses, as opposed to convenience, shopping, and specialty products, which are sold to consumers.
LEARNING OBJECTIVES
Distinguish between the different types of business products
KEY TAKEAWAYS
Key Points
- Business products are marketed differently than convenience, shopping and specialty products, due to their different nature as well as the different nature of the prospective buyers.
- A useful way to divide business products is into farm products and manufactured products, as they are marketed differently.
- There are different types of manufactured products, such as semi-manufactured products, parts, raw materials, and machinery.
Key Terms
- business products: Products that are sold to other businesses as opposed to end consumers, and used to produce other products.
Business products represent a very important product category, and in the case of some manufacturers, they are the only product sold. These are goods that are sold to other businesses, and used to produce other goods. Industrial products can either be categorized from the perspective of the producer and how they shop for the product, or from the perspective of the manufacturer, how they are produced and how much they cost. The latter criterium offers a more insightful classification for industrial products.
Manufactured products are those that have undergone some processing. The demands for manufactured industrial goods are usually derived from the demands for ultimate consumer goods. There are a number of specific types of manufactured industrial goods. Semi-manufactured goods are raw materials that have received some processing but require some more before they are useful to the purchaser. Lumber and crude oil are examples of these types of products. Since these products tend to be standardized, there is a strong emphasis on price and vendor reliability.
Business Product: Lumber is an example of a business product.
Parts are manufactured items that are ready to be incorporated into other products. For instance, the motors that go into lawn mowers and steering wheels on new cars are carefully assembled when they arrive at the manufacturing plant. Since products such as these are usually ordered well in advance and in large quantities, price and service are the two most important marketing considerations.
Process machinery (sometimes called “installations”) refers to major pieces of equipment used in the manufacture of other goods. This category would include boilers, lathes, blast furnaces, elevators, and conveyor systems. The marketing process incorporates the efforts of a professional sales force, supported by engineers, technicians, and personalized service.
Equipment is made up of portable factory equipment and office equipment (e.g., computers, copier machines). Although these products do not contribute directly to the physical product, they do aid in the production process. These products may be sold directly from the manufacturer to the user, or a middleman can be used in geographically dispersed markets. The marketing strategy employs a wide range of activities, including product quality and features, price, service vendor deals, and promotion.
Supplies and service are consumed in conjunction with making the product. Supplies include paper, pencils, fuel, oil, brooms, soap, etc. These products are normally purchased as convenience products with a minimum of effort and evaluation. Business services include maintenance, repairs, and advisory. Because the need for services tends to be unpredictable, they are often contracted for a relatively long period of time.