INDUSTRIAL PRODUCTS

Demand for industrial products

 INTRODUCTION
Products which are used
as an input for other
products

Raw materials, engines,

lubricants, machines,
tools etc.

Industrial products are

meant for non personal
and business use for
producing other products.
 Demand for industrial products

INTRODUCTION
3

• Demand for Industrial marketing develops from the

ultimate demand for consumer goods and services.
• Demand is derived from the choice and likes of
consumers.

TYPES OF DEMAND IN INDUSTRIAL MARKETING

• There are principally three types of demands in
industrial marketing. They are:
• Derived Demand.
• Joint Demand.
•Price sensitivity
 DETAIL….

DERIVED DEMAND
• It is the single most important force in the marketing of
industrial
goods and services.
• demonstrates how changing customer preferences or a
changing
economy affects business-to-business markets.
• determines whether a need for related products and raw
materials
increases or decreases
JOINT DEMAND
• when you need two goods to go together
• occurs when demand for two goods is interdependent.
• E.g. it is no good having a printer without the ink to go
with it. Similarly ink cartridges are no use without a
printer. Another example, could be a razor and razor
blades.
Price Sensitivity

Most industrial goods are price inelastic in demand since

most of the raw materials and intermediaries account for only
a small portion of the cost
• Even a significant change in the price of capital goods
may not affect its demand because demand for them is
derived demand based on products made from them
• Sometimes a significant reduction in price of
domestic capital goods may help increase their
demand at the expense of second hand imported
capital goods
• While the demand for an industrial good may be
price inelastic, the demand for the product of a
particular firm may be price elastic.
• In many instances, reverse price elasticity is also
observed in respect of demand for industrial products.
This reverse price elasticity is however a short run
phenomenon.
• Several industrial products are characterised by cross
elasticity of demand which implies that the demand of
a product is affected by the price of its substitutes.
TYPES OF ORGANISATIONAL CUSTOMERS

Nonprofit and
Commercial Government
Not-for-Profit
Enterprises Units
Organizations
Industrial Churches,
Distributors 85,000 local, hospitals,
state, and federal colleges,
Value-Added government units nursing homes,
Resellers
etc.
Original
Equipment
Manufacturers
Users or End Users
 Types of Organizational Customers

Nonprofit and
Commercial Government
Not-for-Profit
Enterprises Units
Organizations
Industrial Churches,
Distributors 85,000 local,
state, and federal hospitals,
Value-Added government units colleges,
Resellers nursing homes,
etc.
Original
Equipment
Manufacturers
Users or End Users 9