What are industrial products? How are they different from consumer products? Explain.
Answers
SOLUTION :
INDUSTRIAL PRODUCTS :
These products are purchased for use in the production of other goods. Raw materials, components and machinery are all industrial products.
Difference between industrial and consumer products :
INDUSTRIAL PRODUCTS :
(a) These products are used for further production of other goods.
(b) Number of buyers of industrial goods are limited.
(c)Decisions of buyers are influenced by technical specification and goodwill.
(d) These products have derived demand.
CONSUMER PRODUCTS :
(a)These products are used for final consumption by the direct consumers.
(b) The buyers of consumer goods are many in number.
(c)Decisions of buyers are influenced by advertising and various sales promotional schemes.
(d) This product have direct demand.
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Industrial Product:-
These are those products which are used as inputs for producing other products.
Such goods are not meant for final consumption rather they are used as raw material and inputs by the manufacturers for the production of consumer goods. For example, machines, tools etc. are industrial products.
Difference between industrial products and consumer product:-
Industrial Product:-
The number of customers is limited. For instance, oil seeds (industrial product) are used mostly by the producers of mustard oil.
Such products require shorter channels of distribution such as direct selling or one level channel.
Technical features play an important role while purchasing these products.
Consumer Products:-
The number of customers is higher. For instance, mustard oil (consumer product) is consumed by many people.
Consumer products readily and conveniently available.
Demand of consumer product is not a derived demand rather sets the basis for demand for industrial products.