Marketers have divided products into two categories based on the types of customers that purchase them. Types of these products are; consumer goods and industrial goods. Consumer goods are items purchased for personal consumption. However, types of industrial goods are bought for further processing in a business operation rather than for personal usage.
Three types of industrial goods
The primary distinction between a consumer good and an industrial good is the purpose for which it is purchased. Even the same object might be labeled as both consumer and industrial depending on why a buyer is purchasing it. If you buy a vehicle for personal use, it is a consumer good; however, if you buy it for use in your commercial organization, it is an industrial good. Materials and parts, capital items, and supplies are the three types of industrial goods.
Materials and parts
Raw Materials : Natural types of industrial goods
Raw materials are the base group of industrial goods. Natural and agriculture -farm- products are the most common raw materials. Small producers mostly produce agriculture products such as wheat, cotton, fruits, vegetables, and cattle. They sell their goods through distribution channels. These farm goods are processed and sold by the intermediaries. Natural industrial products, on the other hand, have a bigger volume but a lower unit price because manufacturing costs are split by the amount produced. These types of industrial goods naturally exist on the earth and have to be extracted.
Natural goods are the high-volume types of industrial goods
Moreover, natural industrial goods require a lot of transportation. Natural industrial goods like petroleum, iron and copper ore, etc have to be transported from one corner of the world to another. They are produced by few but large scale producers. Leading natural product producers of the world market their products to industrial buyers directly.
Manufactured materials and parts
Manufactured materials and parts are the most common group of the types of industrial goods. Component materials and parts are the most common products of manufactured materials and parts classification. Component materials such as copper or cotton are further processed, such as cotton being woven into clothes for sale.
Manufactured parts, on the other hand, do not require further processing and are included into the finished product. For example, a tire purchased by Mercedes becomes a part of one of their vehicles. The majority of manufactured materials and parts are sold directly to industrial users.
In terms of selling manufactured materials and parts, the most important factors are pricing and service. In such a scenario, branding and advertising activities become less crucial.
Capital items
Capital items are the major group of the types of industrial goods that support the buyer’s production operations or business activities. This category primarily includes installations and accessory equipment. Buildings and fixed equipment are examples of installations. Buildings such as factories, offices, and warehouses are classified as installations, as are stationary equipment such as lifts, generators, and so on.
Installations are among the most major purchases undertaken by a business, thus there may be a substantial decision-making process before the final purchase. Because the purchase of installations requires a significant expenditure, corporations or purchasers assess a number of criteria before making the purchase.
The most expensive types of industrial goods
Furthermore, purchasers acquire them straight from the producers. Portable factory equipment, tools, and office equipment have a shorter life cycle than installations. They do not form a part of the finished product, but rather aid in the manufacturing process.
Vendors of accessory equipment rely on intermediates such as distributors and wholesalers to sell their items. It is mostly due to the fact that, while clients are geographically separated, they are numerous, and purchase amounts are often small.
Industrial supplies
Industrial supplies are one of the types of industrial goods that do not enter the product at all. Supplies include operating supplies as well as repair and maintenance items. In some ways, supplies are similar to convenience items (consumer goods), which implies that their acquisition does not necessitate a great deal of thought and comparison on the part of the buyer. Operating supplies such as coal, printing paper, pencils, or repair and maintenance products such as nails and brooms do not necessitate a significant amount of purchasing effort on the part of the buyer.
