The important characteristics of industrial products are given below:
- A limited number of Buyers
When compared to customer and farming goods, the number of buyers of industrial goods is limited. Such buyers are also found in certain regions. For example, sugarcane is purchased by a few producers of sugar, but sugar, which is a consumer product, is purchased by a huge amount of people.
- A shorter channel of distribution
Because of a part number of buyers, the sale of industrial products is usually made with facilitate of shorter channels of distribution, mean, direct selling or one point channel. Industrial goods always emerge to be complex in view of their technological nature. It is not achievable for a layman to review the value of such goods. One has to have industrial information to be capable to evaluate them.
- Geographic awareness
Because of the position of industries at convinced points or regions, industrial markets are greatly determined, geographically.
- Derived Demand for Industrial goods
The demand for industrial products is derived from the demand for consumer products. For example, the demand for leather will be derived from the demand for shoes and other leather products in the market. The demand for industrial goods is a derived demand. i.e., it is influenced by the demand for the goods they assist to manufacture. Another example, the demand for a soft drink making plant will be indomitable by the demand for the soft drink.
- Reciprocal Buying
Some big companies from basic industries like oil, steel, rubber, and medicines resort to the practice of reciprocal buying. Purchase of consumer or agricultural goods can be undertaken by an individual. But in the case of industrial goods, a group or a team is commonly concerned in the buy. The team might consist of engineers, financial experts, and others.
- Inelastic demand
The demand for industrial goods is relatively inelastic, i.e., it is not affected by changes in price. As industrial goods are very extremely priced, each purchase involves a very high amount.
- Rational and not emotional buying
In the case of customer goods, the buying judgment is influenced by position, status and such other emotional factors. The buyer of industrial goods, on the other hand, makes an objective investigation of the usefulness of the product before making the purchase assessment.
- Heavy investment in Industrial goods
The production of manufacturing goods calls for profound capital investment. Most of the companies involved in the production of industrial goods raise capital by issuing shares and debentures and also by resorting to borrowing from financial institutions.
- After-sale service of Industrial goods
This is something which is always significant in the marketing of industrial goods. The seller must make certain standard refurbish and protection service to the buyer. It is significant to a positive extent in the market for customer goods, mainly in the case of durable goods. The reputation of the seller is essential in the case of industrial goods. The buyers would constantly desire to buy from reputed suppliers rather than from an unidentified resource.