Industrial products and services are the products or services acquired for the purpose of using them for the production of other products. The same product can either be consumer or industrial product. If yam
flour is bought for family consumption, it is a consumer product but if the same yam flour is bought by a restaurant it will become an industrial products. The same applies for computer systems.
According to Koltler & Keller (2007) industrial product can be classified in terms of how they enter the production process and their relative costliness. Accordingly there are three classifications: industrial
Materials and Parts
These are goods that enter the manufacturer’s product completely. This can also be subdivided into: (a) raw materials: these include farm products, such as wheat, cotton melon, corn or natural or nature endowed such as crude oil, iron ore, coal, precious stones
(b) Manufactured materials and parts: these can be components materials which are usually fabricated further.An example is a big iron which can be made to steel; yarn is woven into cloth; or component parts which enter the finished products with no further change in form e.g. when tyres are ixed into automobile.
Capital items
These are durable goods that promote development and management of the finished goods, The capital items include:
(a) Installations which consist plants (factories), offices and heavy equipment such as generators, elevators, mainframe computers etc.
(b) Equipment on the other hand include portable factory equipment and tools c.g. hand tools, lift trucks, office equipment such as personal computers, tables, chairs and printers. These types of equipment do not become part of a finished product.
Supplies and Business Services
These are short-term goods and services that facilitate in developing and managing the finished product. Supplies can either be:-
(a) maintenance and repair items which will include paint, nails, brooms and
(b) operating supplies which will include lubricants, gas coal and stationeries. Business services include maintenance and repair services such as cleaning, copier and computer repairs, while the business advisory services include legal, management consulting advertising and financial consultancy.
Can you briefly explain your understanding of industrial products? Industrial products and services are the products or services acquired for the purpose of using them for the production of other products.
Product Features and Characteristics
Generally, products have the following features and characteristics
Product Levels
One of the fundamental requirements for an organization that is planning for the introduction of new products into the market is the need to address five product levels. The five product levels according to Kotler & Keller 2007 are:-
Core benefit
This level addresses the core value the customers are willing to buy
Basic/Generic Product
This is the level where an organization has actually turned the core benefit into actual product.
It is the specific version of the product containing only those attributes or characteristics absolutely necessary for the product to function.
Expected Product
At this level, the organization takes into consideration a set of attributes and conditions buyers normally expect when purchasing this type of product. In other words, it is the set of attributes and characteristics that buyers normally expect and agree to when buying a product.
Augmented Product
At this level, the organization prepares to exceed customer expectations about the product and services that accompany the product.
It is a way of including in a product’s features that go beyond customer expectations and differentiate the product from that of competitors. Competition takes place at the augmented product level rather than at the core benefit level.
Competition is not between what organizations produce in their plants, rather the additional incentives added to the output in the form of appropriate packaging, services, advertising, customer advice, financing, delivery arrangements, warehousing, and other things that people value
Potential Product/Consumption System
It is a process of monitoring the way the user performs the tasks of getting and using products and related services. It also includes all the augmentations and transformations that a product might undergo in the future.
Product Mix Concept
The product mix is the assortment of all product lines and individual product offerings that the company sells. The right combination of product lines and products allow a firm to maximise sales opportunities within the limitation of its resources (Boone & Kurtz 2004).
Product Line
A product line is a group of brands that are closely related in terms of their functions and the benefits they provide e.g personal care is a product line and electrical goods is also a product line.
Product Width
Product width refers to the number of product lines a firm offers. From the table above, there are six distintive product lines i.e.Personal care, home care, nutrition, household equipment, electrical goods and transportation.
Product Depth
Refers to variations in each product that the firm markets in its mix. In other words, it is the number of different products that can be associated to each ……. what? Product line.
From the table above, personal care product line contains eight different product items i.e ‘venus’, ‘carex’, ‘premier’, ‘imperial leather’, ‘joy’, ‘robb’, ‘cussons’, and ‘stella pomade’.
Product Item
Refers to a distinct unit within a product line that is distinguishable by size, price, appearance, or some other attributes. The item is sometimes called a storekeeping unit, a product variant, or sub-variant.
The product mix dimension discussed above provides a company the opportunity to increase its offerings to the market in a number of ways. It is possible to increase product line. The PZ added electrical goods to its product line few years back as the company has previously been known for refrigerators and related products.
Similarly, it can increase the number of products in a product line. It can also add more product variants to an existing product, may be, in term of size or new flavour.
Can you explain the difference between product line and product items?
A product line is a group of brands that are closely related in terms of their functions and the benefits they provide e.g personal care is a product line and electrical goods is also a product line While a product item refers to a distinct unit within a product line that is distinguishable by size, price, appearance, or some other attributes.
Product Hierarchy
Kotler and Keller described product hierarchy as stretches from basic needs to particular items that satisfy those needs. They identified six levels of the product hierarchy:
Need Family
Itis the core need that underlies the existence of a product family e.g personal and home hygiene
Product Family
All the product classes that can satisfy a core need with reasonable effectiveness e.g soap and detergent
Product Class
A family of products having similar functions c.g. Toilet soap:- “Joy’, ‘Imperial leather’, ‘Premier’, and Carex.
Product line: A group of products with closely related functions. It is also a group of products within a product class that are closely related because they perform a similar function, are sold to the same consumer groups, are marketed through the same outlets or channels, or fall within given price ranges e.g home care or personal care bath
Product Type
Product within a line having similar form e.g soap
Product item: A name representing a product or line e.g ‘Joy’, or ‘imperial leather
Summary
1. Product here is defined as anything that can satisfy a need or fill a want.
2. The session further identified two broad classifications of products namely the consumer and industrial/business products.
3. Different types of products under each category were discussed.
4. Finally product mix concepts were discussed using one Nigerian manufacturing company’s products as example.