What Are Industrial Commodities?

Industrial Products are products that are used for processing, production, or business operations after purchase. The difference between consumer goods and industrial goods lies in their purpose of purchase. If a consumer buys a lawn mower to use around his house, the lawn mower is a consumer product. If this person buys a lawnmower for the business of environmental management, then the lawnmower is an industrial product. ^[1]

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From the perspective of production purpose, industrial products can be divided into two categories: the first type of industry

The most important factor influencing the choice of marketing models for industrial products companies is customers. For customers, the most important factor that influences is the value weight of the company's products at the customers' products. Therefore, value weight is the key to the decision of marketing models. There are many factors that affect the weight. After induction, there are mainly two following:

(1) Cost of customers

The purpose of buying industrial products is to invest in the reproduction process.

Traditional model of industrial products

Narrow marketing refers to the process of products from manufacturing to the hands of consumers, and broad marketing refers to market adjustment.

Industrial price index

A cyclic process of researching, developing products, manufacturing products, promoting and selling products. The concept of industrial product marketing is a broad marketing concept. In the traditional industrial product marketing system, suppliers provide a single product to all manufacturers using a certain product, as shown in the figure on the right.

In the early stage of the development of the domestic market economy, market development was very immature. Most industrial product suppliers used this method for sales. They no longer subdivided their products and services, or simply subdivided according to the level of customers. However, because there are relatively few suppliers, this marketing model has already achieved higher profits.

New model of industrial products

(1) Proposed new model

Industry-based industrial product marketing management is a new type of industrial product marketing model. It studies the characteristics and needs of customers in the industry, and launches applicable products and services for different industries, through promotion, pricing, channel management, public relations, etc. A series of marketing mixes for industrial product sales.

The innovation of the new model is that it pays attention to the customer's subtle needs and provides applicable products and services for the customer's industry, as shown on the right.

(2) The main background of the proposed new model-changes in the market environment

American industrial product marketing master Thomas N. Igram (2004) believes that as the competition in the business environment continues to intensify and changes more rapidly, today's business organizations are undergoing profound changes. The global spread of technology makes competition more intense and has a stronger driving force. The acceleration of change has shattered the once large market into smaller and more suitable markets. In these smaller and more suitable markets, customers

Traditional industrial product marketing model

Households have more knowledge, more demanding requirements, and higher expectations. Correspondingly, traditional buying activities are rapidly changing.

(3) Changes and benefits brought by the new model

a. The sales promotion of enterprise products depends more on the brand image and reputation

The ultimate goal of industrial product sales is to expand sales and increase market share. The realization of this goal depends on two important factors, one is the brand and the other is the word of mouth. The two seem to be independent, but they are mutually reinforcing. The formation of brand and word of mouth ultimately depends on products and services.

The clustered development of the industry is the trend of future industrial development. The trend of industrial clustering has brought many enterprises in the same industry together geographically, which has greatly enhanced the speed and efficiency of information transmission, and the horizontal transparency between industries has become increasingly high. The quality and service of an industrial product brand in the same industry often has formed a unique image or positioning within the industry over time. Because the new model focuses on the industry, many strategies are made for the industry, which is very conducive to the formation of word of mouth and brand image.

b. The marketing model of the new model enables SMEs to excel in more detailed market segments:

In his book "Competitive Advantage" (1985), Michael Porter argues that there are two basic models of companies participating in competition-low cost and differentiation. As the phenomenon of product homogeneity becomes more and more serious, for small and medium-sized enterprises, because there is no scale effect, the so-called low cost often means low profit margins. However, if these small and medium-sized enterprises adopt a new marketing model, that is, they give up their efforts in the direction of low cost and move to differentiation, subdivide the industries to which the products are applicable, and focus on a more segmented market, they will The market segment is very well done, because large companies tend to disdain small market segments, and the market responds slowly. If small companies can seize this opportunity, respond quickly to the terminal industry, and provide products adapted to the industry, they must Will quickly establish a reputation and occupy this market segment.

7Ps Portfolio: An industrial product marketing model based on industry research-The most important of the 7Ps portfolio is the introduction of products and services that are applicable to the industry, but only applicable products are not enough. It must rely on a series of marketing portfolios. 7Ps marketing mix recommendations and comparisons of industrial product marketing models based on industry research:

Serial number	Traditional approach	New theoretical approach
1.Product (Product)	Emphasis on commonality: develop a universal product for all application industries	Satisfaction of personalized needs: Emphasis on in-depth and meticulous market research and analysis, mining subtle differences between customers in different industries, and providing products and services that can be quickly combined for different customer segments
2.Production (production)	Production of general-purpose products, rarely making accessories for customers according to the industry	Produced the main model, and selected the appropriate parts or accessories according to the different requirements of market segments in some places that needed to be personalized
3.Price (price)	Because there is only one product, the product can only be sold for its own products. Regardless of the profit margin of the target market, the pricing is relatively rigid.	Pricing according to target market segments is aimed at the characteristics of different application groups. Because the characteristics of profits between different industries have been considered before the product is launched, the cost or price of machinery or equipment for different industries will be different. However, prices in the same industry will be relatively transparent to avoid conflicts
4.Promotion	Product-centric, promotion activities are carried out around products, such as exhibitions, product introductions, promotion conferences for all application industries	Focusing on the application industry (customer market segmentation), the promotion activities are carried out around the customer industry, such as product sample design for the application industry, product exhibitions for the application industry, customer process operation training sessions, etc
5.Place (channel)	Divide sales area by salesperson	Divide the sales scope of the salesperson according to the application industry. Emphasize the knowledge of business personnel in a certain application industry technology
6.Power of relation (public relations)	PR is not targeted	Public relations for the industry, for example, for industry associations, etc., strive for enterprises led by association leaders (often industry leaders) to take the lead in using products, set benchmarking projects, and play a role
7.Personnel fittings and service (personalized fittings and services)	Focusing on products, only providing accessories and services based on the commonality of the products, without paying attention to the individual needs of customers	Focusing on the customer's industry, such as setting up a parts library for the customer's industry, providing dedicated accessories and services to quickly respond to customer needs, and customer maintenance and repair training is also carried out for the industry