What are industrial products? How are they different from consumer products? Explain.

Monjur Alahi

What are industrial products? How are they different from consumer products? Explain.


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Salim Ahmed Kawsar

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Industrial products refer to those products that are used as inputs for the production of other goods. 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. As against this, consumer products refer to those products that are used by the ultimate customers for their personal consumption purposes. For example, toothpaste, edible oil, furniture, etc. are consumer goods. The following points highlight the difference between industrial products and consumer products.

Basis of Difference Industrial Products Consumer Products
Number of Customers The number of customers is limited. For instance, oil seeds (industrial product) are used mostly by the producers of mustard oil. The number of customers is higher. For instance, mustard oil (consumer product) is consumed by many people.
Channel of Distribution Such products require shorter channels of distribution such as direct selling or one level channel. Such products require comparatively longer channels before they reach the final consumer. However, channel of distribution for perishable consumer products is small.
Location Industrial products remain concentrated only in those areas where the industries producing these goods are located. Consumer products readily and conveniently available.
Demand Demand for industrial product is a derived demand based on the demand for consumer products. Demand of consumer product is not a derived demand rather sets the basis for demand for industrial products.
Role of Technical Features in Decision Making Technical features play an important role while purchasing these products Such products do not involve any technical complexities in manufacturing. Thereby, technical features does not have much role in the decision making while purchasing.
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Salim Ahmed Kawsar

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Industrial products are those products, which are used as inputs in providing other products e.g., raw material, engines, tools, lubricants etc.

Basis Consumer product Industrial product
Buyer Consumer is the buyer Industrial units and the processors are the buyers
Motive It is purchased for personal consumption It is bought and used for making other products
Number of buyers Number of buyers of consumer products is large Number of buyers is limited in case of industrial product

 

The difference between consumer products and industrial products is based on their ultimate use and nature of purchases.
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