Business Products:
Used to manufacture or construct other products or used in daily business operation
· Used in daily business operation
Although consumer products are for private use, business products are for the corporate world. They are used to manufacture or construct other products or are used in the daily operation of an organization.
Since product purchases are based on business needs and not on consumer behavior, they are classified by how they will be used. There are five categories of business products.
Business Products Categories:
· Installations
The first business product category is installations. Expensive products that are rarely purchased are grouped in this segment. This classification is comparable to the consumer specialty product category and includes an extended decision-making process.
Cost is generally not a primary consideration for organizations buying installations. Company leaders typically negotiate for functional characteristics, such as customization, efficiency, performance, and technical support.
Since installations are often designed especially for a business, they are usually marketed directly to an organization. Examples of installations include airplanes, computer networks, buildings, and manufacturing equipment.
· Accessories
The second business category, accessories, refers to products that are less expensive than installations, but which still require an investment of time and research prior to purchasing. This classification includes products that are purchased more frequently than installation and lasts for shorter period.
Although features and service are high priorities when buying accessories, price is typically the dominant buying influence. Examples of accessories include computers, copy machines, and printers.
· Raw materials
The next category is raw materials. Items such as corn, sugar, lumber, and coal, are unrefined products used to create a final product.
To ensure consistent quality, most raw materials are evaluated and graded according to criteria set by the industry. Since raw materials usually are priced according to market standards, company leaders generally base their buying decisions on a vendor's ability to deliver the quality and quantity of raw materials desired.
· Component parts
The fourth category that divides business products is component parts. Products in this category are similar to raw materials in that they are used to create a final product. However, unlike raw materials, component parts are finished products that are used to produce a final product.
For example, a memory board and a disc player are component parts of a computer. A battery, headlight, and spark plug are component parts of an automobile. Buying decisions are generally influenced by a vendor's ability to provide a consistent supply of quality components.
Used to manufacture or construct other products or used in daily business operation
· Used in daily business operation
Although consumer products are for private use, business products are for the corporate world. They are used to manufacture or construct other products or are used in the daily operation of an organization.
Since product purchases are based on business needs and not on consumer behavior, they are classified by how they will be used. There are five categories of business products.
Business Products Categories:
· Installations
The first business product category is installations. Expensive products that are rarely purchased are grouped in this segment. This classification is comparable to the consumer specialty product category and includes an extended decision-making process.
Cost is generally not a primary consideration for organizations buying installations. Company leaders typically negotiate for functional characteristics, such as customization, efficiency, performance, and technical support.
Since installations are often designed especially for a business, they are usually marketed directly to an organization. Examples of installations include airplanes, computer networks, buildings, and manufacturing equipment.
· Accessories
The second business category, accessories, refers to products that are less expensive than installations, but which still require an investment of time and research prior to purchasing. This classification includes products that are purchased more frequently than installation and lasts for shorter period.
Although features and service are high priorities when buying accessories, price is typically the dominant buying influence. Examples of accessories include computers, copy machines, and printers.
· Raw materials
The next category is raw materials. Items such as corn, sugar, lumber, and coal, are unrefined products used to create a final product.
To ensure consistent quality, most raw materials are evaluated and graded according to criteria set by the industry. Since raw materials usually are priced according to market standards, company leaders generally base their buying decisions on a vendor's ability to deliver the quality and quantity of raw materials desired.
· Component parts
The fourth category that divides business products is component parts. Products in this category are similar to raw materials in that they are used to create a final product. However, unlike raw materials, component parts are finished products that are used to produce a final product.
For example, a memory board and a disc player are component parts of a computer. A battery, headlight, and spark plug are component parts of an automobile. Buying decisions are generally influenced by a vendor's ability to provide a consistent supply of quality components.