g o o d s and s e r v i c e s

Consumer Goods Consumer Services Industrial Goods Industrial Services Industrial = Business

Consumer Goods Consumer Services Industrial Goods Industrial Services Consumer Goods and Services - are for consumers, the final customer Industrial Goods and Services - are used in making consumer goods and services Industrial = Business

Industrial Goods Industrial Services

Industrial Market / BUSINESS PRODUCTS “Individuals and organizations that acquire goods and services to be used, directly or indirectly, in the production of other goods and services or to be resold.” Beckman TEXT “People who buy stuff to make other things.” W.T.G.R.

3 types of industrial markets - producers and manufacturers - trade industries (wholesalers and retailers) - governments

3 types of industrial markets producers and manufacturers Those who transform goods and services, through production, into other goods and services manufacturing firms (eg. Auto parts, computers) farms mining and forest industries construction and building companies service companies (trucking, air, rail) public utilities, banks, insurance companies Not in the text

3 types of industrial markets Trade Industries (gong ye maoyi) Organizations such as wholesalers and retailers that buy things for resale to customers examples - lumber dealers, fabric wholesalers, building materials metal and electrical products

3 types of industrial markets Governments (zheng fu) Federal Ministries and Crown Corporations, Provincial Ministeries and Crown Corporations, Municipal governments and agencies examples: Dept. of Defense buying trucks from GM, Dept. of Revenue buying computers, Royal Canadian Mint buying paper and Provincial agencies buy services such as snow clearance, cellular phone service …... Not in the text

Industrial Market Demand 1. Derived Demand means the demand is derived (or caused by, or linked to) demand for a consumer item - demand for lithium is “derived” from the demand for lithium batteries, which is in turn “derived” from the demand for cell phones - demand for wood pulp is derived from the demand for paper, which is derived from the increase in people printing on paper

Industrial Market Demand 2. Joint Demand means the demand is related to the demand for other industrial things eg. The demand for printer cartridges is linked to the demand for printer paper for services, the demand for Netscape 4.05 - is linked to the demand for an ISP account Not in the text

Classifying Industrial Products 1. Installations - major assets, factories, heavy machinery 2. Accessory Equipment - used in production - short-lived items eg. tools 3. Raw Materials 4. Component Parts and Materials - finished units which, when assembled, make the complete product 5. Maintenance, Supplies (MRO Items) - maintenance,- cleaning fluids 6. Professional Services - accounting firms, law firms

Categories of Industrial Products Capital Items things that last a long time, and become less and less in value over time 2. Expense Items - things that are used within a short period of time - some types of raw materials, office supplies, materials in production

Categories of Industrial Products 1. Capital Items ex - car - office building - machinery and equipment 2. Expense Items ex - gas for the car - washing the windows for the building - parts for the machinery

Categories of Industrial Products Depreciation The accounting concept for charging a portion of the cost of a capital item as a deduction against the company’s revenue - eg. 486 DX2 Office computer bought in 1995 - deduct $750 in 1995 - deduct $750 in 1996 etc. Not in the text

Various Classes of Consumer and Industrial Goods and Services