Briefly define and describe each of the categories of business goods and services. Give two specific examples of goods or services that fit into each category.

Question

What will be an ideal response?

Answer 1

MAJOR EQUIPMENT (or installations) consists of capital goods that are depreciated over time. These goods are often custom designed and therefore often sold by personal selling and distributed directly. Text examples include large machinery, mainframe computers, blast furnaces, generators, airplanes, and buildings.

ACCESSORY EQUIPMENT is shorter-lived than major equipment and is often charged as an expense in the year it is purchased. Advertising and local distributors play a role in the sale of accessory equipment. Text examples include portable power tools, word processors, and fax machines.

RAW MATERIALS are unprocessed extractive or agricultural products that are used as "ingredients" in other finished goods. Personal selling, direct channels, and price inflexibility characterize the marketing of raw materials. Text examples include mineral ore, timber, wheat, and fish.

COMPONENT PARTS are either finished items ready for assembly or products that need little processing to become part of another product. Component parts sometimes retain their identity, often need replacement in the final product, and are marketed through OEM and replacement markets. Text examples include spark plugs, motors, and automobile tires.

PROCESSED MATERIALS are used directly in the manufacturing of other products and do not retain their identity in the final product. Text examples include sheet metal, plastics, corn syrup, lumber, and specialty steel. The materials may be custom-processed, so price and service are important in vendor selection.

SUPPLIES (or MRO items) are consumable items that are not part of the final product. They are relatively inexpensive and have a short life. Text examples include lubricants, cleaning supplies, pencils, and paper.

BUSINESS SERVICES are expense items that are not part of the final product. When it is cost-effective, firms often retain outside companies to provide services. Text examples include janitorial, advertising, legal, consulting, research, and maintenance services.