What is an Industrial Product? Goods intended for industrial use, i.e. creating other goods & services –Materials & parts (enter manufacturer’s product completely, e.g. oil, lumber, tires, small motors) –Capital Items (long lasting, facilitate developing finished product, e.g. buildings, generators, lift trucks) –Supplies & business services (short lasting, e.g. pens, brooms, maintenance & repair services)

Industrial Products Require Less Adaptation –Industrial goods share similar buying motives worldwide Industrial Products main U.S. export

Major Categories U.S. Exports Category Percentage Services Total 28.5 Travel (hotels, etc) 8.7 Transportation (fares, freight, and port services) 7.5 Commercial, professional, and technical services (advertising, accounting, legal, construction, engineering) 1.7 Financial services (banking and insurance) 1.5 Education and training services (most foreign student tuition) 1.0 Entertainment (movies, books, records) 0.8 Other categories (telecommunications, information, health care) 7.3 Irwin/McGraw-Hill 13-2 Source: U.S. Department of Commerce, http://

Major Categories U.S. Exports 13-3 Irwin/McGraw-Hill Source: U.S. Department of Commerce, http:// Category Percentage Merchandise Total 71.5 Food, feeds, and beverages (wheat, fruit, meat) 4.8 Industrial supplies (crude oil, plastics, chemicals, metals) 15.1 Capital goods (construction equipment, aircraft, computers telecommunication) 32.1 Automotive vehicles, engines, and part 7.7 Consumer goods (pharmaceuticals, tobacco, toys, clothing) 8.2 Other categories 3.6

What is a Service? “Any act that one party can offer to another that is essentially intangible and does not result in the ownership of anything. May or may not be tied to a physical product”

Services Adaptation important because it involves people to people contact

E.g. McDonald’s requires Polish employees to smile whenever they interact with customer Students in Japan listen to lectures, take notes, and ask questions only after class