Derived demand – The demand for industrial goods is driven by the
demand for consumer goods. The boom in the construction industry is
driving the demand for cement and steel.
Inelastic demand – Demand for many business goods and services is inelastic
- that is not much affected by price changes. For example the demand for
batteries is not going to change much with price as the demand of batteries
is driven by the demand for automobiles.
Fluctuating demand – A small increase in the consumer demand can give rise
to a significantly large increase in industrial demand – this effect is called the
acceleration effect. Similarly a 10% fall in consumer demand can cause a
significant decrease of the industrial demand.
Geographically concentrated buyers – there is clustering to rationalize
production – software in Bangalore; hosiery in Coimbatore; auto-ancillaries
in Pune and Nasik etc.
10.Direct Purchasing – Firms buy direct mostly rather than thru intermediaries