Volatility of Derived Demand in Industrial Markets and Its Management Implications

Abstract

Despite its importance, the volatility of derived demand in industrial markets has not been studied by marketing scholars. Here we present a description of how fluctuations in demand for fossil fuels during recent years have caused precipitous changes in demand for turbomachinery equipment used to produce the fuels. This volatility in demand for fossil fuel production equipment is viewed both from the perspective of industry and that of five individual companies. Finally, a number of marketing strategies that can serve to dampen otherwise volatile sales performance are proposed for industrial firms.