Derived demand:

Demand for an industrial product is a derived demand because it is based on the ultimate demand for the consumer product in which that industrial product is used. Thus the demand for the grinding mills in Kenya depends on the consumer demands for maize, millet or wimbi used for making porridge or bread (ugali)

If an industrial products marketer wants to estimate the demand for his products, he or she must be familiar with how they are used. The producer/manufacturer of the industrial products can sometimes decided to encourage the sale of the buyer's products. For example, Pembe Flour Mills Ltd. may advertise to urge the consumers to buy their brand called Pembe from Ongata Rongai Supermarket. The increase in consumer demand for Pembe flour at the supermarket will trigger an increase in the derived demand for the grinding mills used by Pembe Mills Ltd.