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The Industrial Gas Market

The industrial gas market consists of the segments: Cutting & Welding, Process, Medical and Retail

Market and Customer Segments

Well defined customer categories or application areas

Direct Customer

Customer being individually treated and regularly visited by an industrial gas salesperson, defined on the bases of actual and potential sales value contribution

Retail Customer

Small industrial gas user, that is not being visited regularly by an industrial gas salesperson – served via a sales outlet

Marketing/ Segment Profile

The Industrial Gas Company’s brand and image communicated to the different customer segments

Market Position

The industrial gas company’s strength in relation to the competitors in a defined market area and customer segment – expressed in market share percentage

Market Control

Protection of existing market position by actively managing and controling the defined market by:

  • Clearly define and follow a local market strategy
  • Make decisions based upon efficient Market Information Systems covering:
    • Customers
    • Segments
    • Competitors
    • Profitability
  • Control the total gas distribution chain from production to end-user, avoid re-seller strategies

Distribution Channels

The industrial gas supply to the customers, either direct from an industrial gas factory/filling station or indirect via a sales outlet


All the different sales outlets in a defined area

Sales Outlets

Shops selling industrial gas related products, i.e. Industrial gas stores, depots, distributors, franchisers, resellers

Cylinder Rent

The compensation the industrial gas company receives for putting gas cylinders at the customer’s disposal. It can take several forms:

  • Daily Rent – A defined rental fee per cylinder and day
  • Demurrage – Rent compensation calculated on number of cylinders at the customers at month’s end, with a reduction for returned cylinders. Demurrage thus includes a rent-free period
  • Slow-Rotation Charge – Additional rent for cylinders that have not been returned to the industrial gas company within a defined period of time, e.g. three or six months
  • Advance Rent – Pre-paid cylinder rent, normally for one year
  • Cylinder certificate/Contract/Lease – As advance rent but of a longer period, often 3 years
  • Filling Charge – Special fee for filling and handling of customer-owned cylinders
  • Back-up Cylinders – All Industrial Gas Company cylinders that are neither at customers nor out of service, i.e. at filling, on platforms or on trucks

Other Services

  • Invoice Charge – Separate fee applied in high inflation countries – to cover costs of contracted customer credits, often calculated as a percentage of the invoice amount, for overdue payments an interested is normally charged
  • Cylinder Transport Charge – Payment for distribution of cylinders to customers, normally calculated with a fixed charge per delivery and a variable charge per cylinder. The fixed charge is often called drop charge, stop charge or delivery charge


  • Industrial Gas Company Store – An Industrial Gas Company-owned sales outlet, often with brand names like Service Centre, Welders’ Choice, etc.
  • External Outlets – All sales outlets not owned by the gas company
  • Depot – Outlet selling in the Company’s name on a commission basis
  • Distributor/reseller – Outlet selling Industrial Gas Cos products in its own name and at its own price
  • Franchising – A marketing system in which the Industrial Gas Company as a product supplier (franchisor) contracts a number of sales outlets (franchisees) to serve the retail market with the help of a well-defined business concept


  • Service Package – A number of clearly defined services jointly offered to the customers e.g. total gas management, guaranteed supply etc.
  • Service Level – Products correctly delivered automatically related to customers’ consumption
  • Service Standard – Guidelines according to which service has to be executed and delivered (expressed in quality and quantity terms)
  • Service Performance – Measures how the industrial gas service provider fulfills the service standards
  • Service Contract – A service agreement between the gas company and a customer, often including preventive maintenance of cylinders, manifolds, tanks etc.
  • Service Charges – Fees for transportation, cylinder, pallets, manifolds, small liquid tanks, cold converters, Onsites, ASUs and other training services offered to the customers
  • Complementary Products – Equipment and material need by the market segment