Standard Industrial Classification (SIC)

(noun)

A set of codes published by the United States government that classifies business firms by the main product or service provided.

Examples of Standard Industrial Classification (SIC) in the following topics:

  • Segmentation for B2B

    • For example, SIC number 22 are textile mills, while SIC number 34 are manufacturers of fabricated metals.
    • There are several basic approaches to segmenting organizational markets, including: type of customer, Standard Industrial Classification codes, end uses, common buying factors, and buyer size and geography.
    • This approach employs the Standard Industrial Classification (SIC) codes published by the United States government.
    • Within each classification, the major groups of industries can be identified by the first two numbers of the SIC code (see example).
    • By using SIC codes, a marketer may identify the manufacturing groups that represent potential users of the products it produces and sells. takes the two digit classification and converts it to three-, four-, five-, and seven-digit codes.

  • Marketing Classes of Products

    • Industrial market example: A steel mill might purchase computer software, pencils, and flooring as part of the operation and maintenance of its business.
    • The traditional classification of products is to dichotomize all products as being either consumer goods or industrial goods.
    • These products are usually of low unit value, they are highly standardized, and frequently they are nationally advertised.
    • Specialty goods represent the third product classification.
    • The latter criteria offers a more insightful classification for industrial products.

  • The industry environment

    • In a more formal sense, the North American Industry Classification System (NAICS, http://www.census.gov/epcd/www/naics.html) defines hundreds of different industries.
    • Similar classification systems include the International Standard Industrial Classification (ISIC, http://unstats.un.org/unsd/cr/registry/regcst.asp?
    • Cl=17) from the United Nations and the General Industrial Classification of Economic Activities with the European Communities (NACE, http://www.ltck.se/PrjY1/nacekod/nacecode.htm).
    • Locating the industry for a business through the NAICS or similar classification scheme can be a useful exercise in gathering competitive intelligence.

  • Industry Comparisons

    • An industry represents a classification of companies by economic activity.
    • At a very detailed level are classification systems like the ISIC (International Standard Industrial Classification).

  • Business Products

    • Industrial products can either be categorized from the perspective of the producer and how they shop for the product, or from the perspective of the manufacturer, how they are produced and how much they cost.
    • The latter criterium offers a more insightful classification for industrial products.
    • Since these products tend to be standardized, there is a strong emphasis on price and vendor reliability.

  • Classifying Business Products

    • Industrial products can either be categorized from the perspective of the producer and how they shop for the product, or the perspective of the manufacturer and how they are produced and how much they cost.
    • The latter criteria offers a more insightful classification for industrial products.
    • Since these products tend to be standardized, there is a strong emphasis on price and vendor reliability.

  • Value of a High Dividend

    • The classification of a high-yield stock is relative to the criteria of any given analyst.
    • There is no set standard for judging whether a dividend yield is high or low.
    • The strategy dictates that the investor compile a list of the 10 highest dividend yielding stocks from the Dow Jones Industrial Average and buying an equal position in all 10 at the beginning of each year.