Classification Of Product

Classification Of Product

Product Classification in Marketing Management involves categorizing products into different types based on their characteristics, usage, and consumer behavior. This classification helps businesses tailor their marketing strategies, pricing, promotion, and distribution based on the type of product they offer. The classification of products can vary depending on multiple factors such as the nature of the product, its durability, its intended use, and how often it’s purchased.

Below is a detailed explanation of all major product classifications in marketing management:

1. Consumer Goods

Consumer goods are products purchased by individuals for personal use. These products can be classified into four main categories:

a. Convenience Goods

• Definition: These are products that are frequently purchased with minimal effort, decision-making, and time. Convenience goods are essential, low-cost items that consumers buy often and with little thought.

• Characteristics:

  • Frequent purchase.

  • Low price.

  • Widely available in stores.

  • Low involvement in the decision-making process.

  • Little or no comparison between brands.

• Examples: Snacks, beverages, toiletries, cleaning products, over-the-counter medicines.

• Marketing Strategy: High distribution, mass advertising, competitive pricing, and placement in locations where consumers shop frequently.

b. Shopping Goods

• Definition: These are products that consumers purchase less frequently, often after comparing various alternatives based on attributes like quality, price, and style. Shopping goods are usually of medium to high price.

• Characteristics:

  • Less frequent purchase.

  • Medium to high price.

  • Consumers compare different options before making a decision.

  • Involves more time, effort, and consideration.

• Examples: Clothing, electronics, furniture, appliances, and home goods.

• Marketing Strategy: Focused on differentiation, highlighting quality and value, advertising comparisons, and enhancing the shopping experience.

c. Specialty Goods

• Definition: These are unique, high-value products for which consumers are willing to make a special effort to obtain. Specialty goods are typically expensive and may have unique features or brand recognition.

• Characteristics:

  • Very infrequent purchase.

  • High price.

  • Consumers actively seek these products.

  • Often involves brand loyalty.

  • Not subject to comparison shopping because they are distinctive.

• Examples: Luxury cars, designer clothing, high-end electronics, exclusive jewelry, expensive art pieces.

• Marketing Strategy: Focus on exclusivity, limited availability, high-quality branding, and premium pricing.

d. Unsought Goods

• Definition: These are products that consumers do not think about regularly or do not actively seek out. These products often require aggressive marketing or are purchased out of necessity.

• Characteristics:

  • Consumers are not actively looking to purchase them.

  • Typically bought out of necessity or emergency.

  • Usually involves significant marketing to create awareness.

  • These goods may be sold through direct selling or aggressive advertising.

• Examples: Life insurance, funeral services, emergency medical supplies, pre-paid funeral plans.

• Marketing Strategy: Intensive promotion, creating need awareness, and often selling through direct channels.

2. Industrial Goods

Industrial goods are products that are used by businesses in the production of other goods or services. These goods can be classified into several subcategories based on their function in the production process.

a. Raw Materials

• Definition: These are basic materials that are processed or transformed to create finished products.

• Examples: Steel, timber, crude oil, cotton, agricultural products.

• Marketing Strategy: Typically involve business-to-business (B2B) selling, often with long-term contracts, price negotiations, and strategic sourcing.

b. Capital Goods

• Definition: These are large, expensive items used by businesses to produce other goods or services. They usually have a long lifespan and are not consumed in the production process.

• Examples: Machinery, factory equipment, industrial robots, buildings, and tools.

• Marketing Strategy: Selling usually involves personal selling, demonstrations, and detailed technical specifications. Strong focus on product features, cost-effectiveness, and ROI.

c. Supplies and Services

• Definition: These are items or services needed by businesses for the daily operation of their activities, but they are not directly used in the production of final goods.

• Examples: Office supplies, maintenance services, consulting services, business software, and spare parts.

• Marketing Strategy: Ongoing relationships, replenishment sales, and competitive pricing.

3. Durability-based Classification

This classification categorizes products based on how long they last and how often they need to be replaced.

a. Durable Goods

• Definition: These products have a long lifespan and are typically expensive. They are used over time and are usually purchased infrequently.

• Characteristics:

  • Long-lasting (typically several years).

  • Higher cost.

  • Often require significant investment and thought before purchase.

• Examples: Furniture, appliances, electronics, automobiles, and tools.

• Marketing Strategy: Focus on quality, longevity, after-sales services, and warranties.

b. Non-Durable Goods

• Definition: These products are consumed or used up relatively quickly. They have a short lifespan and are often purchased repeatedly.

• Characteristics:

  • Short lifespan (usually less than a year).

  • Relatively low cost.

  • Frequent repurchase.

• Examples: Food, beverages, toiletries, paper products, and cleaning supplies.

• Marketing Strategy: High-volume sales, frequent promotions, and competitive pricing.

4. Based on Use

This classification divides products based on whether they are used by the final consumer or as part of production for other goods.

a. Consumer Goods

• Definition: Goods purchased by individuals for personal consumption.

• Examples: Snacks, clothing, cars, and electronics.

b. Industrial Goods

• Definition: Goods used by businesses in the production of other goods or services.

• Examples: Machinery, tools, raw materials, and office supplies.

5. Tangible vs. Intangible Products

This classification is based on whether the product is a physical item or a service.

a. Tangible Products

• Definition: Physical items that can be touched, seen, and felt.

• Examples: Cars, electronics, books, and furniture.

• Marketing Strategy: Focus on features, quality, and physical availability.

b. Intangible Products

• Definition: Services or experiences that cannot be physically touched or possessed.

• Examples: Insurance, banking services, entertainment (movies, concerts), and software.

• Marketing Strategy: Emphasize benefits, customer experience, brand trust, and service quality.

6. Product Life Cycle-Based Classification

Products are also categorized according to where they are in their Product Life Cycle (PLC). This refers to the stages a product goes through from introduction to decline.

• Introduction Stage: Products are launched into the market, often requiring high investment in promotion and distribution.

• Growth Stage: Products see increasing sales, greater market acceptance, and increasing profitability.

• Maturity Stage: Sales growth slows down as the product reaches its peak market saturation.

• Decline Stage: Sales decline as newer alternatives emerge or market interest wanes.

Conclusion

Understanding product classification in marketing management is crucial for businesses to make informed decisions about product development, pricing, distribution, and promotion. By categorizing products into different classes like consumer goods, industrial goods, durable goods, and intangible products, marketers can target their strategies to meet the unique demands of each category and enhance the overall customer experience. This classification also helps businesses manage their product portfolios effectively, ensuring they have the right offerings for different market segments.