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Product Classification – Consumer Goods and Industrial Goods

Product Classification has been traditionally done by marketers based on their characteristics of durability, tangibility and usage (consumer or industrial).

Product Classifications

Durability and Tangibility

Based on the durability and tangibility, products have been classified into three groups:

1. Non-durable goods

The tangible goods that are normally consumed in one or a few uses, for example, alcohol and a sanitiser, are non-durable goods. The appropriate strategy for such products would be to make them available widely and charging only a small mark-up. Non-durable goods should be advertised heavily to encourage trial and build preference.

2. Durable goods

Goods like television, stereo system, smartphones and clothing are tangible goods as they can survive many uses. Personal selling is required for Durable products. They have a higher service margin. Also, durable goods require more seller guarantees.

3. Services

Services are intangible, perishable, variable and inseparable in nature. Therefore, they generally require more quality control, more adaptability and more credibility by the supplier. Hospitality, healthcare, legal advice, salon, and repairs are some excellent examples of services.

Consumer Goods

The shopping habits of consumers can help in classifying a wide variety of goods they buy.

Because of the buying habits of consumers, we can distinguish among convenience goods, shopping goods, speciality goods and unsought goods

  1. Convenience Goods
  2. Shopping Goods
  3. Speciality Goods
  4. Unsought goods

Convenience Goods

Consumers purchase convenience goods regularly, instantly and with minimal efforts according. Tobacco products, soft drinks and newspaper are some examples of convenience goods.

These can be further divided into

1. Staples goods

Staple goods are purchased by the consumer on a regular basis. A buyer might routinely purchase Kellogg’s cereals, Sensodyne toothpaste, and Oreo cookies. These can be classified as staple goods.

2. Impulse goods

These goods can be purchased without any planning, searching or efforts. A buyer might routinely purchase Kellogg’s cereals, Sensodyne toothpaste, and Oreo cookies. These can be classified as staple goods.

3. Emergency goods

Emergency goods are purchased when one is in an urgent need. Medicines from a pharmacy, umbrellas during a rainstorm and other such things that one can’t go without in an emergency are great examples of this category.

Shopping Goods

Goods that the consumer compares in the process of selection and purchase are called Shopping Goods. These are compared before purchase on the basis of characteristics like suitability, quality, price, and style.

For example, Nike shoes, IKEA home décor and H&M apparels. Shopping goods can be further divided into:

The goods are similar in quality but differ in price in order to justify shopping comparisons. These are called Homogeneous shopping goods. The goods that are different in product features and services, the factors that may be more important in price, are called Heterogeneous shopping goods.

Specialty Goods

Specialty goods have unique characteristics or brand identification to set them apart from the crowd. Sufficient number of buyers willingly make a special purchasing effort for such goods.

BMW automobile, Bose home theatre systems, Cartier jewellery, Armani designer clothing are a few examples. The buyers invest time to reach dealers that carry the products they want.

Specialty goods do not involve making comparisons. Convenient locations are not needed for the dealers of these products. They only have to let prospective buyers know their locations.

Unsought goods

The goods that the consumers do not know about or something that they would not usually buy are known as Unsought goods. Unsought goods require advertising and personal selling support. The classic example of known but unsought goods is insurance policies and cemetery plots.

Industrial goods

The stage of entering the production process and their relative costliness are some ways that can help classify Industrial goods.

They can be distinguished into three groups: a) materials and parts, b)capital items, and c) supplies and services.

  1. Materials and parts
  2. Capital items
  3. Supplies and services

Materials and Parts

1. Raw materials

Goods that enter a manufacturers product completely are the Materials and Parts. They can fall into two classes

Raw materials, and Manufactured Materials and Parts.

2. Manufactured Materials and Parts

Raw materials fall into classes: farm products (e.g., fruits, cotton, wheat, corn and livestock) and natural product (e.g., fish, lumbar and crude petroleum). Each product is marketed a little differently.

Capital Product Items

Capital products items advance the development and management of the finished product. They are mostly long-lasting goods. Capital Products are comprised of two general groups- Installations and Equipment.

1. Installations

consist of buildings and fixing equipment. Buildings like manufacturing plants in offices and fixing equipment like drill presses, computers, elevators and generators. Installations are generally bought directly from the producer as these are major purchases. Ideally, long negotiations happen before the actual sale.

2. Equipments

encompass factory tools and equipment and also office equipment. They do not become a part of the finished product. Their job is to help in the production process. Office equipment’s consist of desks and computers whereas factory equipment are comprised of forklift trucks, hand tools, etc.

Supplies and Services

Supplies and Services advance the development or management of the finished product.

1. Supplies

  • Operating Supplies- Coal & Lubricants
  • Maintenance and Repair Items – Cleaning supplies & Paints

2. Services

  • Maintenance and Repair Services – computer repair & office cleaning
  • Business Advisory Services – Advertising & management consulting & legal Services.