Categories: Fundamentals of Marketing

PRODUCT CLASSIFICATION

Several product classification systems have been devised for the efficient marketing of products and services. In the first place, all products and services can be broadly grouped into two major classes on the bases of the types of consumers that use them. These classes are: consumer products and industrial products. In the second place, these two groups are further subdivided into various subgroups

Product Classification

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CONSUMER PRODUCT

These are goods or services bought by the final consumer for personal consumption, in such a form that they may be used without further commercial processing.

The purpose of the marketing process is the satisfaction of consumers. Hence, to develop and market products effectively, it is necessary to know how customers feel about the products most especial y their basis of choice. It follows from here that any sub-division of consumers goods should be based on consumer behaviour. In this regard, all customer goods can be separated into four categories.

( a)Convenience products

(b) Shopping products

(d) Unsought products

A closer examination of these categories of products will reveal that they differ in the ways consumers buy them, hence there are differences in how they are marketed.

CONVENIENCE PRODUCTS

Convenience products are those products and services for which the probable gain from making price and quality comparisons is thought to be small relative to the value of the customer in time and efforts Examples include cigarettes, soap, newspapers, magazines, chewing gums and most grocery products. These products are frequently and readily purchased, require little service or selling efforts, are not very expensive, and may even be bought by habit.

Convenience products can be subdivided further into three types, based primarily on how customers think about and buy such products:

(i )Staples products

(ii) Impulse products

( i i i ) Emergency products.

Staples: Staples such as food and drug items used regularly in every household, are usually bought without much thought beyond the initial decision to buy such products. Staples are usual y purchased frequently. Here branding becomes important since brand recognition or preference helps the customer reduce his shopping effort. In addition, if prices change occasionally on these items, he does not need to reconsider which items to purchase, since he can make do with familiar ones.

Usually, staple items are offered for sale in many convenient places because of customers’ reluctance to search very far. Hence, they an found mostly in food stores, drugstores, supermarkets etc.

Impulse Products:- These are products which customers typically do not seek, they are often purchased with little planning or search effort. These products are normally widely available. This is why candy bars, magazines, etc are placed next to checkout counters in many stores since shoppers may not otherwise think of buying them.

It has been observed that as the income and buying power of customers grow, the number of impulse items seems to the expanding. We should however note that not all impulse items are purchased for emotional reasons alone. To be sure, these products may satisfy both emotional and economic motives.

Emergency Products:- These are purchased only when the need is urgent, and are thus purchased less frequently. Considerations for price and quality are of little importance if the need is immediate enough. Examples include ambulance services, umbrellas or raincoats during a rainstorm.

SHOPPING PRODUCTS

Shopping product are those for which the probable gain from making price, style, suitability and quality comparisons is thought to be large relative to the time and effort needed to shop properly for these products. Consumers spend much time and efforts in gathering information and making comparisons when buying shopping product. Examples include furniture, clothing, used cars, and major appliances.

Shopping products can be subdivided into two classifications, depending on what customers are seeking; (1) homogenous and (2) heterogeneous.

Homogenous Shopping products are seen by the consumer to be similar in quality but different enough in price to justify shopping comparison. Examples here include refrigerators, television sets, and automobiles. Thus, each competitor has an almost perfect elastic demand curve. In such a case, a slight price cut would substantially increase sales volume, therefore, we might expect price competition among the various competitors in the market.

Heterogeneous:-Shopping products are seen by the consumer as nonstandardized, hence wants to inspect for quality and suitability because the product features are more important than price.

It is important therefore that a seller of heterogeneous shopping products carry a wide assortment to satisfy individual tastes. In addition, the seller must have well-trained salespeople to give information and advice to customers since they often prefer to be guided. Furthermore, draperies, dishes and clothing are good examples of this category of shopping product.

Speciality products

Speciality products are those consumer products with unique characteristics or brand identification for which or significant group of buyers is willing to make a special purchase effort. The special effort the consumer makes is not to compare the product with others, but merely to locate it, hence searching in the shopping products sense does not take place here.

Specialty products are usually specific branded items rather than product categories, i.e. they are specific products which have passed the brand preference stage and reached the brand insistence stage. For instance, consumers have been observed asking for a drug product by its brand name, and when offered a substitute actually leaving the store in anger.

Some well-advertised food and drug products seem to have carved out a market for themselves. If they achieve the brand insistence stage, we refer to them as speciality products. The demand for speciality products is relatively inelastic at least within reasonable price ranges since customers are willing to insist upon the product. Typical examples of speciality products include specific brands and types of cars, high-priced photographic equipment and custom-made men’s suits.

UNSOUGHT PRODUCTS

These are consumer products that the consumer either does not know about or knows about, but does not normal y think of buying. There seem to be two types of unsought products: Almost all new products in the introductory stages may be classified as “Unsought” until the consumer becomes aware of them through advertising.

Yet there are some consumer products that seem to perpetually remain unsought for the majority of potential customers. Aggressive and continuous promotion is, therefore, necessary for both types to move new products out of this category and simply to sell the later group (which very often never gets out of the introductory stage). Examples of unsought products include life insurance, encyclopedias, and blood donation to the Red Cross.

INDUSTRIAL PRODUCTS

Industrial products are those purchased for further processing or for use in conducting a business. When this description is compared with that of consumer products, it would be seen that the distinction between then is simply based on the purpose for which the particular product was bought.

For example, if a consumer buys a camcorder for the recording of important event for personal and private use, the camcorder is seen as a consumer product If on the other hand, the consumer buys the same camcorder for the recording of events such as wedding, funeral, birthdays with the intention of receiving financial rewards, this camcorder is considered an industrial product.

The industrial product can be classified into three groups:

( a ) Materials and parts

(b ) Capital items

( c)Supply and services

MATERIALS AND PARTS

These are industrial products that enter the manufacturer’s product completely, including raw materials and manufactured materials and parts.

Raw Materials include farm products (e.g. Maize, wheat, cot on, cocoa beans, livestock, fruits, vegetables etc) and are supplied by many small producers who turn them over to marked intermediaries that process and sell them. The other component of raw materials are natural products (e.g. lumber, fish, crude petroleum, iron ore etc). They usually have great bulk and low unit value, and require a lot of transportation to move them from producer to user. They are also supplied by fewer but lager producers, who often tend to supply these products directly to industrial users.

Manufactured materials consist of component materials (e.g. yam, cement, wires, iron etc) and component parts (e.g. castings, engines, tires, bulbs etc).

CAPITAL ITEMS

Capital items are industrial products that aid in the buyers production or operations. These are composed of (i) installations and (i ) accessory equipment.

Installations are large and expensive items which do not become a part of the final product but instead are used up over many years. They represent major expenditures for the firm and are depreciated over a long period. In addition then are bought directly from the producer. Examples of installations include buildings (e.g. factories, offices) and fixed equipment’s (e.g. generators, drill presses, large computers, elevators)

Accessory equipment like its installation counterparts does not become a part of the final product. They are usually less expensive and shorter-lived than installations. Products in this category include tools and equipment which facilitate production or office activities. Examples include portable drills, lift trucks, typewriters, fax machines, desks, filing cabinets wheelbarrows etc).

SUPPLIES AND SERVICES

These are industrial products that do not enter the finished product at all. Supplies include operating supplies (e.g. lubricants, coal, computer paper, pencils) and repair and maintenance items (e.g. brooms, nails, paint etc.). In some respects, supplies are the convenience products of the industrial field because they are usually purchased with a minimum of effort and comparison.

Services are frequently necessary or desirable to plan, facilitate or support operations. Business services include maintenance and repairs services (e.g. window cleaning, computer and machinery repair etc) and business advisory services (legal, management consulting, advertising etc. ).

CONCLUSION

Production is the first and the most important element in the marketing mix. A product can be defined as a set of tangible and intangible attributes, including packaging, colour, price, quality and brand, plus the seller’s services and reputation. A product may be a good, service, place, person or idea. In essence, then, consumers are buying much more than a set of physical attributes when they buy a product. They are buying want satisfaction in the form of the benefits they expect to receive from the product.

Recap

To manage its products effectively, a firm’s marketers must understand the full meaning of a product, which stresses that consumers are buying want satisfaction. Products can be classified into two basic categories i.e., consumer products and industrial products. Each category is then subdivided, because a different marketing program is required for each distinct group of product.