Classification of Products

The products are classified as follows:

1. Consumer Products
   1. Convenience Goods
   2. Shopping Goods
   3. Specialty Goods
   4. Unsought Goods
      
      
2. Business Products
   1. Materials and Parts
   2. Capital Items
   3. Supplies and Business Services

Consumer Products

Consumer goods can be classified on the basis of their shopping habits. They are grouped as convenience goods, shopping goods, specialty goods and unsought goods. Consumer goods are targeted for consumption of either individuals or family members.

Convenience Goods

These are goods frequently purchased by consumers. They often buy them in frequent consumption situations and they are purchased immediately and with minimum efforts.

Examples include toiletries, soaps, cigarettes and newspapers.

These goods can be further classified as follows:

• Staple Goods: Consumer purchases on a regular basis. There is a high level of routinised response behaviour for this kind of products. Toothpaste and soaps fall under this category.
  
  
• Impulse Goods: Consumer purchases without any planning or search effort. Purchases of a magazine or a chocolate candy are examples of situations in which customers buy on impulse.
  
  
• Emergency Goods: Consumer purchases on urgent need. There is no previous decision to buy them but the consumer is forced to buy due to the emerging situation. These include the purchase of umbrella, antiseptic creams like Burnol or knife to cut down trees during the rainy season.

Shopping Goods

Shopping Goods are goods that the customer purchases by undergoing a comparative process of selection and purchase on such bases as price, psychological fitment, suitability, style and quality.

Examples include furniture, electrical appliances, home furnishings and clothing.

Shopping goods can be classified as follows:

• Homogeneous: Shopping Goods which are the goods that are similar in quantity but differ in price levels, justifying a pricing comparison by the buyer.
  
  
• Heterogeneous: Shopping Goods which are the goods, which differ in product features, and services and these differences, are more important than price for a decision.

Specialty Goods

These are goods with unique characteristics or brand identification for which the buyers need to make a special purchasing effort.

Examples include music systems, televisions, cars and men’s clothing. There is hardly any comparison in speciality goods as each brand is unique and different than others. The buyer is ready to spend more time and effort while making a purchase decision for this kind of goods.

Unsought Goods

These are goods the consumer does not know about or does not normally think of buying. These goods need advertising and more of personal selling efforts for making a sale.

Examples include life insurance products, coffins and fire alarms.

Business Products

Many of the goods coming out of a firm enter another firm’s production process, so that the final goods can be made ready for consumption by individual or family consumers.

Many of these products go to the production process as raw materials and spare parts; some of them also enter as capital items for augmenting the finished goods and the rest as consumables or supplies. These are ably supported by services targeted towards business class customers.

Following is the classification of industrial goods applicable for the purpose of product management.

Materials and Parts

These are goods that enter the manufacturer’s product completely. They are of two types namely raw materials and manufactured materials and component parts.

Raw materials can be of farm products like rice, maize, cotton, starch or natural products like fish, petroleum, gas, iron and aluminium ore.

• Farm products are renewable as they involve agricultural production.
• The natural products are very often limited and often available in great bulk and low unit value. There are a few but large producers and marketers supplying natural products.
• Long-term supply contracts are a common phenomenon in these categories, as the industry needs an uninterrupted supply of products and services for running their business process.

Manufactured materials can be classified as component materials like iron, steel, zinc and component parts like motors, printed integrated circuits.

The component materials are further fabricated like from alumina to aluminium, pig iron to steel and cloth from yarn. Components enter the final product without being changed or modified. In this case price, quality and service are important factors while making a decision.

Capital Items

Capital Items are long-lasting goods that facilitate developing or managing the finished product.

They include two groups: installations and equipment.

• Installation includes buildings, shades, offices and shop floors and heavy equipment like earthmovers, trucks, drillers, servers and mainframe computers. Installations are major purchases for the organisation.
  
  
• Equipment includes hand tools and office equipment like personal computers, laptops. These equipment are not permanent and they need to be replenished at different period of time.

Supplies and Business Services

These are short-term goods and services that facilitate managing or developing the finished product supplies.

They can be of two kinds namely maintenance and repair items and operating supplies.

Maintenance supplies include painting, nailing and operating supplies include writing papers, consumables for computer, lubricants and coal.

Business services can be classified as maintenance service like copier repair, window and glass cleaning and business advisory services include consultancy, advertising and legal services.

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Reference

• V. S. Ramaswamy, S. Namakumari; 2009; Marketing Management; MacMillan Publishers Pvt Ltd.
• Kotler, Keller, Koshy, Jha; 2009; 13th Edition; Marketing Management: A South Asian Perspective.

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