PRODUCT CLASSIFICATION- Marketing

Marketers have developed several product classification schemes based on product characteristics as an aid to developing appropriate marketing strategies.

Product can be classified into three groups according to their durability:

s Durable Goods: Durable goods are tangible goods that normally survive many users. Examples include refrigerators, tape recorders, televisions etc.

s Non-Durable Goods: These are tangible goods that normally are consumed for short period. Example include soap, match box etc.

s Services: Services are activities, benefits or satisfactions that are offered for sale. Examples include banking, transport, insurance service etc.

Another method of classifying products is on the basis of consumer shopping habits because they have implications for marketing strategy. Basing on this, goods may be classified into three:

Ø Convenience Goods: Goods that the customer usually purchases frequently, immediately and with the minimum effort. The price per unit is low, Example: soaps, match box etc.

Ø Shopping Goods: These goods are purchased infrequently. The price per unit is comparatively higher. The customer, in the process of selection and purchase of these goods compares the suitability, quality, price and style. Example include furniture, clothing, footwear etc.

Ø Speciality Goods: Goods with unique characteristics and/or brand identification for which a significant group of buyers are willing to make a special purchasing effort. The goods are expensive and purchased rarely. Examples include personal computers, cars, hi-fi components etc.

Industrial Products

One of the ways of classification of industrial products involves two broad categories viz., (1) products that are used in the production of other goods and become a physical part of another product, and (2) products necessary to conduct business that do not become part of another product. The products that become part of another product are raw materials, semi-manufactured goods, compeonets and subcontracted production services. The products that are needed to conduct the business include: Capital goods, operating supplies, contracted industrial services, contracted professional services and utilities.

Raw material include crude oil, coal, iron ore, other mined minerals, lumber, forestry product, agricultural products, livestock, poultry and diary products and the products of fisheries.

Semi-manufacturing goods are products, that when purchased, have already undergone some processing but are incomplete in themselves. Examples are cotton fiber, castings, plate glass and plastics.

Components are completed products meant to become part of another larger, more complicated product. Examples include automobile batteries, headlights, tyres etc.

Subcontracted production services are in sue in large products. Examples are, subcontracting for installation of electrical, heating, air-conditioning and plumbing facilities to others.

Capital goods are manufacturing plants and installations, tools, machines, trucks etc. Operating supplies are industrial products used to keep a business operating normally. These include lubricating oils, paper clips, cash registers etc. The operating supplies usually have a relatively low unit value, and are consumed quickly.

Contracted industrial services include such items as machine servicing and repair, cleaning, remodeling, waste disposal and the operation of the employees’ canteens. Contracted professional services include printing executive recruitment, advertisement, advertising, legal advice, professional accounting, data processing and engineering studies.

The industrial products in the category of utilities consists of energy, telephone, and water.

Analogues Terms

In order to facilities further understanding it will be appropriate to know the meaning of some other terms also which often recur in any discussion about product. Some of these terms are discussed below:

v Need Family: The core need that actualizes the product family. Example: Safety.

v Product Family: All the product classes that can satisfy a core need with more or less effectiveness.

v Product Line: A group of products within a product class that are closely related, because they function in a similar manner or sold to the same customer groups or are marketed through the same types of outlets or fall within given price ranges. Example: Cosmetics.

v Product Item: A distinct unit within a brand or product line that is distinguishable by size, price, appearance or some other attribute. Example: Talcum powder.