When it comes to products, there are so many types out there that it can be overwhelming trying to find the right one for you. From the basics like food and clothing to more complex items like electronics and furniture, there’s something for everyone.
For entrepreneurs and newcomers alike, gaining an in-depth knowledge of the various product types available to you can prove invaluable for your prosperity. This article will help you identify the different types of products out there and provide an overview as to how they can fit into your business.
What are Products?
Products are items created and distributed to meet the needs of consumers. They start with raw materials and go through a production process before they become consumer products. Products can be divided into convenience products, shopping products, specialty products, etc. Products aren’t just physical items; they can be intangible too, like services or virtual products like software and in-app purchases for mobile games.
Even textbooks may come with additional online materials that are both tangible and intangible elements combined together. No matter what products you offer, developing a successful marketing strategy is key to success. A great product won’t do well in the market if it isn’t promoted and marketed properly.
What is Product Classification?
Product classification is a way of organizing different types of products and services into categories based on their characteristics. These categories help marketers identify potential customers, understand market dynamics, and create effective campaigns to reach them.
By carefully analyzing consumer buying patterns, similarities to other brands, and their respective price ranges, products can be purposefully categorized into four distinct groups. This product categorization goes beyond refining strategies for marketers, as it allows them to more accurately identify the individual needs of their consumers.
What are the four Types of Products?
In marketing, products can be classified into four types – convenience products, shopping products, specialty products, and unsought products. Let’s take a look at each of these in more detail-
1. Convenience Goods
As one of the first types of products, convenience goods are those that consumers purchase frequently and without much effort.
Examples of this type of product include food items such as bread, milk, and eggs, as well as household items like paper towels and cleaning supplies. These types of products are usually found in convenience stores or supermarkets and require no real comparison shopping or research.
The right promotional strategy for convenience products, then, is to make them easily accessible and available to consumers. When marketing a convenience good, keep in mind that people are likely to make impulse purchases.
Thus, strategically positioning your products near checkout lines at stores can be an effective approach; hence why you frequently find candy and gum located close to the register!
2. Shopping Goods
Unlike convenience goods, shopping products are those for which the consumer typically does research and comparison shopping before making a purchase.
Examples of this type of product include cars, appliances, furniture, and other big-ticket items. Consumers typically take into consideration factors such as quality, price, and brand loyalty when making a purchase decision for this type of product.
As such, the right branding strategy to use for such types of consumer products is one that emphasizes these qualities.
Additionally, it’s important to make sure customers have access to a wide range of choices when it comes to these products. Providing multiple options for customers can be beneficial, as shoppers are more likely to make decisions based on the comparison.
3. Specialty Goods
Specialty goods are those that require a more in-depth knowledge and understanding of the product before making a purchase decision.
Examples of this type of product include high-end electronic and computer equipment, certain types of clothing, and jewelry. Because the consumer typically has to invest more in these products than in convenience or shopping goods, they are often willing to invest time into researching their purchase.
The best-suited marketing technique for specialty goods should focus on education and building brand loyalty. It’s important to make sure that customers understand the features and benefits associated with these products, so providing detailed product information can help.
Additionally, building strong relationships with consumers is key when marketing specialty goods, as this will increase the likelihood of the customer returning for future purchases.
4. Unsought Goods
Finally, unsought goods are those that the consumer may not even know or think about; they generally require a lot of marketing effort to make them desirable.
Examples of this type of product include emergency preparedness supplies, life insurance policies, and funeral services. The right marketing strategy for unsought goods is one that focuses on educating consumers about their necessities.
Oftentimes, customers may not be aware of the need for these goods or services until they are presented with them; thus, it is important to emphasize the benefits associated with them and provide detailed information about why they are necessary.
Additionally, focusing on building relationships with potential customers can be beneficial in encouraging purchases of unsought goods.
What are the different types of Industrial Products
Capital goods are items used to produce other products. These can include major equipment like machinery, tools, and buildings. They also may include accessory equipments such as generators and conveyor systems. Businesses rely on capital goods to help run their operations and create products.
Businesses may utilize capital goods, which come in a range of forms. These can include large installations that are necessary for operations or machinery and components specifically designed to optimize manufacturing processes. Capital goods can constitute a substantial part of business expenditure.
Raw materials are the basic components that go into making finished products. This includes everything from lumber and steel to rare minerals and chemicals. They are usually purchased from suppliers, with the raw materials then being used in the production process.
Transforming raw materials into useful products is something that businesses often specialize in. Natural and agricultural items, such as timber, wheat, corn, and water are all examples of resources used to create a variety of finished goods or services. Refining processes help refine the item for specific use cases, so it can be put to its best possible use.
Component parts are smaller pieces that make up finished products. Examples include nuts, bolts, and other hardware used in automobile manufacturing or components used to build computers and other electronics.
Companies use component parts to construct larger products. Businesses manufacture and assemble these components, then supply them for sale to other companies who incorporate the pieces into consumer goods. Examples of component parts include computer hard drives, cast metal items, and tires.
Major equipment includes large-scale pieces of machinery used to create consumer and industrial goods. Examples include printing presses, farm equipment, and manufacturing machines. Businesses purchase major equipment to help them create their products. This type of product usually requires a special purchasing effort and may include maintenance and repair services.
As part of their asset management strategy, businesses often monitor the value and status of expensive items very carefully. To acquire these high-cost assets, many companies take on debt which can potentially influence future planning decisions.
Accessory equipment is used to support major pieces of machinery. These items often include generators, motors, and conveyor systems. A variety of items, including tools and shelving units in the production area or computers that are used to support sales and marketing efforts, can be considered accessory equipment.
Often, businesses purchase accessory equipment to increase the efficiency or output of existing machines. It can also be used to provide additional support for larger machinery or operations.
Operating supplies are materials used in the day-to-day operation of a business or industry. This includes everything from office supplies to fuel, lubricants, and other materials used in production.
Companies rely on operating supplies to keep their businesses running, such as paper, pens, and cleaning products. To ensure a steady supply of these items for daily operations, companies regularly purchase bulk orders from their suppliers.
Why is it important to classify products?
When it comes to selling, understanding the differences between product classes can be essential. By knowing what type of product a business is dealing with, it can utilize the most effective marketing strategies to reach its target demographic. Final products, such as consumer goods and industrial products, require different types of promotion than component materials or natural resources.
For instance, personal selling is often used to promote final products like consumer goods, while industrial products may require a more impersonal approach using brochures or catalogs. Agricultural and natural products may require multiple approaches depending on their usage. Understanding the differences between product classes is key to achieving success in the marketing process. By knowing what type of product a business is dealing with, it can determine the most effective ways to reach its target demographic and increase sales. Some of the key reasons behind the importance of product classification are-
Creating new products becomes simpler
By understanding the different classes of products, companies are able to identify areas where their products could be improved. This can result in new product development that is more successful and cost-effective.
Maximize your budget and cut marketing expenses with savvy spending
By understanding the different classes of products, companies can use targeted advertising to reach potential customers more efficiently. This helps businesses save time and money on marketing and advertising by targeting the right people with the right message.
Give your customers the information they need to make informed decisions
Classifying products helps businesses provide customers with relevant information about their offerings. This can help customers make better-informed decisions when it comes to buying products or services from a company.
Empowers to make informed strategic decisions
Classifying products can help businesses develop strategies that are tailored to their target audience. This allows companies to focus resources on areas where they will have the most impact, allowing them to optimize their efforts for maximum results.
Better inventory management
Knowing which product classifications are selling well and which ones don’t help businesses manage their final product inventories more effectively. This ensures that companies always have enough of the right products on hand to meet customer demand.
Examples of Different types of products
Here are some examples of each category of products:
Consumer products examples
a. Convenience products:
- Soft drinks,
- Over-the-counter medicines, etc
b. Shopping products:
- Jewelry, etc.
c. Specialty products:
- Designer Clothing
- High-end stereo systems, etc.
d. Unsought products:
- Life insurance
- Burial plots
- Funeral services
- Legal services
- Home security systems, etc.
Industrial products Examples
a. Capital goods:
- Heavy machinery
- Construction Equipment
- Aerospace components
- Industrial chemicals
- Computer hardware
- Medical devices, etc
b. Raw materials:
- Seeds, etc.
c. Component parts:
- Auto parts
- Gears, etc.
d. Major equipment:
- Large-scale processing equipment
- Refrigeration systems
- Production line machinery
- Transportation vessels, etc.
e. Accessory equipment:
- Ladders, etc.
f. Operating supplies:
- Cleaning supplies
- Office Supplies
- Maintenance parts, etc.
Examples of service products
a. Pure services:
- Legal services
- Web design, etc.
b. Core services:
- Television and Internet services
- Plumbing services
- Transportation services such as airlines, taxis, and buses
- Telecommunications services
- Hospitality services like hotels, etc
In conclusion, understanding the types of products and the buying behavior associated with them is important for businesses when determining successful marketing strategies. There are many types of products, ranging from consumer product to industrial product to agricultural product, each requiring its own unique approach.
Consumer buying behavior is focused on the individual, while industrial users focus more on the derived demand for a product. Farm products vary greatly depending on availability, while office equipment is used in many types of businesses. Understanding the types of products and how they are purchased can help businesses create a successful marketing strategy.
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what are the advantages and disadvantages of a product
Adeshola DANIEL says
What is the difference between product and consumer product
Hitesh Bhasin says
Well the only difference can be if the product was a business product. Consumer products are products bought by residential customers or individuals. Business products are bought in bulk by businesses.
Siyab ud Din says
is private jet a product or service?
Hitesh Bhasin says
Well, if you are buying a private jet for yourself then it is a product. If you are buying a private jet to fly your clients from one place to another, then it is a service.
Sneha Jaiswal says
Lydia Amutuhaire says
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