WHAT IS PRODUCT CLASSIFICATIONS

         PRODUCT CLASSIFICATIONS

                      Marketers have traditionally classified products on the basis of characteristics: durability, tangibility, and use (consumer or industrial). Each product type has an appropriate marketing-mix strategy.

DURABILITY AND TANGIBILITY: 

Products can be classified into three groups, according to durability and tangibility:

1. Non durable goods: 

Non-durable goods are tangible goods normally consumed in one or a few uses, like beer and soap. Because these goods are consumed quickly and purchased frequently, the appropriate strategy is to make them available in many locations charge only a small markup, and adver­tise heavily to induce trial and build preference

2. Durable goods: 

Durable goods are tangible goods that normally survive many uses: refrigerators, machine tools and clothing. Durable products normally require more personal selling and service, command a higher margin and require more seller guarantees.

3. Services:

 Services are intangible, inseparable, variable, and perishable products. As a result, they nor­mally require more quality control, supplier credibility, and adaptability. Examples include haircuts and repairs.

CONSUMER-GOODS CLASSIFICATION: 

Goods can be classified on the basis of shopping habits. We can distinguish among convenience, shopping, specialty, and unsought goods.

Convenience goods: 

Convenience goods are those the customer usually purchases frequently, immediately, and with a minimum of effort. Examples include tobacco products, soaps, and newspaper. Convenience goods can be further divided.

Staple Goods 

Staple Goods are the goods consumers purchase on a regular basis. A buyer might routinely purchase Kissan ketchup, Colgate toothpaste, and Lux soap.

Impulse goods

Impulse goods are purchased without any planning or search effort. Candy bars and magazines are impulse goods.Emergency goods: Emergency goods are pur­chased when a need is urgent-umbrellas during a rainstorm, boots and shovels during the first winter snowstorm. Manufacturers of emergency goods will place them in many outlets to capture the sale.

Shopping goods are goods that the customer, in the process of selection and purchase, characteristically compares on such bases as suitability, quality price, and style. Examples include furniture, clothing, used cars; arid major appliance-Shopping goods can be further divided.

Homogeneous shopping Homogeneous shopping goods are similar in quality but different enough in price to justify shopping comparisons.  

Heterogeneous shopping:  Heterogeneous shopping goods differ in product features and services that may be more important than price. The seller of heterogeneous shopping goods carries a wide assortment to satisfy individual tastes and must have well-trained salespeople to inform and advise customers.

Specialty goods:

Specialty goods have unique characteristics or brand identification for which a suf­ficient number of buyers are willing to make a special purchasing effort. Examples include cars, stereo components, photographic equipment, and men's suits. A Mercedes is a specialty good because interested buyers will travel far to buy one. Specialty goods do not involve making comparisons; buyers invest time only to reach dealers carrying the wanted products. Dealers do not need convenient locations; however, they must let prospective buyers know their locations.

Unsought goods 

Unsought goods are those the consumer does not know about or does not normally think buying, like smoke detectors. The classic examples of known but unsought goods are life insurance, cemetery plots, gravestones and encyclopedias. Unsought goods require advertising and personal-selling support.

INDUSTRIAL-GOODS CLASSIFICATION: 

Industrial goods can be classified in terms of how they enter the production process and their relative costliness. We can distinguish three groups of industrial goods: materials and parts, capital items, and supplies and busi­ness services.Materials and parts are goods that enter the manufacturer's product completely fall into two classes: raw materials and manufactured materials and parts:

Raw materials Raw materials fall into two major classes:

a) Farm products (e.g., wheat, cotton, livestock, fruits, and vegetables) b) Natural products (e.g., fish, lumber, crude petroleum, iron ore )  
These are supplied by many producers, who turn them over to marketing intermediaries, who provide assembly, grading, storage, transportation, and selling services. Their perishable and seasonal nature gives rise to special marketing practices. Their commodity character results in relatively little advertising and promotional activity, with some exceptions. At times, commodity groups will launch campaigns to promote their product-potatoes, prunes, milk.

Natural products are limited in supply. They usually have great bulk and low unit value and must be moved from producer to user. Fewer and larger producers often market them directly to industrial users. Because the users depend on these materials, long-­term supply contracts are common. The homogeneity of natural materials limits the amount of demand-creation activity. Price and delivery reliability are the major factors influencing the selection of suppliers.

Manufactured materials and parts fall into two categories: 

component materials (iron, yarn, cement, and wires) andcomponent parts (small motors, tires, castings) Componentmaterials are usually fabricated further-pig iron is made into steel, and yam is woven into cloth. The standardized nature of component materials usually means that price and supplier reliability are key purchase factors. Component parts enter the finished product with no further change in form, as when small motors are put into vacuum cleaners, and tires are put on automobiles. Most manufactured materials and parts are sold directly to industrial uses. Price and service are major marketing considerations, and branding and advertising tend to be less important.

Capital items 

Capital items are long-lasting goods that facilitate developing or managing the finished product. They include two groups:

Installations.

 Installations consist of buildings (factories, offices) and equipment (generators, drill presses, mainframe computers, elevator installations are major purchases. They are usually bought directly from the producer. The producer's sales force includes technical personnel. Producers have to be willing to design to specification and supply post sale services. Advertising is much less important than personal selling

Equipment: 

equipment comprises portable factory equipment and tools (hand tools, lift trucks) an office equipment (personal computers, desk) these types of equipment do not become part of a finished product. They have a shorter life than installations but a longer life than operating supplies. Some equipment manufacturers sell direct, more often they use intermediaries, because the market is geographically dispersed, the buyers are numerous, and the orders are small. Quality, features, price, and service are major considerations. The sales force tends to be more important than advertising, although the latter can be used effectively.      

Supplies and business services are short-lasting goods and services that facilitate developing or managing the finished product. Supplies are of two kinds: maintenance and repair items (paint, nails, brooms), and operating supplies (lubricants, coal, writing paper, pencils) together, they go under the name of MRO goods. Supplies are the equivalent of convenience goods; they are usually purchased with minimum effort on a straight rebury basis. They are normally marketed through intermediaries because of their low unit value and the great number and geographic dispersion of customers. Price and service are important considerations, because suppliers are standardized and brand preference is not high.

Business services include maintenance and repairservices (window cleaning, copier repair) and business advisory services (legal, management consulting, and advertising) L Maintenance and repair services are usually supplied under contract by small producers or are available from the manufacturers of the original equipment. Business advisory services are usually purchased on the basis of the supplier's reputation and staff.

                           The difference between a durable and nondurable good is the length of time the good lasts before consumption. A nondurable good is defined as a product that lasts 3 years or less, while durable goods are those that last greater than 3 years.