Product Classification in Marketing: Consumer & Industrial Goods

Posted on Oct 16, 2024 in Economy

Product Classification

Traditional Classification

A traditional way to classify products in marketing is to distinguish between consumer and industrial products. This distinction is based primarily on the type of buyer rather than the nature of the product itself, as the same product can be sold in both consumer and industrial markets.

However, some products are inherently industrial, such as raw materials or capital equipment (e.g., lathes, milling machines, trucks).

Classification of Consumer Goods

Tangibility

Consumer goods can be classified based on their tangibility:

  • Goods: Tangible products that can be perceived by the senses.
  • Services: Intangible offerings.
  • Ideas: Intangible concepts or intellectual property.

This division is not absolute, as there are varying degrees of tangibility. We will focus on goods.

Durability

Goods can be further classified according to their duration:

  • Durable Goods: Can be used repeatedly for extended periods (e.g., televisions).
  • Consumer Destructive Goods: Consumed or destroyed after one or a few uses (e.g., food, cleaning products).

Purchase Frequency and Effort

Consumer goods can also be classified based on purchase frequency and effort:

Convenience Goods

Frequently purchased with minimal effort:

  • Current/General Purpose: Regularly purchased items (e.g., bread, detergent).
  • Impulse Purchases: Bought without planning or searching (e.g., candy, batteries).
  • Emergency Purchases: Bought in response to an urgent need (e.g., umbrellas, car chains).
Sporadic Purchase Goods

Involve more information search and comparison (e.g., clothing, furniture, appliances).

Specialty Goods

Unique characteristics or brand prestige justify greater purchase effort (e.g., designer clothing, luxury cars, high-end cameras).

Preference Goods

Require minimal buying effort but have strong brand loyalty (e.g., preferred beer, regular newspaper).

Unsought Goods

Consumers are unaware of or don’t actively seek (e.g., new products before advertising, life insurance, burial plots).

Classification of Industrial Goods

Industrial goods can be classified based on their role in the production process and relative cost:

Materials and Parts

  • Raw Materials:
    • Agricultural Products (e.g., wheat, cotton, fruits)
    • Natural Products (e.g., timber, crude oil, fish)
  • Manufactured Materials and Parts:
    • Component Materials (e.g., iron, cement, wires)
    • Spare Parts (e.g., small motors, wheels)

Capital Goods

  • Facilities: Buildings (e.g., factories, offices) and heavy equipment (e.g., generators, compressors, elevators).
  • Equipment and Accessories: Industrial equipment and tools (e.g., hand tools, towing vehicles) and office equipment (e.g., computers, desks).

Supplies and Business Services

  • Supplies:
    • Maintenance and Repair Items (e.g., paint, nails, brushes)
    • Operating Supplies (e.g., lubricants, coal, paper, pencils)
  • Business Services:
    • Maintenance and Repair Services (e.g., window cleaning, photocopier repair)
    • Business Advisory Services (e.g., legal, advertising)