Classification of products:
Products and services fall into two broad classes based on the types of consumers that use them
A) Consumer Product:
"Product bought by consumer for personal consumption" Its includes or consumer products divided into four classes.
i) Convenience product:
Consumer product that the customer usually buyers frequently, immediately, and with a minimum of comparison and buying effort consumer products can be divided further into staples, impulse products, and emergency products. Staples Products are those product that consumers buy on a regular basis, such as ketchup, tooth path etc.,
ii) Shopping product:
Consumer good that the consumer, in the process of selection and purchase, characteristically compares as such bases as suitability, quality,price, and style.
Example: furniture, clothing,sued cars, major appliances and hotel and motel services.
iii) Specialty products:
Consumer product with unique characteristics or brand identification for which a significant group of buyers is willing to make a special purchase effort. e.g. Specific brands and types of cars, high-priced photographic equipment, designer clothes etc.
iv) Unsought Products:
Unsought products are consumer products that the consumer either does not knows about or knows about but does not normally think of buying.
B) Industrial Product
Industrial Goods:
While a consumer goods classification system is useful for developing effective marketing mixes, an industrial goods classification is even more valuable. In the family, even allowing for the growing importance of husbands and children, the wife is the prime buyer; she buys all types of goods.
But is an industrial plant, there are a number of buying influences, depending mostly on the product but partly on the company involved. While most purchases are made by a purchasing agent, the major influence may be exerted by the office manager, plant foreman or the executive group.
Industrial Goods Classifications:
Industrial goods buyers do relatively little shopping as compared with consumer goods buyers. The accepted practice is for the seller to come to the buyer. This means that a product classification system based primarily on shopping behavior is not appropriate.
The industrial goods classification we will use is determined by how buyers look at products. Our categories are:
i) Installations:
Installations are large and expensive items which do not become a part of the final product, but instead are used up over many years. All installations are capital items. They represent major expenditures for the company and are depreciated over a period ranging from 2 or 20 or more years.
There are two major classification of installations buildings and land rights and major equipment. Buildings and land rights include factories, warehouses, barns, retail stores, office buildings, wheat fields, deposits, timber rights, etc.
ii) Accessory Equipment:
Accessory equipment (like installations) does not become a part of the final product. These products are usually less expensive and shorter lived than installations, but still are capital items.
Actually, accessory equipment is very similar to the smaller standard installations.
iii) Raw Materials :
Raw materials are those products which have undergone no more processing than is required for convenience, protection or economy in storage, transportation or handling. In contrast with our first two categories, they become part of the physical product.
iv) Component parts and Materials:
Component parts and materials (like raw materials) become a part of the finished product. Both are treated as expense items and have somewhat similar characteristics. These, however, undergo more processing than is required for raw materials.
v) Supplies:
Supplies (like raw materials and component parts and materials) are continually used up in a company's operation. Because of this, they are expense items. Unlike the previous two categories of products, however, supplies do not become apart of the physical product.
Supplies may be divided into three categories:
Maintenance,
Repair,
Operating supplies.
Products and services fall into two broad classes based on the types of consumers that use them
A) Consumer Product:
"Product bought by consumer for personal consumption" Its includes or consumer products divided into four classes.
i) Convenience product:
Consumer product that the customer usually buyers frequently, immediately, and with a minimum of comparison and buying effort consumer products can be divided further into staples, impulse products, and emergency products. Staples Products are those product that consumers buy on a regular basis, such as ketchup, tooth path etc.,
ii) Shopping product:
Consumer good that the consumer, in the process of selection and purchase, characteristically compares as such bases as suitability, quality,price, and style.
Example: furniture, clothing,sued cars, major appliances and hotel and motel services.
iii) Specialty products:
Consumer product with unique characteristics or brand identification for which a significant group of buyers is willing to make a special purchase effort. e.g. Specific brands and types of cars, high-priced photographic equipment, designer clothes etc.
iv) Unsought Products:
Unsought products are consumer products that the consumer either does not knows about or knows about but does not normally think of buying.
B) Industrial Product
Industrial Goods:
While a consumer goods classification system is useful for developing effective marketing mixes, an industrial goods classification is even more valuable. In the family, even allowing for the growing importance of husbands and children, the wife is the prime buyer; she buys all types of goods.
But is an industrial plant, there are a number of buying influences, depending mostly on the product but partly on the company involved. While most purchases are made by a purchasing agent, the major influence may be exerted by the office manager, plant foreman or the executive group.
Industrial Goods Classifications:
Industrial goods buyers do relatively little shopping as compared with consumer goods buyers. The accepted practice is for the seller to come to the buyer. This means that a product classification system based primarily on shopping behavior is not appropriate.
The industrial goods classification we will use is determined by how buyers look at products. Our categories are:
i) Installations:
Installations are large and expensive items which do not become a part of the final product, but instead are used up over many years. All installations are capital items. They represent major expenditures for the company and are depreciated over a period ranging from 2 or 20 or more years.
There are two major classification of installations buildings and land rights and major equipment. Buildings and land rights include factories, warehouses, barns, retail stores, office buildings, wheat fields, deposits, timber rights, etc.
ii) Accessory Equipment:
Accessory equipment (like installations) does not become a part of the final product. These products are usually less expensive and shorter lived than installations, but still are capital items.
Actually, accessory equipment is very similar to the smaller standard installations.
iii) Raw Materials :
Raw materials are those products which have undergone no more processing than is required for convenience, protection or economy in storage, transportation or handling. In contrast with our first two categories, they become part of the physical product.
iv) Component parts and Materials:
Component parts and materials (like raw materials) become a part of the finished product. Both are treated as expense items and have somewhat similar characteristics. These, however, undergo more processing than is required for raw materials.
v) Supplies:
Supplies (like raw materials and component parts and materials) are continually used up in a company's operation. Because of this, they are expense items. Unlike the previous two categories of products, however, supplies do not become apart of the physical product.
Supplies may be divided into three categories:
Maintenance,
Repair,
Operating supplies.
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