Product Classification/marketing/business/product.ppt

Product Classification/marketing/business/product

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2. 1-2Dr Murtaza Hassan Itoo Lecturer, Department Of Commerce And Business Administration, GDCW Anantnag
UNIT 3
PRODUCT PRODUCT CLASSIFICATIONCLASSIFICATION

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PRODUCT CLASSIFICATION
•“Product is complex of tangible and intangible attributes,
including packaging, colour, price, prestige, and services, that
satisfy needs and wants of people.”
•You have studied in previous unit that, in order to market
effectively, the markets are segmented and marketing
strategies are developed for each segment.
•In the same way, it is also useful to classify products into
homogeneous groups, as different types of products require
different marketing approach. There are several ways of
classifying products:

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Cont.
1.On the basis of the user status, products may be
classified as consumer goods and industrial goods.
2.On the basis of the extent of durability, products may
be classified as durable goods and non-durable goods.
3.On the basis of tangibility, products may be classified
as tangible goods and non tangible goods. These non-
tangible goods are referred to as services.

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Diagram

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Types
•Let us now take the following four major
types, and analyse their characteristics and
marketing strategies:
•1 ) Consumer goods
•2) Industrial goods
•3) Durable and Non-durable goods
•4) Services.

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Consumer Goods
•Consumer goods are those products which are bought by the
households or Consumers for personal non-business use.
•Consumers use the product in Product Concepts and the
form in which the product is being offered i.e., no further
processing is done. For Classification example, a tooth brush,
a comb, a wrist watch.
•Consumer goods may be classified into three types as :
•i) convenience goods,
•ii) shopping goods, and
•iii) speciality goods.

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Convenience Goods
•A class of consumer goods that people buy
frequently with the least possible time and effort
are called 'convenience goods’.
•These are the products the consumers want to
purchase frequently, immediately and with a
minimum effort. Milk, bread, butter,

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Shopping Goods
•These are a class of consumer goo& that are
purchased only after the buyer has spent some
time and effort comparing price, quality, style,
colour, etc., of alternative products in competing
stores.
•The purchaser of shopping goods lacks complete
information prior to the shopping trip and gather
information during it.
•Shopping goods include such items as jewellery,
furniture, appliances, shoes, etc.

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Speciality Goods
•A class of consumer goods with perceived unique
characteristics, such that consumers are willing to
spend special effort to buy them, are known as
Speciality Goods.
•The buyer of speciality goods is well aware of what
he or she wants and is willing to make a special effort
to obtain it.
•Examples of some of the speciality goods are
photographic equipment, TV sets, VCRs, stereo
sound equipment, new automobiles, etc.

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Complements, Substitutes & Impulse
•Complements are goods that are consumed together. 
•Substitutes are goods where you can consume one in
place of the other.
•Impulse goods are products that people buy on impulse,
i.e., without planning to do so. Retailers commonly
place these items near the checkout counters of
supermarkets, filling stations, and other retail outlets.
Products such as
 
chocolate, snacks, chewing gum, and
candy, for example, are impulse goods.

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Industrial Goods
•Industrial goods are those goods which are meant
to be bought by the buyers as inputs in production
of other products or for rendering some service.
•The product may, thus, undergo further commercial
processing. Industrial products are meant for non-
personal and commercial use.
•Industrial goods include items like machinery, raw
materials, components, etc.

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Durable Goods and Non durable Goods
•Tangible products with a long life and lasting many years of
active service to owner are termed as durable goods.
•Television, fan, refrigerator, pressure cooker, etc., may be cited as
examples of durable goods.
•Products which are consumed in one go or last a few uses and
get depleted on
•On consumption are termed as non-durable goods. Soap, tooth
paste, cigarette, soft drink, etc. are some examples of non-durable
goods.
•For example, a bottle of soft drink is consumed at once on ow
occasion within a matter of minutes. Soap obviously takes a little
longer. However, in both these cases, the goods are consumed
very fast.

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Services
•Services are those separately identifiable,
essentially intangible activities which provide want
satisfaction, and which are not necessarily tied to
the sale of a product or another service.
•For example, courts offer a service. So are hospitals,
the fire department, the police and the post office.
•These are not products-in the normal sense and yet it
is very important for each of these institutions to have
an appropriate image.

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Product Mix?
•Product mix, also known as product
assortment or product portfolio, refers to the
complete set of products and/or services
offered by a firm. A product mix consists of
product lines, which are associated items
that
 
consumers 
tend to use together or think of
as similar products or services.

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Product Mix
•A
 
product mix 
is the total number of product
lines and individual products or services
offered by a company. Additionally referred to
as 
product assortment
 
or 
product
portfolio. 
Product mixes vary from company
to company. Some have multiple product lines
with lots of products in each line. But others
are much more limited.

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Product line
•A
 
product line 
refers to a product category or
brand marketed by a company. Products
within a product line all perform a similar
function, offer similar benefits, target similar
customers, are similarly priced, and follow
similar distribution channels. Important
product line attributes include line stretching,
line filling, line modernization, and line
featuring.

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Dimensions
•A product mix strategy has four dimensions:
•Width: Total number of product lines a company offers.
•Length: Total number of products in a company’s
product mix.
•Depth: Total number of product variations in a product
line.
•Consistency: Indicates how product lines relate to one
another.

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Uniliver

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Illustration
•In the illustration above, the product
mix shows a:
•Width of 3
•Length of 5
•Product Line 1 Depth of 2
•Product Line 2 Depth of 1
•Product Line 3 Depth of 2

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Coca Cola

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Width
•Width,
 also known as breadth, refers to the
number of product lines offered by a company.
For example,
 
Kellogg’s 
product lines consist
of:
•(1) Ready-to-eat cereal,
•(2) Pastries and breakfast snacks,
•(3)Crackers and cookies, and
•(4)Frozen/Organic/Natural goods.

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Length
•Length refers to the total number of
products in a firm’s product mix. For
example, consider a car company with
two car product lines (3-series and 5-
series). Within each product line series
are three types of cars. In this example,
the product length of the company
would be six.

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Depth
•Depth refers to the number of
variations within a product line. For
example, continuing with the car
company example above, a 3-series
product line may offer several
variations such as coupe, sedan, truck,
and convertible. In such a case, the
depth of the 3-series product line would
be four.

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Consistancy
•Consistency refers to how closely related product
lines are to each other. It is in reference to their
use, production, and
 
distribution channels. The
consistency of a product mix is advantageous for
firms attempting to position themselves as a niche
producer or distributor. In addition, consistency
aids with ensuring a firm’s brand image is
synonymous with the product or service itself.

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Key Product Mix Strategies
•There are four key product mix strategies:
1.Expansion: 
A company increases the number of product lines
or depth (i.e., product variations) within lines.
2.Contraction:
 
A company narrows its product mix to eliminate
lower-performing products or lines or to simplify remaining
products or lines.
3.Change an Existing Product:
 
A company improves a current
product rather than creating a completely new product.
4.Product Differentiation: Without modifying the product in
any way, a company
 positions it as a superior choice to a
competitive product.

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Additional
•Additional product mix strategies include:
•Deepening Depth: A company keeps existing lines but
expands them.
•Developing New Uses for Existing Products: A company
finds and communicates new uses for current products without
disturbing lines or products.
•Trading Up: A company adds a higher-cost product to an
existing line to improve brand image and increase demand for
its lower-cost products.
•Trading Down: A company adds a lower-cost product to an
existing line of higher-cost products.

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