HOW MARKETERS CLASSIFY PRODUCTS

I. Product classitification:
Product classification in marketing is a strategic approach to categorizing products based
on their characteristics (purpose, durability, tangibility) and consumer buying behavior.
This classification plays a crucial role in shaping marketing strategies, pricing,
distribution and promotional efforts. It helps businesses tailor their approach to different
types of products, from daily essentials to luxury items, ensuring they effectively meet
consumer needs and market demand.
Now that we understand the importance of product classification, let's dive into one of
the key ways products are categorized: which is durability.
II. Durable & Nondurable goods:
Marketers classify consumer goods as durable or nondurable depending on how long
the product lasts.
- Durable goods: are consumer goods that have a long lifespan and don’t wear out
quickly. Cunsumers don’t purchase them often since they are considered
expensive, and people can use them for a long period of time - at least three years.
For example, cars, furniture, appliances.
As I just mentioned, durable goods are typically expensive purchases and are expected to
last for years, consumers tend to spend a lot of time and energy on the decision process to
avoid wasting money or regretting their choices. And for that reason, marketers when
offer high-involment products, they need to understand consumers' desires for different
product benefits and they must be sure that consumers can find the information they
need.
One example of this is: A laptop manufacturer might create a series of blog posts or
videos comparing different models for various user needs (e.g., gaming, business, casual
use).
- In contrast to durables, Nondurable goods are goods that have a short lifespan and
are usually consumed in one use. After a short period of time, these goods must be
bought again in successive purchases. These include food and other products like
cosmetics, newspapers.
Example: It’s common to see candy bars and small snacks placed near checkout counters
in supermarkets, which capitalizes on spontaneous purchases.
Moreover, consumers usually don't "sweat the details" so much when they choose among
nondurable goods. There is little if any search for information. Sometimes this means that
consumers buy whatever brand is available and is reasonably priced.
In other instances, they base their decisions largely on past experience. Because a certain
brand has performed satisfactorily before, customers often see no reason to consider other
brands, and they choose the same one out of habit.
Example: A consumer tend to consistently buy the same brand of toothpaste or deodorant
because it has worked well for them in the past. And the same goes for, pet owners
sticking to a particular brand of dog or cat food that their pets have responded well to.
And this behavior can lead to brand loyalty, which marketers often try to cultivate and
maintain through consistent product quality
Minigame: Cars, furniture, electronics, books, tables, chairs/ Soft drinks, dish soap,
laundry detergent.

Now that we've explored the distinction between durable and nondurable goods and how
they influence consumer behavior and marketing strategies, let's shift our focus to
another crucial aspect of product classification. This next categorization dives deeper
into how consumers interact with different types of products in the marketplace.
III. Classifications of products
There are four types of products and each is classified based on consumer habits, which
mean where and how consumers buy the product. These include: convenience goods,
shopping goods, specialty products, and unsought goods. (Chen bang mau cam)

Consumer

Convenience
Goods

Shopping
Goods

Specialty
Products

Unsought
Goods
Let's dive into each one in more detail:
- Convenience goods: are everyday items that consumers purchase frequently and
with minimal thought and effort. These are typically low-priced and readily
available in many locations. The buying decision for these goods is primarily
driven by convenience and necessity rather than brand loyalty or extensive
research.
Common examples include items like bread, milk, toothpaste, and soap. These are
products typically found in a variety of stores and purchased regularly without much
planning or comparison.
In other words, consumers generally already know all they need or want to know
about a convenience product, devote little effort to purchases, and willingly accept
alternative brands if their preferred brand is not available in a convenient location.
Therefore, the most important thing for marketers of convenience products is that they
need to make sure the product is easily obtainable in all the places where consumers
are likely to look for it.
For example, Coca-Cola ensures its products are available in supermarkets, vending
machines, restaurants, and even small corner stores. Their unique red logo makes the
brand instantly recognizable.

There arc several types of convenience products:

- First of all, we got Staple products, such as milk, bread, and gasoline, are basic or
necessary items that are available almost everywhere. Most consumers don't
perceive big differences among brands. A particular category of staple products is
called consumer packaged goods.
A consumer packaged good (CPG) or fast-moving consumer good (FMCG) is a low-cost
good that we consume quickly and replace frequently.
Like staple products in general, CPGs (or FMCGs) are also frequently purchased but are
less basic, with more variations than general staples. Importantly, they are also more
brand-centric, and consumers tend to perceive more differences in product quality,
features, and benefits, so the brands are heavily advertised.
For example , in terms of personal care products, we got:
 Shampoo (e.g., Head & Shoulders, Pantene)
  Toothpaste (e.g., Colgate, Crest)
 Deodorant (e.g., Dove, Old Spice)
These products play a crucial role in retail strategy. Retailers often use CPGs/FMCGs as
"loss leaders" - selling them at or below cost to attract customers into the store, banking
on the fact that once in the store, customers will likely purchase other, higher-margin
items.
The CPG/FMCG market is highly competitive, with brands constantly innovating in
product features, packaging, and marketing to maintain their market share and attract
consumers.
- The second type we got here is Impulse products, which are items an individual
doesn't plan to purchase before their shopping trip but still ends up buying them.
Consumers tend to buy these products because of encouragement from
advertisements or product placement in the store.
When marketers want to promote impulse products, they need to face two challenges: (1)
to create a product or package design that "reaches out and grabs the customer" and (2) to
make sure their product is highly visible.
For example, by placing snacks and drinks near checkout counters in supermarkets or
using cardboard stand-up displays in store aisles for new products.

Furthermore, Package design and placement is becoming ever more important as

customers come through the lines with "mobile blinders" on. This means that customers
are often distracted by their phones while shopping or waiting in line, making them less
likely to notice impulse products. For that reason, targeted promotions Marketers are
using new tech to reach customers on their phones while they're in the store.
For instance, when you’re near the health section, a phone pings: "Flu season is here!
20% off vitamins today only." Or while waiting in line, your phone suggests: "Try our
new drink today - $1 off right now!"

- And the last convenience products type we’re talking about is Emergency
products. As the name suggests, we purchase emergency products when we're in
dire need; including bandages and umbrellas. Since consumers purchase these
items when emergencies occur, they often don't have time to research their best
option and instead choose what's available in their current location. For example,
 someone who gets a headache while visiting a museum may decide to purchase a
pain reliever in the museum gift shop to relieve their pain even though it may cost
more than the pain reliever in the grocery store.

- And in contrast to convenience products, Shopping goods are products that

consumers spend time and effort comparing based on quality, price, and suitability
before making a purchase. These goods are usually more expensive than convenience
goods and bought less frequently. Consumers are willing to invest time in research
and visiting different stores to make the best choice. And this can change the way
marketers advertise them.
For example, because consumers typically perform more research or have higher
standards for these purchases, they may include more information in their marketing
campaigns and choose more specific demographic groups to target. For example, a
marketing team may choose to target college-aged consumers when creating
advertisements for laptops, as this demographic often needs the product. The
marketing team might also include more information about the laptop's abilities, such
as its graphics quality or operation speed.

- Next, we got Speciality goods, which are unique and usually luxury items that
consumers make special efforts to purchase. These goods are characterized by
distinct features, brand identity, and higher prices. Purchases of specialty goods
are often associated with a high level of emotional engagement and brand loyalty.
For example, luxury cars like a Tesla, high-end watches like Rolex or designer
handbags from brands like Chanel. The marketing team for a well-known luxury
fashion brand wouldn't need to create advertisements that compare their clothes to
other brands or even include detailed information. Instead, the brand's name and
reputation alone can encourage consumers to purchase their products. These
companies can focus more on building and maintaining customer relationships and
brand recognition than distinguishing themselves from other companies.

- The last type I want to talk about is the Unsought goods that are products that
consumers do not actively seek out or regularly think about purchasing. Often,
these goods require a significant amount of advertising and personal selling. The
 purchase of unsought goods is usually driven by necessity, emergencies, or the
realization of a future need.
Life insurance, funeral services, and fire extinguishers are common examples of this.
When advertising these items, marketing teams can focus more on reminding consumers
of their need for these items and building brand recognition that allows consumers to
purchase a specific brand with little thought. Some companies choose to feature reasons
why you need these items in their advertisements, creating a sense of security through the
purchase of their product. For example, a marketing team may advertise a flashlight by
showing a person using one in the event of a power outage.

Now that we've explored how marketers classify products based on consumer buying
habits, let's shift our focus to the business-to-business (B2B) world. While consumers
purchase products for personal use, businesses have their own unique set of needs and
purchasing behaviors.
So, let's briefly review the five different types of B2B products:
IV. Types of B2B products:
• Equipment refers to the products used to help with production activities. Heavy
equipment, sometimes called installations or capital equipment, includes items such as
the sophisticated robotics Ford uses to assemble automobiles. Installations are big-ticket
items and last for a number of years. Computers, photocopy machines, and water
fountains are examples of light or accessory equipment; they are portable, cost less, and
have a shorter life span than capital equipment.
• Maintenance, repair, and operating (MRO) products are products used to assist with
the operation of the organization but are not directly used in producing goods or services.
Maintenance products include light bulbs, mops, cleaning supplies. Repair products are
items such as nuts, bolts, washers, and small tools. Operating supplies include computer
paper and oil to keep machinery running smoothly. Although some firms use a sales force
to promote MRO products, others rely on catalog sales, the Internet, and telemarketing to
keep prices as low as possible.
• Raw materials are products of the fishing, lumber, agricultural, and mining industries
that organizational customers purchase to use in their finished products. For example, a
steel manufacturer changes iron ore into large sheets of steel that other firms use to build
automobiles and washing machines.
• Firms produce processed materials when they transform raw materials from their
original state. For example, several crops including corn and sugar cane can be processed
to create ethanol.
• In addition to tangible processed materials, some business customers purchase
specialized services from outside suppliers. These may be equipment based, such as
repairing a copy machine or fixing an assembly line malfunction, or non-equipment-
based, such as market research and legal services. These services are essential to the
operation of an organization but are not part of the production of a product.
• Component parts are manufactured goods or subassemblies of finished items that
organizations need to complete their own products. For example, a computer
manufacturer needs silicon chips to make a computer, and an automobile manufacturer
needs batteries, tires, and fuel injectors.