Classifications of Products in Marketing: Consumer and Industrial Products!

A. Consumer Products:

Consumer products are the products purchased for ultimate consumption by the consumers for satisfying their needs. For example soaps, shoes, clothes, tooth pastes etc. They can further be divided on the basis of durability and shopping efforts involved.

1. Durability of Products:

The consumer goods can be classified into three parts on the basis of durability:


(a) Non Durable Products:

Non durable products are those consumer products which are consumed in one or few uses for example soap, toothpaste, shampoo, salt etc. These goods have a small profit margin, need heavy advertisement and should be easily available.

(b) Durable Products:

Durable products are the products with longer consumption period and uses. For example TV, refrigerator, coolers etc. These goods provide high profit margin, require greater personal selling efforts, after sales services etc.


(c) Services:

Services are intangible in form and refer to those activities, benefits or satisfaction which are offered for sale. For example postal service, hair cutting, tailoring, transportation etc.

Following are their main features:

(i) Services are intangible in nature.


(ii) Services can’t be stored.

(iii) Services are highly variable in that the quality of service provided by different people is different.

(iv) A service can’t be separated from its source.

2. Shopping Efforts Involved:

Consumer products can be categorized into following three parts on the basis of the time and efforts buyers are willing to spend for the purchase of a product:


(a) Convenience Products:

These products require minimum time and effort and are purchased frequently by the customers. For example bread, medicines, salt, sugar, jam etc.

(i) These products are easily available and require minimum time and effort.

(ii) They are available at low prices.


(iii) These are essential goods; so their demand is regular and continuous.

(iv) They have standardized price.

(v) The supply of these goods is more than the demand; therefore competition for these products is very high.

(vi) Sales promotion schemes such as discount, free offer, rebate etc. help in marketing of these products.


(b) Shopping Products:

These are the products that require considerable time and effort. For example clothes, jewellery, televisions etc. Before making final purchase, a consumer compares the quality, price, style etc. at several stores.

Following are the main features of these products:

(i) They are durable in nature


(n) These goods have high unit price as well as profit margin.

(iii) Before making final purchase, consumer compares the products of different companies.

(iv) Purchases of these products are pre planned.

(v) An important role is played by the retailer in the sale of shopping products.

(c) Speciality Products:

Speciality Products refer to those products which have certain special features due to which the buyers are willing to spend a lot of time and effort on the purchase of such products. These products have brand loyalty of highest order. For example designer clothes, hair styling, antique products, jewellery etc.


Following are the main features of specialty products:

(i) The demand for such products is relatively infrequent.

(ii) These products are very costly.

(iii) These are available for sale only at few places.

(iv) An aggressive promotion is essential for the sale of such products.

(v) Many of the specialty product require after sales service too.

B. Industrial Products:

The products which are used as inputs to produce consumer products are known as industrial products. For example raw material, machinery, tools, lubricants etc. These products are used for non personal & business purposes. Manufacturers, transport agencies, banks & insurance companies, mining companies etc. are the main parties involved, in marketing of industrial products.


Following are the main features of Industrial products:

(i) Number of Buyers:

Industrial Products have limited number of buyers as compared to consumer goods.

(ii) Channel Levels:

Since the number of buyers is limited, the sales take place with the help of shorter channels of distribution.


(iii) Geographic Concentration:

The demand for industrial products is concentrated at certain fixed geographical locations.

(iv) Derived Demand:

The demand for industrial products depends upon the demand for consumer goods, therefore the demand for industrial products is known as derived demand. For example demand for cotton fibre increases when there is increased demand for cotton suits, bed sheets etc.

(v) Role of Technical Considerations:

Technical consideration plays an important role in the purchase of industrial goods because these products are purchased for use in business operations.


(vi) Reciprocal Buying:

A company may purchase some raw material from another company and also may sell its finished good to the same company. Such a practice is known as reciprocal buying. For example, Tata may buy tyres and tubes from Ceat which may in turn purchase Tata’s trucks.

(vii) Leasing Out:

The prices of the industrial products are very high; therefore the companies prefer to take them on lease instead of buying.

Classification of Industrial Products:

Types of Industrial Product are as follows:


1. Materials and Parts:

These refer to the goods that completely enter into the manufacture of a product.

These are of two types:

(a) Raw Material:

These are of two types (i) agricultural products like sugar cane, wood, rubber etc. and (ii) natural products like iron ore, crude petroleum etc.

(b) Manufactured Materials and Parts:

These are of two types (i) component material like glass, iron, plastic etc. and (ii) component parts like steering, battery, bulb etc.

2. Capital Items:

These are the goods that are used in producing finished goods. They include tools, machines, computer etc. Capital items are classified into (a) installations like elevators, mainframe computers etc. and (b) equipments like hand tools, fax machine etc.

3. Supplies and Business Services:

These include goods like paints, lubricants, computer stationary etc. which are required for developing or managing the finished products. These are classified into (a) maintenance and repair items like paints, nails, solutions etc. and (b) operating supplies like oils, lubricants, ink etc.