Some of the types of product are:- 1. Durable Products 2. Non-Durable Goods 3. Consumer Products 4. Industrial Products 5. Goods, Services and Experiences 6. Convenience, Shopping, and Specialty Goods 7. Industrial Goods and Consumer Goods 8. Unsought Goods 9. Primary Goods 10. Semi-Manufactured Goods 11. Natural Goods 12. Agricultural Goods 13. Manufactured Goods.


Types and Classification of Product: Durable, Non-Durable, Consumer, Industrial, Natural and Few Other Types of Products

Types of Product – Top 3 Types: Durable, Consumer and Industrial Products

Type # 1. Durable Products:

According to durability, products can be classified into two categories:

1. Durable Products:

The products which are tangible and can be used repeatedly many a times are termed as durable goods. For example- television, refrigerator, clothes, machines, etc.

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2. Non-Durable Products:

The products which are tangible and perish within one or few uses are termed as non-durable products. For example- salt, pepper, soap, etc.

Type # 2. Consumer Products:

According to consumer’s shopping habits, products can be classified into following categories:

1. Convenience Products:

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These products which are purchased frequently, and immediately and with minimum efforts, are known as convenience products. For example- newspaper, toothpaste, washing-detergent, cigarette, tobacco, etc.

2. Shopping Products:

The products which customer purchases less frequently and after careful comparison, on the basis of suitability, quality, price and style, are known as shopping products. For example- major appliances, clothing, furniture, cars, etc.

3. Speciality Products:

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Those products that have brand identification or unique characteristics are known as specialty products. Buyers for these goods generally spend more time seeking the product they want than on comparing brands. For examples, cars, stereos, television, etc.

4. Unsought Products:

Those consumer products that are either not known to the consumers or even if they are known, customers generally do not have compelling impulse to buy them are known as unsought products. For example-Life insurance, blood donation, etc.

Type # 3. Industrial Products:

Those products that are purchased for further processing or for use in operating a business are called industrial products.

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They can be classified as:

1. Farm Products:

Products which are produced on farms and supplied as raw material to different organisations are termed as farm products. For example- wheat, cotton, livestock, vegetables, fruits, etc.

2. Natural Products:

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Products which are gift of nature are termed as natural products. For example- crude oil, fish, timber, iron-ore, etc.

3. Manufactured Products:

The products which have been manufactured but still, are used as products for further industrial use are known as manufactured products. For example- pig-iron is converted in steel and then steel is further used for making bars, utensils, etc.

4. Supplies:

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Any short-term good or material which is necessary for the day-to-day operations of a business is termed as supplies. Supplies are of two types-operating {e.g., lubricants, coal, typing paper, etc.) and maintenance (e.g., paint, nails, brooms, etc.)


Types of Product – Goods, Services, Experiences, Convenience, Shopping, Specialty Goods, Industrial Goods and Consumer Goods

Dealing with things individually is complex and time consuming. Imagine how difficult it would be to deal with the study of organisms in the absence of classification. Categorization makes interpretation and comparison easier and thereby reduces cognitive burden.

Classification is the process of dividing things into different subgroups on the basis of similarity. Intra-group similarity permits generalization of strategies across members within a category.

Products can be classified in the following three ways:

Type # 1. Goods, Services and Experiences:

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One of the most common taxonomies is the classification of product into goods and services. This categorization is based on tangibility aspect of the offering. For instance, salt can be touched, seen, and felt as compared to marriage advice given by a counsellor.

Salt, therefore, like other tangible objects, is a ‘good’ product and advice of the counsellor is a ‘service’ product. One crucial difference between good and service is the transfer of ownership. When a good is bought, its ownership is transferred to the consumer.

By making payment for a car or refrigerator the consumer gets the ownership of these goods. However, service is an act, deed, or performance of a provider, which could be a human being, a machine, or a combination thereof, whose ownership cannot be transferred to the consumer.

For example- ownership of a hotel, school, or bank is not gained when their services are bought. Goods differ from services on four aspects, namely – (i) tangibility (i.e., goods are physical and concrete while services are abstract and invisible), (ii) separability (i.e., goods are separate from the maker while services and creator cannot be separated), (iii) variability (i.e., goods can be standardized while it is difficult to make services consistent) and (iv) perishability (i.e. goods can be stored while services perish if not consumed).

Beyond products and services, a new term ‘experience’ has got added to marketing lexicon. This was prompted by pervasive commoditization of goods and services. Goods and services are hard to differentiate in terms of their features and benefits. To counter the effects of parity and resultant customer indifference, marketers found refuge in staging experiences.

A product or service used for solving a problem fails in loyalty generation. A good or service must create a memorable experience with a lasting impression. Buying a product can be a bland, rational, and unexciting transaction between the consumer and seller. The same can be orchestrated into an experience in which engagement is extended to encompass senses, feelings, and emotions.

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For instance, buying shoes at a store can be rational or cognitive experience in which product is evaluated, tried, and paid for. A smart marketer can however convert this event of selling or buying into a well-orchestrated event in which the consumer’s interaction with the organization goes on to include delivery on consumer senses, emotions, and behaviours.

Consumption events that are recalled from memory are the ones that are ‘memorable’ or worth remembering for being unusual and special. Buying events or service usage sink into oblivion for their ordinariness, but the ones that arouse feelings and senses remain memorable.

Classification of market offerings in a rigid manner is strategically undesirable. A narrow perspective of what is offered as good or service is myopic. It prevents the marketer from seeing and visualizing reality from the customer’s point of view. Customers are interested in the satisfaction of their needs and wants.

However, many marketers may wrongly believe that customers are interested in products and services. For customers, products and services are for their instrumentality in taking them out of a dissatisfactory state. They are not concerned with products per se; rather their interest lies in satisfaction of their needs and wants.

Benefits are what interest them. For instance, purchaser of a drill does not buy the drill rather he buys ‘holes’ and buyer of a movie is not buying movie as an object rather what he is looking for is ‘entertainment’.

It is rare to find a pure service or pure product. Most available product offerings are based on a combination of goods and services. Among these, five types can be distinguished. First, pure physical or tangible products without any service element, such as salt, coffee, or toothpaste.

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Second, a tangible product may come with some intangible component in the form of services, for example automobile, refrigerator, and computer. Here, the basic offering of the marketer is the physical product; the service element is added to make the product customer-friendly. The service here is a product enhancer and makes it more attractive to the market.

The product-accompanying services in the form of delivery, repairs, maintenance application aids, training, and installation become more important as the product grows more sophisticated in terms of the technology employed. Therefore, when one markets a product (e.g., car or computer) the services that accompany these become critical drivers of customer satisfaction and competitive advantage.

Some products combine both tangible and intangible components in almost equal measure, for instance, fast food restaurants like McDonald’s offers tangible component like a burger or wrap which is combined with fast and efficient service. In some cases, the marketed product may have dominant service element accompanied by a minor physical product.

This holds true for budget hotels and airlines. At the other extreme of goods dominant offering are pure services, in which the product consists of predominantly intangible service like legal advice and consulting.

Type # 2. Convenience, Shopping, and Specialty Goods:

This classification of consumer goods is based on consumer cognitive and buying behaviour. There are three components linked to consumer buying, namely consumer knowledge, evaluation, and act of buying. Goods can be classified into three categories according to consumer behaviour, namely convenience, shopping, and specialty goods.

i. Convenience Goods:

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Goods falling in this group are bought by a consumer purely on the basis of convenience. This means that the buyer is reluctant to put in any cognitive or behavioural effort in his buying. Goods are that bought on convenience basis are generally either of low personal significance or are undifferentiated. These are problem avoidance goods that include salt, detergent, incandescent bulb, soft drink, and cigarette. Convenience goods are typically of low value and are bought frequently.

Implication for marketing of this type of goods is that since these are bought on convenience basis, distribution must ensure their widespread availability. Lack of differentiation among brands requires that its price should be in line with other players. A price reduction may result in gaining significant share advantage.

These products are widely consumed and therefore the focus on promotion should be to reach out to every prospect and build brand awareness. Ease of brand recall increases likelihood of purchase.

ii. Shopping Goods:

These goods are ‘shopped’, which means these are not bought casually and on the basis of convenience. Due to their infrequent purchase, consumer does not enjoy enough information to buy them automatically. This category of goods includes television, washing machine, furniture, clothing, jewellery, and paint.

The ‘shopping’ efforts by consumers are directed towards making a correct choice on the basis of information and comparisons. Two unique characteristics of shopping goods are infrequency of purchase and high price. Infrequency does not allow buyers to become fully knowledgeable and high price creates high risk, which necessitates comparison between alternatives.

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Since shopping goods are less frequently bought and are high price purchases, there is no need for distribution to be extensive. The emphasis of promotion should be on building brand preference by linking product characteristics with consumer buying criteria.

Further, selling efforts at the point of purchase should complement promotion efforts in winning consumers. Accordingly, sales people should be trained in the art of persuasion.

iii. Specialty Goods:

The term ‘specialty’ is derived from special that means something unique or distinctive. The good in question is highly distinguished and unique and enjoys strong identification with a select group of consumers. Goods in this category are highly priced. Its product uniqueness is usually a function of its craftsmanship, ingredient, heritage, or image.

For instance, brands such as Rolex watch (heritage), Harris Tweed (hand woven), Rolls Royce (customized), and Montblanc pens (handmade) fall into this category. These goods do not involve comparison because their specialty or uniqueness makes them beyond comparison. These products are pre-sold.

The buyer of a specialty good is willing to devote time and energy to locate a coveted brand. Therefore, distribution should be restricted to a very limited number of outlets. Wider distribution runs counter to the concept of specialty. The promotion for specialty goods should focus on building connections based on consumer identity or its unparalleled uniqueness.

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The selling point’s ambience, decor, and sales personnel’s attitude and skills must be in sync with the brand’s core proposition. For instance, Bentley Motors has only one showroom in New Delhi located in the premises of hotel The Ashok.

Type # 3. Industrial Goods and Consumer Goods:

Industrial goods are sold to industrial or business customers and used as inputs. Here, two things are to be noted. First, the target market for industrial goods is not end consumers rather businesses and second, they serve as inputs for making an end product.

In other words, these goods are ‘means’ for the production of ‘end’ products. Consider the example of Intel. Intel markets a range of processors to computer and mobile phone makers like Lenovo, which are used by them to make end products. The market for industrial products is huge because all products that are consumed by consumers are made by industrial houses that bank upon industrial product marketers for their supplies.

A typical computer manufacturer relies upon different industrial product suppliers for materials, parts, machines, and consumables. These include motherboard, microprocessor, mouse, cords, ports, drives, nuts, bolts, cases, packaging material, printing ink, and small fans.

Industrial products can be classified into the following categories:

i. Raw Materials:

Raw means unprocessed and untreated material. For instance, potatoes, salt, and cooking oil are raw material for a company that produces chips such as Lays and Bingo. Similarly, meat is raw material for a salami maker and earth is raw material for a brick maker. Raw material is worked upon and processed for creating end product.

ii. Manufactured Parts:

Some of the raw materials take the form of manufactured parts or components. For example- car companies use manufactured parts such as tyres, batteries, lamps, pistons, radiators, and air conditioning assemblies to produce cars. These parts are not fashioned or processed further, rather they are assembled into the final product as they were.

However, some of the manufactured materials are ‘worked upon’ or further processed to make an end product. For example- cotton yarn is processed to make apparel or iron rods and wires are used by fabricators. Component or part can be distinguished from material by whether these undergo change or not. Components are used without any change in the end product, while materials undergo a change.

iii. Capital Items:

This category of industrial products includes capital items that are used in the production process. What sets apart capital items from others is that these are long-term assets such as plant, machinery, and equipment.

For instance, assembly line or welding robots in an automobile factory are capital items that last for years and help produce revenue. Capital items can belong to a factory or an office. For example- a lift truck or welding machine belongs to a factory, while a computer or fax machine belongs to an office.

iv. Supplies:

Products in this category are usually indirect items that contribute to the production of end product. These products are also called consumables. Supplies are hygiene requirements whose presence does not matter but their shortage can have a significant effect.

For instance, oil and grease used for machine lubrication is hardly paid attention to but an un-lubricated machine can significantly affect productivity. A small price item like cotton cloth is used to wipe out dust during quality inspection process of a car, but the price of cotton does not indicate its significance in the quality process.

Supplies that are used in office include paper, mops, cleaners, pencils, and files. Supplies are also used in services. For example- repair and maintenance service are part of this category.


Types of Product – Consumer Goods and Industrial Goods

The substantial influence of product characteristics on marketing strategy has led marketing scholars to search for meaningful ways to classify products. Thus, a good classification can help the firm in product innovation and marketing policies. Moreover, product characteristics play a significant role on effective marketing strategy.

Products are basically divided into two:

1. Consumer goods, and

2. Industrial goods.

Type # 1. Consumer Goods:

Philip Kotler has defined consumer goods as “goods destined for use by ultimate consumers or householders and in such form that they can be used without commercial processing”. Examples of consumer goods are tooth paste, tooth brush, furniture, automobiles, soaps, detergents etc. The simple meaning of consumer goods is that they are meant for use by the ultimate consumer or households in the available form without further processing.

Consumer goods can be sub-divided into three types:

a. Convenience goods

b. Shopping goods, and

c. Specialty goods.

a. Convenience Goods:

According to the definition given by the American Marketing Association consumer goods are “those goods which the customer usually purchases frequently, immediately and with the minimum of effort in comparison and buying”. Examples are newspapers, magazines, food products, soap, detergents, tobacco products, etc.

b. Shopping Goods:

The American Marketing Association defines shopping goods as “those goods which the customer in the process of selection and purchase, characteristically compares on such bases as suitability, quality, price and style”. Examples are furniture, clothes, shoes, automobiles, two wheelers, computers etc.

c. Speciality Goods:

The American Marketing Association defines speciality goods as “those consumer goods with unique characteristics and or brand identification for which a significant group of buyers are habitually willing to make a special purchasing effort”. The specific features of speciality goods are that they are affordable only to a significant group of buyers with specific features. Examples are designer clothes, designer shoes, designer jewellery, etc.

Type # 2. Industrial Goods:

Industrial goods are defined as “goods which are designated to be sold primarily for use in producing other goods or rendering services”. In the case of industrial goods the buyer’s motive is to use it for some manufacturing process or to render some service. Examples are paper, diamonds, gold, silver, etc. Gold is used for making jewellery, paper is used in printing and the consumers are not buying industrial goods for ultimate consumption. Industrial goods are not bought for ultimate consumption by buyers.

But no product may be exclusively classified as consumer goods or industrial goods. For example- Maida is a consumer product when bought by a housewife for cooking purpose, but if it is bought by an hotelier or bakery unit, who buys it as input and sells it to the ultimate consumer as a different product.

The rationale of classifying goods into consumer goods and industrial goods is the divergence in buying motives, approaches, and attitude in respect of these two sets of products. An industrial product buyer is more cost, quality, standard conscious and more deliberative than a consumer product buyer.

For example- a manufacturer may not be willing to sacrifice qualities and cost because it will affect the ultimate product. But a consumer goods customer is said to be more. Impulsive and under psychological pressures while taking purchase decisions. Thus, marketing policies and strategies should be designed separately for consumer goods and industrial goods.

Durable and Non-Durable Products:

Consumer Products and Industrial Products can also be classified as:

(a) Durable products

(b) Non-durable products, and

(c) Services.

(a) Durable Products:

Durable products are those tangible products which normally serve many years, for example machinery, cars, scooter, furniture, refrigerators and air conditioners.

(b) Non – Durable Products:

Non-durable products are those tangible products which are normally consumed in one or a few uses. Examples – chocolates, soaps, cornflakes, food items, lubricating oils, etc.

(c) Services:

Services are those intangible products like activities or benefits which are offered for sale. Some examples are the services of doctors, lawyers, teachers, chartered accountants, banks, financial institutions, insurance agencies, etc.


Types of Product – 2 Broad Division: Goods and Services

Products are classified in various ways by various people but before we look into the classification of products, we must understand what a product is.

Products are classified broadly into two parts:

1. Goods:

These are tangible in nature and one can touch them, taste them, and they have definite form. The quality of goods can be objective in nature and to the consumer’s specifications. E.g., TV, motorcar, houses, clothes, food, medicines etc.

2. Services:

Are intangible in nature and can be only felt/experienced but cannot be touched. The quality is subjective in nature. E.g. Tailoring, transport, hospitality, cooking, nursing etc.

Goods are further classified as follows:

I. Industrial Goods:

Industrial goods are the goods that are required in the manufacture of industrial products. Industrial products are further classified as-

(a) Raw Materials:

Raw materials are directly consumed in the manufacturing process and may or may not change their form during the manufacturing process. E.g. Chemicals, cotton yarn, food grains, fruits and vegetables, metals etc.

(b) OEMs:

OEMs are the original equipment fitted into the final product and are purchased from other manufacturers. E.g. Tyres of automobiles, speedometers, computer processors, compressors in air conditioners/refrigerators etc.

(c) Machinery:

For any industrial production, machinery needs to be installed. This machinery is purchased once at the beginning of the production and is not a recurring requirement.

(d) Maintenance Products / (Spares & Tools):

These are products that are required to keep the machinery in working condition.

II. Consumer Goods:

Consumer goods are the products used by the end consumer.

Consumer goods are further classified as:

1. Durables:

Durables are the products of which the frequency of purchase is less and the life span is comparatively longer. Durables were also termed as white goods earlier as most of them (refrigerators, air conditioners were white in colour). Currently, the conditions have changed and these products come in various colours.

Most of the durable products are being sold as FMCG (fast moving consumer goods) as the frequency of purchase and replacement of these products has increased to very high levels. Even products like housing and furniture are purchased frequently by many consumers bringing them nearer to the non-durable category.

2. Non-Durables:

The life spans of non-durable products are shorter and they are purchased frequently. These goods are also called FMCG goods.

(a) Shopping Goods:

These are the products that are purchased on impulse. Many times, these products are purchased without any particular need to buy them. E.g. Men’s accessories, textiles, lady’s purses/hand bags etc.

(b) Desirables:

These are purchased not out of necessity but due to desire. This includes products like jewellery, perfumes, etc.

(c) Consumables:

These are products of routine necessity and are purchased frequently. These goods may further be classified into food, cosmetics, pharmaceuticals, hosiery, textiles, toiletries etc.

III. Services:

Services are gaining importance day by day.

There are two reasons for this:

I. Demand for services is constantly increasing leading to services becoming a major part of the economic growth of India as a nation, and also in most of the developing countries.

II. Many commercial activities which were earlier not being considered as service activities are getting classified as services and so need to be treated as services by the operators to ensure growth and consumer satisfaction.

E.g. Distribution, supply of contract labour, providing tuition or coaching, professional education not under UGC (University Grants Commission) or AICTE (All India Council for Technical Education) etc.


Types of Product – Consumer and Industrial Products

Products can be broadly classified on the basis of the objective of purchase. The products purchased by consumers for direct consumption are called as Consumer products and the products which are purchased for commercial use are called as Industrial products.

Let us learn in more detail about the various types of products:

Type # 1. Consumer Products:

Consumer products are products purchased by the ultimate consumers or users to satisfy their personal needs and wants.

Examples of consumer products – Buying a chocolate, or a reference book to prepare for exams.

The consumer goods are further classified on the basis of two important factors:

(i) The Extent of Shopping Efforts Involved:

On the basis of time and effort spend by buyers the consumer products can be classified as follows-

(a) Convenience Products:

The consumer products bought frequently with an aim of immediate consumption without spending too much time and effort to purchase the same are called as con­venience products.

Some characteristics which classify consumer products as convenience products are:

(1) They are purchased from locations convenient to consumers spending very little time and effort.

(2) They are bought frequently thus have regular and continuous demand.

(3) These are low unit-value products purchased in small quantities.

(4) The products are usually branded, standardized and graded.

(5) There is a large number of suppliers resulting in high competition, therefore, marketing requires huge amount of advertising.

(6) The products are competitively priced with very low profit margins.

(7) Marketing of these products is generally done through sales promotion techniques like discounts, free offers, contests etc.

(8) Customers prefer to buy from the closest or convenient location thus there is no location loyalty.

Examples of convenience products are biscuits, books, newspapers etc.

(b) Shopping Products:

Shopping products are the products which consumers buy after com­paring the quality, price, style, suitability etc. thus a lot of time and effort is spent before making the final purchase.

Important characteristics of shopping products may be listed as follows:

(1) They are durable goods surviving more than one use.

(2) Their unit price and profit margins for seller is high.

(3) Buyers compare price of competitors before making final decision to purchase the product.

(4) Purchases of such products are not frequent and require pre-planning.

(5) Sale of these products is mainly through retailers who persuade and convince customers to purchase the products.

Examples of shopping products – Television, mobile phones, jewellery, furniture etc.

(c) Speciality Products:

Speciality products are the consumer products which have certain special features thus have brand loyalty of the highest order with significant number of buyers. Purchasing of these products require time and special efforts.

Some of the important characteristics of speciality products are:

(1) These products offer special and specific features.

(2) The demand of these products is relatively small and irregular.

(3) These products are usually expensive with high unit price.

(4) These products are available at selected places.

(5) Shopping of such products involve lot of time and require special efforts.

(6) Marketing of these products require aggressive promotion to create product awareness among target customers.

(7) The demand for such goods does not get affected with change in price.

(8) These products require after sale services.

Examples of speciality products – Antiques, paintings of renowned artist, hair stylist, music composer etc.

(ii) Durability of Products:

On the basis of durability products may be classified as durable, non-durable and services.

(a) Non-Durable Products:

Non-durable products are the products which are used or consumed in one or few uses.

Non-durable products have the following characteristics:

(1) They command low unit price.

(2) They are sold with aggressive marketing and at low margins.

(3) They are available at locations convenient to target customers.

Examples of non-durable products – Toothpaste, biscuits, glue stick, body spray etc.

(b) Durable Products:

The products which can be used more than once and survive for a long period of time are called durable products.

The main characteristics of durable products are:

(1) They command high unit price and are sold at high profit margin.

(2) They are used for a longer period of time.

(3) They require aggressive marketing and personal selling efforts.

(4) They require after sales services from the seller.

Examples of durable products – Television, motor-cycle, mobile phone, laptop etc.

(c) Services:

Services are the intangible products. They are the activities, benefits or satisfactions which are offered for sale.

The distinguishing features of services are:

(1) They are intangible i.e., they cannot be touched or seen but can be felt.

(2) They are inseparable from its source i.e., services cannot be separated from its provider.

(3) They cannot be stored and provided at a later date.

(4) They cannot be standardized or graded. The quality and type of service depends on the service provider.

The level of satisfaction depends on the service provider and the service receiver. Thus level of satisfaction differs from individual to individual.

Examples of services – Services provided by a tutor, a lawyer, a post office, a bank, a doctor etc.

Type # 2. Industrial Products:

Industrial products are those products which are used as inputs for producing other products. These products are meant for business or commercial use only.

The important characteristics of industrial products are:

(1) They are used for commercial purposes only.

(2) The number of buyers for industrial products is limited as compared to consumer products.

(3) The sale of industrial products use shorter distribution channels. They are usually sold through personal or direct selling.

(4) The buyers of industrial products are located in specific regions thus is geographically concentrated.

(5) The demand for industrial products is a derived demand as it depends on demand for consumer products.

(6) Technical specifications are significant while purchasing industrial products.

(7) The sale of industrial products follows reciprocal buying practice. A company selling raw material to another company and may buy finished goods from the same company. Therefore, both companies act as buyer and seller to each other.

(8) High product cost may lead to companies preferring to lease rather than purchase industrial products.

(9) The main buyers of industrial products are manufacturers, transport agencies, insurance companies etc.

Examples of industrial products – Raw materials, lubricants, tools etc.

Classification of Industrial Production:

The industrial products may be classified as follows:

(i) Material and Parts:

The products which are completely used to produce goods are called materials and parts.

These products are of two types:

(a) Raw materials including farm products like sugarcane, oil seeds, minerals, fish etc.

(b) Manufactured material and parts include the component materials like plastic, iron, glass, fabric etc. and component parts like tyre, nails, battery, electric bulb etc.

(ii) Capital Items:

The goods which are used in the production of finished goods.

These goods include:

(a) Installations-Goods used to support production process like elevators, cranes, mainframe computers etc.

(b) Equipments- Goods used in the production process like machines, personal computers, tools, etc.

(iii) Supplies and Business Services:

Goods and services which facilitate development and management of finished goods are called as supplies and business services. They are consumed within a short period of time.

These goods and services include:

(a) Maintenance and Repair items – It includes items like paints, nails, tools etc. used to maintain and repair the capital equipment.

(b) Operating supplies – It includes items like lubricants, stationery required to run the capital equipment.


Types of Product – Classification of Products on the Basis of Durability, Tangibility and Use

Product can be classified on the basis of:

1. Durability and Tangibility

2. Use

1. Classification Based on Durability and Tangibility:

On this basis there can be three classes of products:

1. Non-Durable Goods:

Tangible goods that are normally consumed in one or few use e.g. soap, shampoo, milk, vegetables, pen etc. Because these goods are consumed quickly and are purchased relatively frequently, the appropriate strategy with regard to these goods is –

i. Make them available at many locations.

ii. Charge only a small markup.

iii. Advertise heavily to induce trial and build preference.

2. Durable Goods:

These are tangible goods that normally serve many uses e.g. Refrigerators, mechanical tools, clothing etc.

They require:

i. More personal selling and service

ii. Command higher margins

iii. Require more seller guarantee.

3. Services:

They are:

i. Intangible

ii. Inseparable

iii. Variable

iv. Perishable.

Therefore they require:

i. More quality control

ii. Supplier credibility

iii. Adaptability

For example, a haircut, consultancy, medical helps, etc.

2. Classification Based on Use:

1. Consumer Goods:

Goods that are used mainly for domestic purposes and are not used for any further commercial purposes.

They can be further divided into following classes:

(a) Convenience Goods:

Their features are:

i. Frequently purchased

ii. Immediately purchased with minimum efforts

They can be further classified as:

(i) Staples – Goods purchased on a regular basis e.g. food products.

(ii) Impulse Goods – Goods that are purchased without any planning or search efforts. They are the goods purchased because they happened to be there when the customer saw them and decided to buy them.

(iii) Emergency Goods – Goods that are purchased when need is urgent, e.g. an umbrella, if there is a sudden rainstorm and you are not prepared for it, or a medicine in case of a medical emergency.

(b) Shopping Goods:

Goods that the customer, in the process of selection and purchase, characteristically compares on such basis as suitability, quality, price and style. E.g. furniture, clothing etc.

They can be further classified as:

(i) Homogeneous shopping goods – These are the goods that are similar in quality but different enough in price to justify comparisons.

(ii) Heterogeneous shopping goods – These are the products that differ in product features and services that may be more important than price

The seller must carry wide assortment to meet individual preferences

The seller must have well trained sales people to inform and advice customers.

(c) Specially Goods:

Their features are:

They have unique characteristics or brand identification for which a sufficient number of buyers are willing to make special purchase efforts, e.g. cars, stereos, men’s suits etc.

(i) They do not invoke making comparisons

(ii) Buyers invest time to reach dealers

(iii) Dealers do not need convenient location.

(iv) However they must let prospective buyers know their locations.

(d) Unsought Goods:

Their features are:

(i) The consumer does not know about or does not normally think of buying, e.g. smoke detectors, life insurance, cemetery plots, gravestones, encyclopedia etc.

(ii) Require advertising and personal selling support.

2. Industrial Goods:

Goods that are normally purchased by individuals and organizations for further processing or for use in conducting a business.

They can be further divided into following classes:

(a) Materials and Parts:

Their features are:

(i) It includes raw material, manufactured material and parts

(ii) They are mostly sold directly to industrial users

(iii) Their price and service are the major marketing factors

(iv) Branding and advertising tend to be less important.

(b) Capital Items:

Their features are:

(i) Industrial products that aid in the buyers production or operations including installation and accessory equipments.

(ii) Installations consist of buildings, fixed equipments etc.

(iii) Accessory equipments include portable factory equipments and tools, office equipments like fax etc.

(c) Supplies and Services:

Their features are:

(i) Includes operating supplies like coal, lubricants, paper, pencils etc. It also includes repair and maintenance items i.e. paints, nails etc.

(ii) Supplies are the convenience products of the industrial field because they are usually purchased with a minimum effort or comparison.

(iii) Business services include maintenance and repair services e.g. computer repair etc. and business advisory services i.e. legal, management consulting, advertising etc.


Types of Product – Classification of Products: On the Basis of Durability, Process, Nature and Utility

Products can be classified on the basis of durability, process, nature and utility.

In detail they can be studied as follows:

1. Classification on the Basis of Durability:

A product can be segregated in two classes on the basis of durability, i.e., durable goods and non-durable goods.

i. Durable Goods:

Goods that can be used for a longer duration are called durable goods. For e.g., furniture, vehicles, TV, house, etc.

ii. Non-Durable:

Goods that can be used for a relatively shorter period of time are called non-durable goods. Some non-durable goods can be used only once. For e.g., fruits, vegetables, fish, chicken, dairy products etc. However, some non-durable goods can be used more than once. For e.g., soap, clothes, cosmetics etc.

2. Classification on the Basis of Process:

Products can be segregated as primary goods, semi-manufactured goods and manufactured goods on the basis of process.

i. Primary Goods:

Goods that are consumed in their original form, without any processing are called primary goods. For e.g., fruits, vegetables, coal etc.

ii. Semi-Manufactured Goods:

Goods that require further processing before they can be consumed are known as semi manufactured goods. For e.g., paper, cloth, etc.

iii. Manufactured Goods:

Raw-materials are converted into finished output by means of a process. Such finished output is termed as manufactured goods. For e.g., furniture, pen, mobile phone, car, medicines etc.

3. Classification on the basis of Nature:

Products can be classified into three types on the basis of their nature.

They are as follows:

i. Natural Goods:

Goods obtained as a gift from nature are called as natural goods. For e.g., coal, water, trees etc.

ii. Agricultural Goods:

Goods that are cultivated on the agricultural land are called agricultural goods. For e.g., wheat, rice, vegetables, fruits, raw cotton etc.

iii. Manufactured Goods:

Goods produced by industry with the help of manpower and machines are called manufactured goods. For e.g., furniture, pen, mobile phone, car, medicines etc.

4. Classification on the Basis of Utility:

Products can be classified as consumer goods and industrial goods on the basis of their usefulness.

i. Consumer Goods:

The goods that are demanded by the customers for the satisfaction of their individual wants are called as consumer goods. For e.g., pen, soap, medicines etc.

They are further classified as:

a. Convenience Goods:

Consumer goods that are used for satisfying necessities of life, demanded regularly and easily available at the market place are called convenience goods. For e.g., newspaper, milk, groceries etc.

b. Specialty Goods:

Consumer goods that symbolize a luxurious lifestyle are called as specialty goods. They grab attention and showcase the latest trends in superior lifestyle. For e.g., expensive perfumes, cosmetics, shoes, apparels etc.

c. Shopping Goods:

Consumers give a lot of thought while purchasing certain goods such as – sarees, furniture, clothes etc. They usually compare factors such as- design, texture, price, colour, size etc., while purchasing them. Such goods are called shopping goods.

ii. Industrial Goods:

Goods that are required for manufacturing other goods are called industrial goods. For e.g., machinery, spare parts, equipment and tools etc.


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