PRODUCT AND ITS CLASSIFICATIONSBy: group 6

WHAT IS A PRODUCT? “ … the need satisfying offering of a firm …”

what you buy, that satisfies what you want to be able to do

CONT… It can be “good feeling” cause you bought some

cosmetics and someone said you looked pretty

It could be a happy stomach cause you bought a meal that tasted great

It could be easier homework cause you bought new software for your computer

CONT.. “Most customers think about product in terms of the

total satisfaction …”

this can lead to statements such as “we don’t sell cars, we sell safety ! “

we don’t sell houses, we sell homes

PRODUCT MIX / PRODUCT LINES

PRODUCT MIX

“A product mix is all the product lines … that the company sells…”

The combination of product lines offered by the manufacturer

CONT..

PRODUCT LINES

A series of related products

a group of products that are physically similar in performance, use or features and intended for a similar market

“… a set of products that are closely related…”

SERVICE PROVIDER

Service providers have product lines and product mixes

as well. Standard Chartered Credit Card banks Telephone services ISPs - internet service providers Airlines, first class, economy class

CONSUMER GOODS CLASSIFICATION

1. Convenience

2. Shopping

3. Specialty

4. Unsought Products

CONT… ConvenienceConvenience goods and services

things consumer wants to buy frequently minimum effort, low risk small amount of money, not much time

ShoppingShopping goods and services “stuff” people buy after they “shop & compare”

SpecialitySpeciality goods and services jewellery, special clothing special entertainment

UnsoughtUnsought things people don’t want to buy, but have to eg. Auto

insurance, funeral plan

ConvenienceConvenience goods and services things consumer wants to buy frequently minimum effort, low risk small amount of money, not much time

Three types

1. Staples - bought routinely e.g. milk, eggs

2. Impulse products - unplanned purchases e.g. chocolates

3. Emergency products - bought immediately e.g. Umbrellas.

ShoppingShopping goods and services “stuff” people buy after they “shop & compare” they have the time to compare prices Homogenous - stuff that is the same

simply pick the lowest priceeg. Condensed milk,

Heterogeneous - stuff that is different, so the customer will take time to compare features and prices- “some retailers carry competing brands”

SpecialitySpeciality goods and services jewellery, special clothing special entertainment “Willingness to search, not extent of searching, makes

it a specialty product” if people are willing to look and look at different

products, before they commit, it is a specialty item

UnsoughtUnsought things people don’t want to buy, but have to eg. Auto

insurance. The only way to sell this is to convince people of the

benefit because the benefit is not easily seen by the average person.

DISTRIBUTION STRATEGIES

Various factors govern the choice of appropriate channels. These include: Type of products Experience of the company Marketing facilities available within the company Availability of middlemen Finance and cost.

The various possibilities of distributing products currently adopted fall very much along the lines of various basic channel patterns. They are as follows: M-A-W-R-C M-W-R-C M-A-R-C M-R-C M-A-C M-C M-Direct Selling Organisation-C

M-Manufacturer; A-Agent; W-Wholesaler; R-Retailer; C-Consurner.

CONT… Convenience Goods

These are used more or less regularly by large number of consumers e.g. detergents, soap, soft drinks and many other household items. Manufacturers usually adopt an intensive and extensive distribution strategy

Usuallly adopt M-A-W-R-C or M-W-R-C pattern. e.g. Vicks, Pepsi,

CONT… Shopping Goods

These are purchased not so regularly as convenience goods, therefore, fewer retail outlets are necessary e.g. cosmetics, shoes, watches and electrical goods like TV, refrigerators, fans etc. The manufacturer usually adopts a selective distribution strategy, that is, by selecting only a limited number of retail outlets in each area

Usually adopt M-R-C pattern. e.g. VIP luggage, Whirlpool refrigerators

Specialty Goods These items are very infrequently purchased. The

manufacturer may appoint an exclusive agent in each territory or town to sell to consumers.

Usually adopt M-A-C or M-R-C pattern. e.g. Cars or air travel tickets by travel agents.