Product Classification: What It Is & Its Impact on Marketing Efforts (2023)

The other day, I roamed the aisles of CVS and picked up the same toothpaste I've been buying for years.

Product Classification: What It Is & Its Impact on Marketing Efforts (1)

I didn't think twice about it. I made the purchase on auto-pilot. I didn't consider testing out a different brand or purchasing one from another retailer.

Toothpaste, as it turns out, is known as a "convenience good," which consumers usually buy without putting too much thought into the brand or effort.

Understanding product classification is key to uncovering the reasons behind your consumers' general buying behaviors and how you can better market your products as a result.

There are four types of product classification. Let's dive into each type, so you can determine where your product falls.

What is product classification?

Product classification organizes products into four categories based mostly on consumer buying behavior, similarity to competing brands, and price range. Classifying products helps marketers develop strategies that target consumers' specific needs.

Product Classification in Marketing

Knowing the classification of a product is vital when devising a marketing strategy. Why? Well, it lets you know the mindset most consumers have and the behavior they exhibit when interacting with your product.

This knowledge arms you to devise an effective marketing strategy that will meet your consumers where they are. It also helps you decide on a realistic marketing budget.

For instance, say your products fall under the "unsought goods" classification (more on that in this section). This means that you’ll likely need to take a more aggressive marketing approach to reach consumers that may not have considered your product or brand.

Think of charity organizations, life insurance companies, and funeral homes. These are usually not top of mind for consumers. As such, these brands must work a little harder to be visible to consumers and highlight the benefits of their goods or services.

Shopping goods, on the other hand, are highly visible and very competitive. Consumers typically spend time comparing quality, cost, and value before making a purchase. That’s why building brand loyalty is vital for this product classification.

As you can see, there are factors to consider for every classification of product. The more familiar you are with consumer habits and beliefs for that category, the more equipped you will be to market your product.

What are the four classifications of products?

  1. Convenience goods.
  2. Shopping goods.
  3. Specialty goods.
  4. Unsought goods.
(Video) Product, Classification of Products, Type of Products, Consumer and Industrial goods, Marketing

There are four types of products and each is classified based on consumer habits, price, and product characteristics: convenience goods, shopping goods, specialty products, and unsought goods.

Let's dive into each one in more detail.

1. Convenience Goods

Like the Crest toothpaste example, convenience goods are products that consumers purchase repeatedly and without much thought.

Once consumers choose their brand of choice, they typically stick to it unless they see a reason to switch, such as an interesting advertisement that compels them to try it or convenient placement at the checkout aisle.

These products include gum, toilet paper, soap, toothpaste, shampoo, milk, and other necessities that people buy regularly.

To market a convenience good, you want to consider that most people will impulse buy these products. Placing your products near the checkout line at a store could be a good idea for these products — which is why you'll often find candy and gum at the front of a store.

Since most convenience products are priced low, cost and discounting isn't a major deciding factor when considering a purchase. I won't switch my toilet paper brand just to save a few cents.

For convenience goods, brand recognition is key. With this in mind, you'll want to implement widespread campaigns to spread awareness of your company if possible.

For instance, Charmin, the toilet paper brand, is a widely recognized brand in the United States — likely in part due to the company's consistent and long-term advertising strategy, dating back to the 1960's with the invention of the character "Mr. Whipple" who appeared on TV, print, and radio ads.

2. Shopping Goods

Shopping goods are commodities consumers typically spend more time researching and comparing before purchase.

They can range from affordable items, like clothes and home decor, to higher-end goods like cars and houses.

These are more one-off purchases with a higher economic impact.

For instance, while you will buy toilet paper over and over again for the rest of your life, you'll likely only purchase a house a few times at most. And, since it's an expensive and important purchase, you'll spend a good amount of time deliberating on it, attending different open houses, and comparing the pros and cons of your final selection.

The same can be said for smaller products. If you have an event coming up and you want to purchase a nice pair of shoes, this doesn’t fall under impulse purchases.

Instead, you'll want to try it on, consider whether the price is worth it, and even get input from your loved ones.

(Video) Understanding The Classification of Products to Design Marketing Efforts for a clearly defined

To market a shopping good, invest in content that persuades your buyer of your product’s value. It's important your marketing materials demonstrate how your product differs from the competition, and the unique value it provides consumers.

Price also plays a role in this product type, so the promotion of discounts and sales can attract consumers toward your brand.

3. Specialty Goods

A specialty good is the only product of its kind on the market, which means consumers typically don't feel the need to compare and deliberate as much as they would with shopping products.

A good example of this? iPhones.

I've been purchasing new iPhones for years, and I haven't paused to consider other smartphone models — because of Apple’s strong brand identity and the perception I have of its product quality.

When marketing a specialty good, you don't necessarily need to spend too much time convincing consumers that your product is different from competitors. They already know already.

Instead, focus on how your products are constantly innovating and improving. This will ensure your customers will remain loyal to your brand.

For instance, if Apple stopped making impressive improvements on their iPhones and promoting new features, I might consider switching brands. But since they've continued to impress me over the years, I've continued to purchase from them.

4. Unsought Goods

Finally, unsought products — goods that people aren't typically excited to buy. Good examples of unsought goods include fire extinguishers, batteries, and life insurance.

People will typically buy an unsought good out of a sense of fear or danger. For instance, you wouldn't go on the market looking for the "new and best" fire extinguisher. You'd only purchase one due to the fear of a potential fire. Alternatively, some unsought goods, like batteries, are bought simply because the old ones expired or ran out.

When marketing an unsought good, focus on reminding consumers of the existence of your product, and convincing consumers that purchasing your product will leave them with a better sense of security.

For instance, Duracell's Beach x Bear commercial encourages viewers to remember the importance of batteries in life-threatening situations, like impending bear attacks or when using a metal detector.

Product Classification Examples

1. Browndages

Browndages is a convenience goods brand that markets itself by highlighting its key feature: bandages for every skin tone.

Messaging like "The perfect bandage for brown skin," can be seen on the brand’s website, packaging and social media platforms, making it stand out against competitors like Band-Aid that typically focus its product’s medical benefits.

2. State Farm Insurance

Like many insurance companies, State Farm falls under the "unsought goods" product classification.

(Video) #3.3 PRODUCT | PRODUCT CLASSIFICATION | TYPES OF PRODUCT FOR B.COM 1st SEM NEP SYLLABUS | MARKETING

As such, brand and product awareness is a priority when it comes to marketing.

In its marketing efforts, State Farm, formerly AllState, positions itself as a reliable and trustworthy partner to rely on when bad things happen in your life.

In this example, the brand spotlights a fear many car owners have — a popular tactic used by unsought goods brands — while mentioning why trusting this brand will make things go smoothly.

3. Energizer

For many consumers, the first thing they think of when they picture batteries is a pink rabbit holding a drumset.

Similar to Charmin, Energizer created a brand mascot that consumers could easily recognize and remember: the Energizer Bunny.

Product Classification: What It Is & Its Impact on Marketing Efforts (3)Image Source

As a convenience good, Energizer needed to increase its brand recognition so that it could stand out among competitors in the store.

Now, the brand is widely popular and this is likely due to this marketing tactic.

4. Oui The People

For products under the "shopping goods" classification, it’s imperative that you identify ways to stand out among your competitors.

Why? Because, when shopping for these products, consumers compare everything: features, cost, value. As such, you must offer something that other brands don’t - whether that relates to your product features, brand values, or mission.

For Oui The People, sustainability is at the center of its brand.

Consumers who care about the environment will gravitate toward the brand because of its use of recyclable material for its products and packaging.

5. Pyer Moss

As mentioned before, when people purchase specialty products, they’re not looking to be convinced of their quality or value. That’s already clear.

What consumers are looking for instead is a brand identity they can relate to, a vision they identify with.

Luxury clothing company Pyer Moss attracts consumers with its refreshing and innovative take on fashion. The brand isn’t afraid to step outside of the norm while still remaining rooted in its heritage.

Now that you know where your product fits, use consumers' buyer behavior to inspire your next marketing campaign. Now it’s time to figure out how you can meet — and exceed — customers' expectations of your product.

Editor's Note: This blog post was originally published in August 2020, but has been updated for comprehensiveness.

Topics: Product Marketing

(Video) Marketing-Meaning of product, classification of product, levels of product

FAQs

What is product classification in marketing? ›

Product classification is a marketing and business term that categorizes products based on how and why consumers purchase them. These distinctions can change the way companies market their products and affect other aspects of sales, such as pricing and distribution.

What is the importance of product classification? ›

Classifying a product will let them determine the optimal method for distribution, promotion, and pricing. How a product is ultimately classified will determine how it will be marketed and sold to its customers. There are two (2) main categories of products; Consumer Products and Business Products.

What are the 4 classifications of products? ›

This process is known as product classification. Within the category of consumer products, there are four main classifications: convenience goods, shopping goods, specialty goods, and unsought goods.

What is a product and how is it classified? ›

Goods or products are classified as either consumer goods or industrial goods. Consumer goods are produced for the personal use of the ultimate consumer, while industrial goods are produced for industrial purposes.

What are the two bases of product classification? ›

Product Classification

Product can be broadly classified on the basis of (1) use, (2) durability, and (3) tangibility.

What are the 7 types of product? ›

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

What is the classification of consumer products? ›

Consumer goods can be classified as durable, nondurable, or service goods. Consumer goods are categorized based on consumer behavior and marketed by type of good, such as a convenience product or specialty item.

What is importance of product? ›

Product is the centre of all marketing activities, Without a product, marketing cannot even be imaged. Good products are the key to market success. Product decisions are taken first by the marketers and these decisions are the centre to all other marketing decisions, such as price, promotion, distribution etc.

How classification of services helps in developing the marketing strategy? ›

Classification of Service Marketing – On the Basis of Degree of Involvement of the Customer, Service Tangibility, Skills and Expertise Required, and a Few Others. We shall now distinguish between the various types or classes of services. Different types of services need different marketing strategies.

What are the basic classification of goods? ›

There are three main types of goods: existing goods, future goods, and contingent goods.

What are product characteristics in marketing? ›

Product characteristics are attributes of the product itself that need to be controlled. Examples of product characteristics are size, shape, weight, color, quality, hardness, etc. The list of product characteristics depends on your product and how its functional design requirements have been defined.

What are the 3 types of products? ›

Types of Products – 3 Main Types: Consumer Products, Industrial Products and Services. There are a number of useful ways of classifying products. One of the most basic way was the different ways of making a journey.

Why is it useful to classify product related needs into a small set of categories? ›

Classifying products into meaningful categories helps marketers decide which strategies and methods will help promote a business's product or service. Many types of classification exist. For example, marketers might categorize products by how often they are used.

What are the two classifications of goods and services? ›

Goods and services can be classified into two basic categories, i.e., free goods and Economic goods.

How many types of product are there in marketing? ›

20+ Types of Product Marketing
AdvertisingBranding
Product CultureProduct Depth
Product DevelopmentProduct Differentiation
Product EconomicsProduct Extension
Product ManagementProduct Variety
8 more rows
1 Oct 2017

What is the purpose and method of doing product classification? ›

Product classification or product taxonomy is a type of economic taxonomy which organizes products for a variety of purposes. However, not only products can be referred to in a standardized way but also sales practices in form of the “Incoterms” and industries can be classified into categories.

What is product type example? ›

A Product Type is the collection of attributes which act as a template for products of the same type or kind. For example, a clothing store might have the following Product Types: Pants. Shoes.

What is new product strategy in marketing? ›

An NPD strategy will help you organise your product planning and research, capture your customers' views and expectations, and accurately plan and resource your NPD project. Your strategy will also help you avoid: overestimating and misreading your target market.

What is new product in marketing? ›

'New products' can be: products that your business has never made or sold before but have been taken to market by others. product innovations created and brought to the market for the first time. They may be completely original products, or existing products that you have modified and improved.

What makes a product good quality? ›

Conclusion. Good products must have a solid value proposition and solve a real problem, be understandable by users, perform their task as easily and efficiently as possible, and become better and harder to part with the more they are used.

What is the significance of product in marketing? ›

Product Marketing can help product teams providing customer feedback and marketing insights. It can also help marketing & sales teams positioning well their products. Product Marketing is a key department to help organisations to increase leads generation and sales.

What are the features and benefits of a product? ›

Features are aspects of your product, which could be technical or descriptive. Benefits are why that feature matters for your customers. In other words, how that feature makes their life better. Features tell customers what, and benefits tell customers why.

What is the classification of consumer products? ›

Consumer goods can be classified as durable, nondurable, or service goods. Consumer goods are categorized based on consumer behavior and marketed by type of good, such as a convenience product or specialty item.

What are the 3 types of products? ›

Types of Products – 3 Main Types: Consumer Products, Industrial Products and Services. There are a number of useful ways of classifying products. One of the most basic way was the different ways of making a journey.

What are the two classifications of goods and services? ›

Goods and services can be classified into two basic categories, i.e., free goods and Economic goods.

How classification of services helps in developing the marketing strategy? ›

Classification of Service Marketing – On the Basis of Degree of Involvement of the Customer, Service Tangibility, Skills and Expertise Required, and a Few Others. We shall now distinguish between the various types or classes of services. Different types of services need different marketing strategies.

Why is it useful to classify product related needs into a small set of categories? ›

Classifying products into meaningful categories helps marketers decide which strategies and methods will help promote a business's product or service. Many types of classification exist. For example, marketers might categorize products by how often they are used.

What is the purpose and method of doing product classification? ›

Product classification or product taxonomy is a type of economic taxonomy which organizes products for a variety of purposes. However, not only products can be referred to in a standardized way but also sales practices in form of the “Incoterms” and industries can be classified into categories.

What are the five product characteristics? ›

5 Characteristics of a Good Product Description
  • Detailed. Good product descriptions tell customers the most important basics about a product. ...
  • Efficient. Though it's important to go into detail, you don't want your product description to read like a novel. ...
  • Illustrative. ...
  • Balanced. ...
  • Natural.
6 Apr 2017

What are the characteristics of products? ›

Product characteristics are attributes of the product itself that need to be controlled. Examples of product characteristics are size, shape, weight, color, quality, hardness, etc. The list of product characteristics depends on your product and how its functional design requirements have been defined.

What is new product strategy in marketing? ›

An NPD strategy will help you organise your product planning and research, capture your customers' views and expectations, and accurately plan and resource your NPD project. Your strategy will also help you avoid: overestimating and misreading your target market.

What is new product in marketing? ›

'New products' can be: products that your business has never made or sold before but have been taken to market by others. product innovations created and brought to the market for the first time. They may be completely original products, or existing products that you have modified and improved.

What is the classification of service? ›

Wherever people or products are involved directly, the service classification can be done based on tangibility. (i) Services for people: Like Health care, restaurants and saloons, where the service is delivered by people to people. (ii) Services for goods: Like transportation, repair and maintenance and others.

What are the classification of goods in economics? ›

Economists classify goods into three categories, normal goods, inferior goods, and Giffen goods.

What are the different types of goods? ›

There are four different types of goods in economics, which can be classified based on excludability and rivalrousness: private goods, public goods, common resources, and club goods.

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