Clearly no two products are exactly alike and therefore each merits a unique marketing strategy. However, certain products carry similar characteristics in terms of price level, similarity between competing brands, and the way consumers approach them in the buying process. It is often useful to group these similar products into categories in order to help set up marketing strategies for each segment. 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. This article will describe characteristics of goods in each category, provide examples, and discuss relevant marketing strategies. Additionally, it will touch on the validity of this model of product classification as a useful input for developing marketing strategy.
These are products that consumers purchase often and habitually, without much thought given. Convenience goods usually are low-cost items with little differentiation between brands, and therefore customers often pick a brand one time and then remain with that brand without reconsidering. Examples include toothpaste, ketchup, soap, and candy.
Because convenience goods carry a relatively low price, consumers usually don’t bother price-checking—they simply stick with the brand they have always bought. For that reason, pricing isn’t overly important as long as the company doesn’t raise prices to the point of being significantly different from competitors. If someone always purchased Crest toothpaste for their entire life, they will not bother checking Colgate’s price to see if I can save a few cents; it’s a habitual purchase. Wide-scale promotion is very important in order to build brand recognition. Typically for a quick, impulsive purchase consumers will choose a brand that they have heard of and are familiar with (Heinz ketchup, for example, holds over 60% market share in the US largely because of its iconic brand). Strategic placement is also frequently used in an attempt to sell convenience goods. A common example is when stores will place candy and other small items right next to the checkout line in hopes of stirring up impulse purchases.
In contrast, consumers looking to purchase shopping goods are more willing to do research and compare different product options. The reason for this is because shopping goods are higher-priced or more important items within a person’s life and therefore it is a more economic use of consumers’ time to compare products. Examples can include extremely large purchases like houses and cars or more modest items like clothing. Take cars– people are willing to exert significant time and resources looking online, visiting multiple dealerships, and test-driving different vehicles to find the best car for the price.
Strategically, product quality and pricing are much more important for shopping goods than for convenience goods. With customers actively weighing their options, it is vital for a company to provide an offering with attractive value. This can mean selling a product that is better quality than competitors for the same price or selling a product that is similar in quality but at a lower price. The larger the purchase, the more important marketing the good becomes because customers will more actively consider the product’s price-value relationship. Promotion is also important for shopping goods in order to differentiate a product from its competitors and to communicate the value proposition to customers. Whereas promoting convenience goods simply focused on awareness, promoting shopping goods must focus on separating a product from its competition in the minds of customers.
Specialty goods are products are so unique or have such a loyal following that consumers will go to extensive lengths to seek them out. Rather than comparing brands looking for an attractive value, buyers of specialty goods focus on seeking out the one specific product they are looking for. Examples include Ferraris, GoPro cameras, and iPhones.
Typically, consumers of specialty goods do not have much price sensitivity—they are willing to pay whatever price is necessary for the product or brand that they prefer. Someone purchasing a Ferrari likely doesn’t care if a similar car is a few thousand dollars cheaper; they are paying for the brand name and the social status that comes with owning a Ferrari. Therefore, more of the company’s strategic focus needs to be centered on developing outstanding and innovational products that will retain the loyalty of their following. Promotion focuses on demonstrating the company’s latest great product and when/where people can buy it. It is also important to promote status that comes with the brand.
The final category of product is unsought goods—products that consumers either do not know about or would never think of buying. They are often items that people buy out of a sense of fear or danger, such as life insurance or fire extinguishers. Another example is batteries; no one ever thinks to buy a battery until their old ones die and need replacement.
The key to marketing unsought goods is to remind consumers that the product exists and to convince them that they need to purchase the product to avoid future hardships. For example, a company might run an emotional campaign focusing on how the potential customer’s loved ones will suffer financially if the customer dies unexpectedly. If successful, this would convince the buyer that purchasing a policy is a payment toward protecting their family and they would be compelled to go through with it in order to not have to worry about the potential danger. A lot of promotion is necessary, because consumers rarely think about buying such products unless they are prompted to.
Validity of Model
There are certain issues or uncertainties within the product classification model that need to be taken into consideration. One problem is that certain goods can potentially fall under multiple categories. For example, certain customers may see diamonds as a shopping good and compare prices extensively between brands before making a purchase. Other consumers may have chosen one brand as the best (ie Tiffany & Co.) and they buy that brand for the quality and status it brings. Sometimes product classification can vary depending on the individual customer that is buying the good.
Additionally, convenience goods and shopping goods can have some overlap. There are customers that may have bought Dove soap for their entire life, but will switch to Ivory if they look on the shelf and notice that it’s cheaper. Sometimes the social responsibility of the company producing the good can play a factor in the consumer’s choice as well. If it gets out that one toothpaste-maker mistreats their workers, there are a lot of people that would make a conscious decision to switch to a different brand.
While there are certainly some concerns with the product classification model and some external factors to keep in mind, it remains a useful general tool to help in planning marketing strategy.
Products can be defined quite broadly. We will now focus on one special category of products: consumer products. Consumer products are those types of products you have to do with most often: in private purchasing. What are the different types of consumer products, and what specific marketing considerations apply to each of the 4 types of consumer products?
4 Types of Consumer Products
Firstly, what specifically is a consumer product? A consumer product is a product bought by final consumers for personal consumption. But not every consumer product is the same. There are four different types of consumer products. Marketers usually classify consumer products into these 4 types of consumer products:
- Convenience products
- Shopping products
- Speciality products
- Unsought products.
These 4 types of consumer products all have different characteristics and involve a different consumer purchasing behaviour. Thus, the types of consumer products differ in the way consumers buy them and, for that reason, in the way they should be marketed.
Among the four types of consumer products, the convenience product is bought most frequently. A convenience product is a consumer product or service that customers normally buy frequently, immediately and without great comparison or buying effort. Examples include articles such as laundry detergents, fast food, sugar and magazines. As you can see, convenience products are those types of consumer products that are usually low-priced and placed in many locations to make them readily available when consumers need or want them.
The second one of the 4 types of consumer products is the shopping product. Shopping products are a consumer product that the customer usually compares on attributes such as quality, price and style in the process of selecting and purchasing. Thus, a difference between the two types of consumer products presented so far is that the shopping product is usually less frequently purchased and more carefully compared. Therefore, consumers spend much more time and effort in gathering information and comparing alternatives. Types of consumer products that fall within the category of shopping products are: furniture, clothing, used cars, airline services etc. As a matter of fact marketers usually distribute these types of consumer products through fewer outlets, but provide deeper sales support in order to help customers in the comparison effort.
Number three of the types of consumer products is the speciality product. Speciality products are consumer products and services with unique characteristics or brand identification for which a significant group of consumers is willing to make a special purchase effort. As you can see, the types of consumer products involve different levels of effort in the purchasing process: the speciality product requires a special purchase effort, but applies only to certain consumers.
Examples include specific cars, professional and high-prices photographic equipment, designer clothes etc. A perfect example for these types of consumer products is a Lamborghini. In order to buy one, a certain group of buyers would make a special effort, for instance by travelling great distances to buy one. However, speciality products are usually less compared against each other. Rather, the effort must be understood in terms of other factors: Buyers invest for example the time needed to reach dealers that carry the wanted products. To illustrate this, look at the Lamborghini example: the one who wants one is immediately convinced of the choice for a Lamborghini and would not compare it that much against 10 other brands.
The 4 types of consumer products also include unsought products. Unsought products are those consumer products that a consumer either does not know about or knows about but does not consider buying under normal conditions. Thus, these types of consumer products consumers do not think about normally, at least not until they need them. Most new innovations are unsought until consumers become aware of them. Other examples of these types of consumer products are life insurance, pre-planned funeral services etc. As a consequence of their nature, unsought products require much more advertising, selling and marketing efforts than other types of consumer products.
Below you can find relevant marketing considerations for each of the 4 types of consumer products.
|Marketing consideration||Types of Consumer Products|
|Customer buying behaviour||Frequent purchase, little effort (planning, comparison), low customer involvement||Less frequent purchase, much effort (planning and comparison of brands on price, quality, style etc.)||Strong brand preference and loyalty, special purchase effort, little comparison of brands, low price sensitivity||Little product awareness and knowledge or little interest|
|Price||Low price||Higher price||High price||Varies|
|Distribution||Widespread distribution, convenient locations||Selective distribution, fewer outlets||Exclusive distribution in only one or a few outlets||Varies|
|Promotion||Mass promotion||Advertising and personal selling||More carefully targeted promotion||Aggressive advertising and personal selling|
|Examples||Toothpaste, magazines, laundry detergent||Television, furniture, clothing||Luxury goods (e.g. Rolex watch), designer clothing||Life insurance or pre-planned funeral service|
Marketing Considerations for each of the 4 Types of Consumer Products