Classification of Products and Services

Classification of Products/ Services
Consumer Products
Goods used by consumers for
personal, family, or household
purposes. Examples: shampoo,
notebook paper, picture frame, etc.
Consumer Services
Activities purchased by a consumer
for personal or family purposes.
Examples: haircut, carwash
Classifications of Consumer
Convenience goods - Inexpensive products that
require little time and effort on the purchase decisions
and are purchased regularly.
Staple goods - Used often/regularly and are kept on
hand. Examples: bread, toilet paper
Impulse goods - Unplanned purchases. Examples:
magazine or candy in a grocery store check-out aisle
Emergency goods - Purchased to satisfy an
immediate need. Example: Medicine purchased on
the way to a sporting event to sooth a headache.
Classifications of Consumer
Shopping goods - Products that usually
require a great deal of time and effort for
the purchase decision. Consumers
search and compare similar products prior
to purchase.
Clothing items and hardware or
appliances are often considered shopping
Classifications of Consumer
Specialty goods - Sought by a consumer
who desires a specific brand or product.
The consumer will not accept a substitute.
The consumer may have saved money
for long period of time before purchasing
or may have to borrow money to
Examples: Rolex watch, house, boat.
Classifications of Consumer
Pure services: Activities performed that
do not include a tangible product.
Non-good services - Personal/professional
service for a fee. Example: tax preparation.
Owned-good services - Activities that alter,
improve, or repair products already owned.
Example: dry cleaning, appliance repair service.
Rented-good services - Provide a product to
use for a brief period for a fee. Example: carpet
cleaners, movie rental.
Classifications of Consumer
Product related services - Activities
offered with or to compliment a product.
Examples: warranties, alterations.
Industrial goods - Goods
purchased by a business to
produce other goods or to
resell to consumers.
Examples: assembly line
machinery, rubber
Industrial services - Activities
used by a business to insure
proper operation, or
contracted by a business to
perform a task. Examples:
Copier or cleaning services for
a business
Classifications of Industrial
Installation and accessory
equipment - Part of the production
process used to make products.
Examples: assembly line
machinery, industrial sewing
Raw materials, components,
fabricated parts - Consumed to
produce a product or become
part of the final product.
Examples: wood for paper,
wheat for bread
Classifications of Consumer
Industrial supplies - Support or
facilitate the use of industrial goods of
the operation of the business.
Examples: computers, cash registers,
Maintenance and repair Cleaning, repairing, painting, or
decorating that is performed for or
by a business.
Example: janitorial services
Classifications of Consumer
Business advisory Management consulting,
legal, engineering, or
accounting performed for or
by a business.
Elements of the Product Mix
Includes all the different products that
a company makes or sells.
•Product Line
•Product Item
•Product Width
•Product Depth
Product Mix Strategies
Product length or depth
• Deep mix - Many items offered in the
same line; meets many needs.
Example: Procter & Gamble makes
several types of Crest toothpaste.
• Shallow mix - Few items offered in the
same line; specializes in meeting
certain needs. Example: Croc only
has a limited selection of shoe styles.
Product Mix Strategies
Product width or breadth
• Narrow mix - Limited number of product
lines; focuses on a specific target market.
Example: Zaxby’s only offers chicken
• Broad mix - Many different product lines
offered; focuses on one-stop shopping to
meet many needs and wants.
Example: Applebee’s or Chili’s has lots of
meat dishes from which to choose.
Product Mix Strategies
• The plan for how the business
determines which products it will make
or stock
• May develop completely new products
• May expand or modify their current
product lines
• May drop existing products
Elements of the product mix
Product consistency
The relationship of a business’s product
line offerings in terms of use, price range,
target market, and methods of distribution
and production.
Importance of
Product/Service Planning and Mix
Business must always be aware of
what new products are available as
well as what their competitors are
• Competition - “”Beating” the competition;
increasing the market share.
• Direct competition – Same product is
offered by like competitors. McDonald’s
and Burger King are direct competitors
• Indirect competition – Competitors offer
similar or substitute products. Bath & Body
Works and CVS are indirect competitors.
Importance of
Product/Service Planning and Mix
Changes in the Market
– Observe changes in the product
life cycle.
– Observe changes in consumer
preferences and trends.