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Product Classification

A. Durability and Tangibility Classification

a. Non durable goods: Non Durable goods are tangible goods normally

consumed in or few days.

Example: soap, salt and biscuits.

b. Durable Goods: are Tangible goods that can normally be used for many years.

For example, color TV, refrigerator, washing machines and vacuum cleaners.

c. Services are intangibles, inseparable, variable and perishable products

For example: airlines and banking services.

B. Consumer good classification

Consumer products are products and services bought by final consumers

for personal consumption. Marketers usually classify these products and

services further based on how consumers go about buying them.

Consumer products include continence products, shopping products,

specialty prod. And unsought products.

These products differ in the ways consumers buy them.

a. Convenience Products: are consumer products and services that consumers

usually buy frequently, as soon as they feel the need for them, they requireminimum or no planning before the purchase.

Example: detergent, soft drinks, cigrattes, cholocates magazines , fast

food etc.

Convenience goods can be further classified into three categories:

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1. Staple goods: Consumer [purchase on regular basis

2. Impulse goods: Consumer purchase without any planning or search effort

3. Emergency goods: Consumer purchases on urgent need.

b. Shopping products: are less frequently purchased consumer products and

services that customers compare carefully on suitability, quality, price, and style.

When buying shopping products and services, consumer spend much time and

efforts in gathering information and making comparisons. These are goods that

the consumers in the process of selection and purchase characteristically

compares on such bases as suitability and quality

Examples include furniture, clothing, used cars, jewelry and hotel and air lines.

Shopping products marketers usually distribute their products through

fewer outlets that are known for the quality of their merchandize andprovide deeper sales support to help customers in their comparison efforts.

Shopping goods are of two types:

Homogeneous goods, these are similar in quality but different

enough in price to justify shopping comparison.

Heterogeneous goods, these are differ in product feature and

services that may be more important than price.

c. Specialty Products are consumer products and services with unique

characteristics or brand identification for which a significant group of buyers is

willing to make a special purchase effort. They are more expensive than

convenience products and are not purchased frequently.

Examples include specific brands of cars, high priced photographic

equipment, designer clothes, and household appliances like TV,

refrigerator and washing machines and services of medical or legal

specialists. Eg: A Mercedes is a specialty product.

Buyers do not compare specialty product. They invest only the time

needed to reach dealers carrying the wanted products. However, they

spend a lot of time in planning the purchase deciding on the brand and

arranging for the money to buy the product.

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Eg cars

d. Unsought products are consumer products that the consumer either does not

know or knows about but does not normally think of buying.

Eg Life insurance, donation for charity and blood donations to hospitals.

By their very nature, unsought products require a lot of advertising, personal

selling and other marketing efforts.

C. Industrial products:

A IP are those purchased for further processing or for use in conducting a

business. Thus distinction between a consumer product and IP is based on the

purpose for which the product is brought.

Three groups of IP and services include

1. Materials and parts

2. Capital item

3. Suppliers and services

Material and parts include raw materials and manufactured materials and

parts. Raw mat consists of farm products (wheat, cotton, fruits, vegetables) and

natural products (fish, crude, petroleum, ore)

Manufactured materials and parts consists of components materials(iron,

cement, wires) and component parts ( small motors, tires, castings)

Capital parts are long lasting goods that facilitates developing or managing the

finished product. They include two groups: installation and equipments

Installation consists of major purchases suh a s builidings( factories , offices) and

fixed equipment includes portable factory equipment and tools (hand tool, lift

trucks) and office equipment (computers. Fax machines , desks) they have a

shorter life than installations and simply aid in the production process

Suppliers and services:

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Su[pplierss include operating supplies(lubricants, coal, paper, pensils a). and

repair and maintenance items(paints, nails, ))

Suppliers are the convenience products of the industrial field because they are

usually purchased with a min. of efforts or comparision.

Bus. Services include maintenance and repair services ()windows cleaning,

computer repair) and bus. Advisory services(legal, mgmt consulting, advertising))

such services are usually supplied under contract.

These are short listing goods and services that facilitate developing or managing

the finifhes product.

Product Levels

In planning its market offering, the market offering, the marketer needs to

think through five levels of the product. Each level adds more customer

value and the five constitute a customer value hierarchy.

I Level - Core Benefit

The most fundamental level is Core Benefit: the fundamental service or

benefits that the customer is really buying. A hotel guest buying rest andsleep, the purchaser of drill is buying holes. Marketer must see

themselves as benefit providers.

Potential Product

Augmented

Product

Expected Product

Basic Product

Core Benefit

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II Level - Basic Product

At the second level, the marketer has to turn the core benefit into basic

product. Thus a hotel room include a bed, bathroom, towel, dresser etc.

III Level - Expected Product

At this level, the marketer prepares an expected product, a set of attributes

and conditions buyer normally expect when they purchase this product.

Hotel guests expect a clean bed, fresh towel, working lamps, and a relative

degree of quiet. Because most hotels can meet this minimum expectation,

the traveler normally will settle for whichever hotel is most convenience or

least expensive.

IV Level - Augmented Product

At the fourth level, the marketer prepares an augmented product that

exceeds customer expectations. A hotel include a remote control

Television set, fresh flowers. Rapid check in, fine dining and room service.

Today competition essentially takes place at the

product augmentation level. In less developed countries, competition takes

place mostly at the expected product level. Product augmentation leads

the marketer to look at the users total consumption system: the way the

user performs the tasks of getting, using, fixing and disposing of the

product.

Some things should be noted about product augmentation strategy:

1. Each augmentation adds cost. The marketer has to ask whether

customers will pay enough to cover the extra cost.

2. Augmented benefits soon become expected benefits, this means that

competitors will have to search for still other features and benefits.

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V Level - Potential Product

At this level, all the possible augmentations and transformations the

product might undergo in the future. Here is where companies searchfor new ways to satisfy customers represent an innovative

transformation of the traditional hotel product.

Successful companies add benefits to their offering that not only satisfy

customers but also surprise and delight them. Delighting is a matter of

exceeding expectations.