There are diverse factors and methods to distinguish products, which are as follows:
Based on the Nature
There are ten types of products which can be classified on the basis of their nature:
Goods: Goods are physical and tangible materials which can be possessed and owned, e.g., wheat, bicycles, etc.
Services: Services are intangible in nature and their production and consumption process occurs at the same time. It cannot be owned but can be possessed after being paid, e.g., banking and insurance services, etc.
Ideas: For developing a product, every marketer has an idea on the basis of which production process is carried-out. Like, Charles Rewson of Revlon stated that although in their factory they produce cosmetics, but in their stores they are selling hope, e.g., advertisement agency, consultancy firm.
Experiences: A company can create a market experience for their customers by organising various goods and services at one place, e.g„ Science city, Water World, etc.
Events: Event also acts asa product for marketers. Events are strongly connected with the experience of people attending it. The companies realise the power Of events and seek to associate their products With the event. Thus, event sponsorship is a big business as many companies try to leverage their products in the event. These events time-based which are held in a gap of one or more years like Award functions, Olympics, etc.
Persons: Many marketers work as a publicity and endorsement agent for film stars and sportspersons. Here, a film star or a sportsperson is a product for the marketer. This type of marketing is commonly known as celebrity marketing.
Places: Different places can be marketed to promote tourism business. For example, tourism in Kerala was promoted by campaigning it as God’s Own Country.
Properties: Properties are personal assets which are intangible in nature. It can be in form of real estate property (e.g., Amby Valley project) or financial property i.e., shares and bonds (e.g., Maruti or TCS IPO Campaign)
Organisations: In order to create a positive and dynamic company image, the organisations work actively. For example, Philips uses a tagline “Let’s Make things Better”.
Information: Information also acts as a product, when produced and marketed. Useful information can be provided as a product in different forms like dictionaries, encyclopaedias, etc.
Based on Consumer’s Intentions
On the basis of consumer’s intentions product can be classified into two categories:
- Consumer Products: The goods and services which are purchased by customers for personal consumption are known as ‘consumer products’. These products are classified as per the consumer’s buying habits/tastes/purchasing power, etc. Consumer products consist of unsought products, speciality products, shopping products and convenience products. These products may vary from person to person and how the products are purchased and marketed.
- Convenience Products: The consumer goods which are easily available and frequently purchased by consumers with minimal efforts are known as convenience goods. These are mainly household products such as wheat, vegetables, medicines, newspapers and other daily supplies. Convenience products are perishable in nature and must be consumed within few days. These goods are also known as ‘one shot items’.
- Shopping Products: These products are purchased on the basis Of quality, price suitability and style. If a customer feels motivated towards a product then only he purchases it. These products have a high degree of differentiation and are mostly complex goods. They are durable in nature and have high unit value like cars, laptops, home appliances, furniture, etc.
- Speciality Products: These products can only be purchased from special retail stores. Speciality products are deliberate choice Of consumers like alcohols, prescription medicines. etc.
- Unsought Products: These products are not known by the consumers or even if they are known, the consumers do not want to purchase them. These products are mainly of two types:
a) Regularly Unsought Products: The products which exist but consumers do not require them now, even though they may purchase them eventually, e.g., life insurance, medical check-up.
b) New Unsought Products: These are new products about which consumers’ are unaware. It becomes pertinent for the marketer to inform the customers’ about the new product and its attributes.
- Industrial Goods: A product purchased for use primarily in the production of other goods is referred as ‘industrial goods’. These products can be intended for resale, for commencing a business or for producing other products. Industrial or business products can be categorised on the basis of their uses:
- Raw Materials: The production or manufacturing process requires material input. Such inputs are called raw materials. These raw materials are used directly in the production process and are the part of final product. Raw materials can be of two types, viz., agricultural products (livestock, fruits and grain) and natural products (products of the seas and forests, land and minerals).
- Capital Equipment: Capital equipments are different tools and machines used by the firm in the production and operations process. They are referred as installations. They are long-lasting, dumble and expensive machines, e.g„ cranes, lathe, machineries, etc.
- Accessory Equipment: Equipments like printers, calculators, word processors, hand tools, meters, etc., are all accessories which are used during the production process. But, they are not a part of final manufactured product.
- Component Parts: These are items or parts, which when processed, become a component of the final product. They are a part of large product being manufactured and are easily distinguishable from the final product, e.g„ engines, gear boxes, batteries, rims, tyres and tubes are all the component parts of an automobile.
- Process Materials: The process materials are directly used for producing another product. These products are difflcult to identify. For example, a cosmetics company might use alcohol in manufacturing make-up or perfume.
- Supplies: These are non-durable, low-cost, essential items which are used on daily basis. They are used to assist and accelerate firm’s operations but are not a part of the final product, e.g., office stationaries, paints, cleaning material, lubricating oils, maintenance items, etc.
- Industrial Services: Industrial services are intangible in nature and are used for performing firm’s operations. These services include marketing, financial and legal services. The production process of a firm cannot be carried out without these services.
Based on Social Benefits
Based on the social characteristics, products can be classified on the basis of long-term benefits and short-term benefits, such as:
Pleasing Products: These products offer immediate satisfaction to the consumer but are injurious to them in the long-run, e.g., consumption of alcohol, cigarettes, pan masala, etc.
Deficient Products: Deficient products neither provide any immediate satisfaction nor give long-term benefits to the firm. These are non-profitable products; therefore companies are least interested in producing them, e.g„ pager or typewriter.
Salutary Products: These products have long-term benefits but do not provide immediate satisfaction to consumers. Thus, companies are by and large impassive towards these products. However, by applying different marketing strategies, such products can be made attractive for the consumers in the long-run, e.g„ soyabean chips (diet chips).
Desirable Products: Desirable products offer both long-term as well as short-term benefits to the consumers, i.e., immediate satisfaction and consumer welfare, e.g., healthy, tasty and ready-made food products. Ethical organisations try to make it a point to manufacture desirable products so that they can earn their profits as well as carry out their responsibilities towards society.