Why do marketers classify goods and services?
Classification of goods and services categorized between industry and customer goods is known as Product and Service classification. It is based on brands, quality, and quantity which companies deliver to the concerned client. Industrial goods are produced for industrial work, whereas consumer goods are produced for personal consumption by the customers. Marketing and sales need technological methods, a healthy environment, proper market strategies, marketing environment in terms of productivity and profit. Show
Companies need to analyze customer needs and classify products and services for smooth business operations and marketing. In the microenvironment, the market size is small, and hence, marketers have to understand the requirements of the consumers. It helps companies effectively promote their brand. The best possible way to promote a brand is to emphasize a product's characteristics more effectively. Marketing strategy and planning play a vital role in macro and microenvironments' social, cultural, and demographic populations. Figure 1: An image of three persons providing different servicesCC-BY | Image Credits: https://pixabay.com/ | Pixabay Measures for effective product and service classification
Types of products and service classificationProduct and service classification can be divided into different categories. Some of the common product and service classifications are as follows: Convenience goods: These are the goods that are required regularly and are consumed frequently. For example, salt, sugar, etc. Specialty Goods: These are the goods that are not required regularly but are consumed occasionally. For example, cars, furniture, etc. Unsought Goods: These are the goods that the consumers do not know about, and they do not even think of buying them until and unless they are made aware of them. For example, insurance policies, etc. Shopping Products: These are the goods that the consumers compare based on price, quality, and other features before making a purchase. For example, clothes, electronic gadgets, etc. Limitations/Challenges of Product and Service Classification
Common MistakesStudents may be aware of this topic, but they confuse specialization between marketing and sales. Generally, students wonder where to record product and service classification—whether under sales or marketing specialization. Often, they are puzzled regarding whether to consider marketing and sales specialization as the same or different. This issue impacts their exam performance directly. Due to this confusion, students find it difficult to attend any industrial training or internship. Therefore, teachers need to conduct counselling sessions and orientation programs regarding course specialization and career opportunities to make them understand. Teachers should take some demo classes regarding career counselling to create a clear image of job profile and position in terms of specialization. Context and ApplicationsProduct and service classification is a fundamental topic in marketing and is important for other courses of study like Bachelors of Business Administration (General), Post Graduate Program in Marketing, Masters in Business Administration (Marketing), and Diploma Courses in Sales & Marketing. While studying product and service classification, it is important to read the following topics to understand the concept better:
Practice Problems1. Who quoted the statement, “Every business is a service business”?
Answer: c Explanation: Great contributor and the father of marketing, Philip Kotler, stated that every business is a service business. 2. Which of the following product is known as an intangible dominant?
Answer: d Explanation: Teaching is a novel profession. In intangible dominant service, education is pure service that students can see or feel but is impossible to touch. 3. Which element of the marketing mix talks about product and service classification?
Answer: c Explanation: The product element identifies what product or service is to be provided to the customers. It classifies the product from the service. 4. Products or goods can be classified either as _____________.
Answer: c Explanation: Both services and goods can be classified into two categories of industrial and consumer goods. 5. Which of the following is a type of consumer product?
Answer: a Explanation: A shopping product is a product that is meant for final consumption by the customers. Why is classifying goods and services important?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.
How can a marketer classify consumer products?To help determine a selling strategy, marketing specialists classify all consumer products into four categories: convenience, shopping, specialty and unsought.
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.
How goods and services are classified?Goods and services can be classified into two basic categories, i.e., free goods and Economic goods.
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