Classifying products is a good way for marketers to understand how to market a particular product to their customers. Classifying a product will let them determine the optimal method for distribution, promotion, and pricing. How a product is ultimately classified will determine how it will be marketed and sold to its customers.

There are two (2) main categories of products; Consumer Products and Business Products. Consumer products are sold to individuals to satisfy personal or family needs. Business products are sold to businesses to satisfy their needs or bought by a form to make into other products.  The majority of all products or services fall under these two categories.

Consumer Products

Product purchased to satisfy personal and family needs.  An example might be laundry detergent to clean clothes or a light bulb to light up a room at night. Each one is used by an individual or family. [1]

• Convenience Products: Relatively inexpensive, frequently purchased items for which buying exert minimal purchasing efforts. Examples: toothpaste, soap, paper towels
• Shopping Product: Items for which buyers are willing to expend considerable effort in planning and making purchases. Example: tires, food, clothing, furniture
• Specialty Products: Items with unique characteristics that buyers are willing to expend considerable efforts to obtain. Example: car, jewelry, house or boat
• Unsought Products: Products purchased to solve a sudden problem, products of which customers are unaware, and products that people do not necessarily think of buying. These products can include emergency products such as bandages and ointment and automobile parts used to repair a car. These products are not bought until they are needed.

Business Products

Products bought to use in a firm’s operations, to resell, or to make other products. Example: Plastic that is molded to form the outside shell of a toy doll or paper that is used to write a contract. [1]

• Installation: Facilities and no portable major equipment. Example: buildings, warehouses, forklift, dump truck, crane, large equipment.
• Accessory equipment: Equipment that doesn’t become part of the final physical product but is used in production or office activities. Example: paper, computers, trucks, conveyor systems used to transport ram materials, tools, sewing machine
• Raw material: Basic natural materials that become part of a physical product. Example: sheet metal, plastic, nuts and bolts, fabric, wiring, glass, electronic components, power supply, wheels, glue, wood.
• Component Parts: Items that become part of a physical product and are either items that are finished items ready for assembly or items that need little processing before assembly. Example: Windshield, tiers, printer ink, antenna, on/off switch, bike chain
• Process Materials: Materials that are used directly in the production of other products but are not readily identifiable. Example: Flour for baking bread, glue for building a television set, oil for manufacturing laundry detergent.
• MRO Supplies: Maintenance, repair, and operating items that facilitate production and operations but do not become part of the finished product. Example: paper, pencils, oils, cleaning supplies, brooms, mops, detergent, paper towels

 AcqLinks and References:

• [1] Pride-Ferrell.  Marketing: Southern-Western Cengage Learning, 2010

Updated: 7/23/2021

Rank: G2