In marketing, a product is anything that can be offered to a market that might satisfy a want or need. A product is good, idea, method, information, object or service created as a result of a process and serves a need or satisfies a want. It has a combination of tangible and intangible attributes (benefits, features, functions, uses) that a seller offers a buyer for purchase. For example a seller of a toothbrush not only offers the physical product but also the idea that the consumer will be improving the health of their teeth.

When a product is bought, the buyer is not only buying the product but also buying the benefits and the satisfaction that the product will provide.

The competitive nature of the market place has therefore become a significant factor that producers can only ignore to their own peril. The purchasing power of the consumers is also affected by the economy of the Nation. It is as a result of those factors that manufacturers must of necessity know the product category to which their products belong.

The hostility in the marketing environment suggests that the producers have no option other than to employ aggressive marketing drive in order to survive competition in the face of the declining purchasing power of the consumers. It is in the light of this, that product classification becomes one of the most potent technique for determining the survival or extinction of products in the hand of the producers.

Consumers at times may want to minimise the shopping time. This should be-a signal to the producer on the retail outlet to adopt, that is, whether a door step delivery or supermarket sale is necessary. It is the responsibility of the producer to fashion out a channel of distribution, that which makes the product accessible to the consumers. This again pre-supposes that the buying behaviour of the consumers must be studied for appropriate channel selection. Goods that are bought infrequently are “used up” quite slowly. This explains why consumers can afford to allot a considerable amount of time and effort to the buying decision so as to consider the gains and costs of the time and effort devoted to buying the product. The implication of the buying behaviour on the part of the producer is that the retail outlet should be minimised for the products. There are other cases of products in which the consumer already has a brand in mind; the special purchasing effort is just to know where it is on sales. Producers will do well to ensure that such products retain the quality the consumers want. Since price of the items are secondary to the consumers, producers can afford to jack up the price so as to obtain some level of margin of profit.

The following are the various classifications of products:


Consumer goods are goods that are bought from retail stores for personal, family, or household use. They are grouped into three subcategories on the basis of consumer buying habits: convenience goods, shopping goods, and specialty goods.


(a) Convenience Products: These refer to items that the consumer buys with minimum shopping effort. Essentially these are goods that are habitual with the consumers. They are bought frequently but not in large quantities because they are non-durable good. In other words they are ‘used up” goods. The buying decision of the consumers for convenience goods is ignited by habit and he knows all the retail outlets. Under this category are biscuits, newspaper, toilet soap, cigarettes etc. Consumers want to minimise the time and effort devoted to buying convenience goods, therefore the consumers are not interested in comparing the prices and quality of convenience goods with other related products in the market place. This is because the gain of such exercise is not high enough to justify the cost involved in the exercise. But in case, the price of a convenience good like bread is abnormally higher than competing brands, consumers tend to change their buying decision on the product. In an attempt to buy convenience goods, consumers purchase such goods at a convenient location or retail outlets situated very close to their residence. It is the recognition of this consumer’s minimum shopping time that makes marketers of such products to have the products available in large quantities in numerous outlets.

Marketers of convenience goods must therefore be sure that they have adequate inventories of the convenience goods. This is because inadequate supply of such goods will create extra search time on the part of the consumers which they may not want to embark upon.


There are three types of convenience products -staples, impulse and emergency products. These sub-categorisation of convenience goods are based on how the consumers think about the product and not on the characteristic features of the product.

  • Staple products:These are products that are bought often in a routine manner without much thought on regular basis. A typical example is with paste or milk for breakfast. Staple products are usually sold in convenient location like food stores and supermarkets. Branding is important with staple products.
  • Impulse Products: These are products that are purchased without any planning or search effort. They are usually purchased because of a strongly felt need. They are products that consumers had not planned to buy but decide to buy on the spot. An example is an ice-cream seller who rings a bell, if the children do not buy the ice cream as the seller is sighted, the need goes away and the purchase will not be later. This implies that if the buyer does not see an impulse product on time the sale may be lost. This explains why retailers display impulse products conspicuously where they will be seen and bought.
  • Emergency products: These are products that are circumstantially purchased when the need is great. For example, the price of ambulance service will not matter if an accident occurs. So also is the price of umbrella during a rainstorm. Different marketing mix are required to meet customers’ emergency needs.


(b) Shopping Products: These are products consumers purchase and consume on a less frequent schedule compared to convenience

products. Consumers are willing to spend more time locating these products since they are relatively more expensive than convenience products and because these may possess additional psychological benefits for the purchaser, such as raising their perceived status level within their social group. Examples are clothing products, personal services, electronic products, and household furnishings. Because consumers are purchasing less frequently and are willing to shop to locate these products, the target market is much smaller than that of convenience goods. Consequently, marketers often are more selective when choosing distribution outlets to sell their products.


(c) Specialty Products: These are products that tend to carry a high price tag relative to convenience and shopping products. Consumption may occur at about the same rate as shopping products but consumers are much more selective. In fact, in many cases consumers know in advance which product they prefer and will not shop to compare products. But they may shop at retailers that provide the best value. Examples include high-end luxury automobiles, expensive champagne, and celebrity hair care experts. The target markets are generally very small and outlets selling the products are very limited to the point of being exclusive.

The distinction among convenience, shopping, and specialty goods is not always clear. As noted earlier, these classifications are based on consumers’ buying habits. Consequently, a given item may be a convenience good for one person, a shopping good for another, and a specialty good for a third. For example, for a person who does not want to spend time shopping, buying a pair of shoes might be a convenience purchase. In contrast, another person might buy shoes only after considerable thought and comparison: in this instance, the shoes are a shopping good. Still another individual who perhaps prefers a certain brand or has an unusual size will buy individual shoes only from a specific retail location; for this buyer, the shoes are a specialty good.



Industrial goods are products that companies purchase to make other products, which they then sell. Some are used directly in the production of the products for resale, and some are used indirectly. Unlike consumer goods, industrial goods are classified on the basis of their use rather than the customer’s buying habits.

The distinction among convenience, shopping, and specialty goods is not always clear. As noted earlier, these classifications are based on consumers’ buying habits. Consequently, a given goods are divided into five subcategories: installations, accessory equipment, raw materials, fabricated parts and materials, and industrial supplies.

Industrial goods also carry designations related to their durability. Durable industrial goods that cost large sums of money are referred to as capital items. Non-durable industrial goods that are used up within a year are called expense items.


(a) Installations: Installations are major capital items that are typically used directly in the production of goods. Some installations, such as conveyor systems, robotic equipment, and machine tools, are designed and built for specialized situations. Other installations, such as stamping machines, large commercial ovens, and computerized axial tomography (CAT) scan machines are built to a standard design but can be modified to meet individual requirements.

The purchase of installations requires extensive research and careful decision making on the part of the buyer.


(b) Accessory Equipment: Goods that fall into the subcategory of accessory equipment are capital items that are less expensive and have shorter lives than installations. Examples include hand tools, computers, desk calculators, and forklifts. While some types of accessory equipment, such as hand tools, are involved directly in the production process, most are only indirectly involved.

The relatively low unit value of accessory equipment, combined with a market made up of buyers from several different types of businesses, dictates a broad marketing strategy. Sellers rely heavily on advertisements in trade publications and mailings to purchasing agents and other business buyers. When personal selling is needed, it is usually done by intermediaries, such as wholesalers.


(c) Raw Materials: Raw materials are products that are purchased in their raw state for the purpose of processing them into consumer or industrial goods. Examples are iron ore, crude oil, diamonds, copper, timber, wheat, and leather. Some (e.g ., wheat) may be converted directly into another consumer product (cereal). Others (e.g ., timber) may be converted into an intermediate product (lumber) to be resold for use in another industry (construction).

Most raw materials are graded according to quality so that there is some assurance of consistency within each grade. There is, however, little difference between offerings within a grade. Consequently, sales negotiations focus on price, delivery, and credit terms. This negotiation plus the fact that raw materials are ordinarily sold in large quantities make personal selling the principal marketing approach for these goods.


(d) Fabricated Parts and Materials: Fabricated parts are items that are purchased to be placed in the final product without further processing. Fabricated materials, on the other hand, require additional processing before being placed in the end product. Many industries, including the auto industry rely heavily on fabricated parts. Automakers use such fabricated parts as batteries, sun roofs, windshields, and spark plugs. They also use several fabricated materials, including steel and upholstery fabric. As a matter of fact, many industries actually buy more fabricated items than raw materials.

Buyers of fabricated parts and materials have well-defined specifications for their needs. They may work closely with a company in designing the components or materials they require, or they may invite bids from several companies. In either case, in order to be in a position to get the business, personal contact must be maintained with the buyers over time. Here again, personal selling is a key component in the marketing strategy.


(e) Industrial Supplies: Industrial supplies are frequently purchased expense items. They contribute indirectly to the production of final products or to the administration of the production process. Supplies include computer paper, light bulbs, lubrication oil, cleaning supplies, and office supplies.

Buyers of industrial supplies do not spend a great deal of time on their purchasing decisions unless they are ordering large quantities. As a result, companies marketing supplies place their emphasis on advertising particularly in the form of catalogue for business buyers. When large orders are at stake, sales representatives may be used.

It is not always clear whether a product is a consumer good or an industrial good.The key to differentiating them is to identify what the buyer intends to make of the good. Goods that are in their final form are ready to be consumed, and are bought to be resold to the final consumer are classified as consumer goods. On the other hand, if they are bought by a business for its own use, they are considered industrial goods. Some items, such as flour and pick-up trucks, can fall into either classification, depending on how they are used. Flour purchased by a supermarket for resale would be classified as a consumer good, but flour purchased by a bakery to make pastries would be classified as an industrial good. A pickup truck bought for personal use is a consumer good; if purchased to transport lawnmowers for a lawn service, it is an industrial good.




Goods are something that you can use or consume, like food or CDs or books or a car or clothes. You buy goods with the idea that you will use it, either just once or over and over again. Services are something that someone does for you, like give you a haircut or fix you dinner or even teach you marketing. Services according to Kotler (1988) is any act or performance that one party can offer to another that is essentially intangible and does not result in ownership of anything. Its production may or may not be tied to a physical product.

Services are intangible products those that cannot be seen or touched that are provided to consumers or other companies. A physician provides healthcare to patients. Communication companies provide services such as Internet access, television programming and the ability to make local or long distance telephone calls. Banks provide a range of financial services to customers, such as checking accounts and investment opportunities. Other companies provide services such as lawn care, plumbing, home repair, business consulting or transportation.

There are differences between services and goods. The first is that a service is an intangible process that cannot be weighed or measured, whereas a good is a tangible output of a process that has physical dimensions. This distinction has important business implications since a service innovation, unlike a product innovation, cannot be patented. Thus, a company with a new concept must expand rapidly before competitors copy its procedures. Service intangibility also presents a problem for customers since, unlike with a physical product, they cannot try it out and test it before purchase.

The second is that a service requires some degree of interaction with the customer for it to be a service. The interaction may be brief, but it must exist for the service to be complete. Where face-to-face service is required, the service facility must be designed to handle the customer’s presence. Goods, on the other hand, are generally produced in a facility separate from the customer. They can be made according to a production schedule that is efficient for the company.

The third is that services, with the big exception of hard technologies such as ATMs and information technologies such as answering machines and automated Internet exchanges, are inherently heterogeneous – they vary from day to day and even hour by hour as a function of the attitudes of the customer and the servers.

Thus, even highly scripted work such as that found in call centers can produce unpredictable outcomes. Goods, in contrast, can be produced to meet very tight specifications day-in and day-out with essentially zero variability. In those cases where a defective good is produced, it can be reworked or scrapped.

The fourth is that services as a process are perishable and time dependent, and unlike goods, they can’t be stored.

Both goods and services need not be driven by economic motives. Several times goods and services are linked closely and cannot be detached. For example on purchase of a car, the good is the car but the processing, the provision of accessories, after sales activities are all services. It is essential to note that the difference between pure goods and pure services are in contrast but most goods and services exist in between with a mix of both. For instance, in a restaurant, food refers to goods while the service is the waiters offering the ambience, the setting of tables amongst others.

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