What is a product?

Marketing theorists tend to give the word product a very broad meaning, using it to refer to anything capable of satisfying a need or want. Thus, services, activities, people (politicians, athletes, film stars), places (holiday resorts), organizations (hospitals, colleges, political parties), and ideas, as well as physical objects offered for sale by retailers, can be considered as products. Physical products can be usually augmented by benefits such as customers advice, delivery, credit facilities, a warranty or guarantee, maintenance, after-sales services, and so on.

Products fall into two categories, depending on the buyer’s intentions. Products purchased for ultimate satisfaction of personal and family needs are consumer products. Those bought for use in a firm’s operations or to make other products are industrial products. Industrial products are classified according to the uses to which they are put. Raw materials, component parts and component materials become part of the product they are used to produce. They are entering products. Installations, accessory equipment, supplies and business services are support products. They do not become part of the product they are used to use. Consumers buy products to satisfy their personal wants; industrial buyers seek to satisfy the goals of their organizations.

Several bases can be used to classify consumer products, but the one most used is buyer’s behaviour. The system works because many consumers behave alike in buying a given type of product. The four classes of consumer products are convenience products, shopping products, specialty products, and unsought products.

Consumers do not think it is worth the effort to compare the price and quality of convenience products. Convenience products are low-priced items or services that consumers buy frequently with minimum shopping effort. Examples include chewing gum, hand soap and automatic car washes. Because buyers are unwilling to shop actively for convenience products, the products are available in many outlets, including, for some, vending machines. Three subclasses are staple products, impulse products, and emergency products.

Examples of staple products for many customers include bread, milk, and bus or subway transportation. These products are brought regularly and routinely. The only real thinking about such a product occurs when the buyer initially adds it to the list of regularly consumed products. Supermarket shoppers who do not use the written shopping list rely on the store’s display of products to remind them of what they need.

Purchases of impulse products are completely unplanned. Exposure to the product triggers the want. Before going shopping you could prepare a list of the staple products you would buy, but not the impulse products. The desire to buy staple products may cause you to go shopping. The desire to buy impulse products is a result of your shopping. These products are displayed and made available in heavy traffic areas, such as checkout aisles in supermarkets and store corridors in shopping malls. Purchases of emergency products result from urgent and compelling needs. You will pay more than if you had anticipated this need and bought them at a discount store. Special one-hour service for cleaning and pressing clothing is an example of an emergency product offered by dry cleaners and hotels. Ambulance and wrecker services are also emergency products.

Consumers think it is worth the cost and effort to compare shopping products because they perceive more risk in buying these products. Shopping products are goods or services that consumers will purchase only after making price and quality comparisons. These products can be homogeneous or heterogeneous.

Consumers consider homogeneous shopping products to be alike. A person who thinks all top-of-the-line 17-cubic-foot refrigerators are very similar will limit the shopping effort to making price comparisons. Thus, retailers tend to engage in price competition. Manufacturers also may stress differences in design and try to distinguish between the physical product and its product-related services. One manufacturer might set up service centers to differentiate its product from rivals. Examples of homogeneous products might include oil change, income-tax preparation and long-distance telephone service.

Consumers consider heterogeneous shopping products to be different or non-standardised. They shop for the best price-quality combination. Price is often secondary to style and quality when price comparisons are hard to make. Using price to compare clothing, jewelry, cars, furniture and apartments is difficult, because quality and style vary within each product class. A couple searching for an apartment may spend a lot of time comparing décor, floor plans, distance from bus lines and so on. Once they find the ‘right’ apartment, price becomes important. If the rent is reasonable compared to the alternatives, they probably will hire the apartment.

Consumers will make a special effort to buy specialty products. Specialty products are goods or services to which a buyer has a strong conviction as to brand style or type. Consumers will go out of their way to find these specialty products because of their perceived quality and other benefits. A person may willingly travel two hundred miles to a nearest dealer who sells the Rolls-Royce. There is no comparison shopping; the consumer searches to find specialty product. Most consumer services that involve a high degree of skill are considered specialty products. Marketers try to create specialty status for their products with advertising phrases such as ‘accept no substitutes’, ‘insist on the real thing’, and ‘it's worth the trip from anywhere.’ They build customer loyalty when consumers consider their brands to be specialty products. A specialty product can be less intensively distributed than a convenience or shopping product because buyers will search to find it.

Unsought products are goods or services that potential buyers do not know exist or do not want to think about buying. There are two types of unsought products – regularly unsought products and new unsought products. Caskets, life insurance, a lawyer’s services in preparing a will, and a physician’s services in giving a cancer checkup are regularly unsought products. They are existing products that consumers do not want to think about buying, although they may eventually purchase them. Marketers face a tough challenge in persuading consumers to buy them. Products that are totally new and unfamiliar to consumers are new unsought products. The marketer’s task here is to inform target customers of a product’s existence and stimulating demand for it.

Concept сheck

1. Define the term ‘product’.

2. What is the difference between consumer and industrial products?

3. Complete the chart without looking back at the text.

4. How does classifying consumer products on the basis of buyer behaviour help a marketer?

5. Why do not consumers think it is worth comparing price and quality for convenience products?

6. How do convenience products and shopping products differ? What are distinguishing characteristics of each?

7. Define and give the subclasses under each of the major classes of consumer products.

8. Would a mobile phone that sells for 900$ be a convenience, shopping, or specialty product?

9. Read the sentences and decide which of them are true. Explain your choice.

   1. Convenience products are high-priced items or services that consumers buy seldom with minimum of shopping effort.

   2. Impulse products are displayed and can be found checkout aisles in supermarkets.

   3. Heterogeneous shopping products are practically alike and standardized.

   4. Consumers will put forth a lot of effort to find a speciality product.

   5. Customer’s loyalty is built when a product is in a staple product category.

   6. Brand-new products belong to new unsought product subclass.

10. Make your own plan and retell the text, using it. Draw up a plan and retell the text using it.

11. Read the explanations and say what groups of products are described:

    Classification	Explanation
    	Consumers plan the purchase of these products with great care, know exactly what they want, and will accept no substitutes. Here the consumer’s efforts bend towards finding an outlet that can supply exactly the item needed: this accentuates the exclusivity of the product, so some marketers deliberately limit the number of outlets to sell the products.
    	These products are not bought; they are sold. Examples are fitted kitchens and encyclopedias. While most people would recognise the need for these items, it is rare for consumers to go out looking for them; far more commonly the products are sold either through an aggressive sales programme, or through a sudden change of circumstances which forces the consumer to buy.
    	Cheap, frequently purchased items that do not require much thought or planning. The consumer typically buys the same brand or goes to the same shop. Examples are newspapers, basic groceries and soft drinks.
    	Usually infrequently purchased items such as computers, cars, hi-fi systems or household appliances. From the manufacturer’s viewpoint, such products require few retail outlets, but will require much more personal selling on the part of the retailer: so there is usually a high degree of co-operation between manufacturer and retailer in marketing the products.

12. How do component parts differ from process materials?

READING II