Classification of Products and Services Personal Finance Lab

What is Product Classification? What? ● Classification is the grouping of different products based around things like cost and similarity. Why? ● Classification is important because certain products carry similar characteristics in terms of price level, similarity between competing brands, and the way consumers approach them in the buying process. Groups ● ● Convenience good Shopping goods Specialty goods Unsought goods

Convenience Goods What? ● ● Convivence goods are low cost items with very little differentiation between products Consumers are often pick one brand stick with that brand without even realizing it. Since the consumers are so brand loyal, they often don’t check the price. Advertising ● ● Wide scale is very important because there needs to be strong brand representation with convenience goods Also where the item is placed in the store holds great importance. For example having candy bars near the checkouts at grocery stores.

Shopping Goods What? Shopping goods are higher cost items that hold more meaning to the consumer Consumers are often conduct more research and compare different product options before purchasing a shopping good. Advertising ● ● ● The goal for a shopping good is to sell a product that is at a good price but still is made with high quality Promotion is also important for shopping goods in order to differentiate a product from its competitors and to communicate the value proposition to customers. Promoting shopping goods must focus on separating a product from its competition in the minds of customers.

Specialty Goods What? ● ● Specialty goods are so unique or have such a loyal following that consumers disregard the price. Consumers are looking for one specific product Advertising ● ● ● A company’s strategic focus needs to be centered on developing outstanding and innovational products that will retain the loyalty of their following. Promotion focuses on demonstrating the company’s latest great product and when/where people can buy it. It is also important to promote status that comes with the brand.

Unsought Goods What? ● ● Unsought goods are products that consumers either do not know about or would never think of buying They are often items that people buy out of a sense of fear or danger Advertising ● ● The main goal is to remind consumers that the product exists and to convince them that they need to purchase the product to avoid future hardships A lot of promotion is necessary, because consumers rarely think about buying such products unless they are prompted to.