Product Marketing Essentials: Levels & Classification

Introduction to Product Marketing

Marketing planning begins with the formulation of a product offering designed to meet the needs and wants of customers in the target market. Customers evaluate the market offering based on three basic elements: product features and quality, service mix and quality, and price. Thus, the product is a key element in the market offering.

Nature and Concept of Product

Generally, a product is perceived as a tangible offering, but the concept of a product is much broader. A product can be thought of as anything that can be offered to the target market to satisfy a need or a want. Beyond physical goods, products include:

  • Services
  • Experiences
  • Events
  • Information
  • Ideas
  • Organizations
  • Persons
  • Properties
  • Places

What Do You Really Sell?

Various answers were received from different groups of participants during an exercise. One group answered, “Soaps.” When asked to repeat, the salespeople shot back, “Soaps, soaps, soaps!” They even gestured to help the facilitator visualize their meaning. When the same question was posed to another group of experienced salespeople, they replied, “Smartphones.” Despite persistent questioning, the group reiterated, “Smartphones, smartphones, smartphones!”

Product Levels in Marketing

While planning a product or service offering, marketers need to consider five product levels. Each level adds additional customer value. The product levels are:

  • Core Benefit: The fundamental benefit or service the customer is truly purchasing.
  • Basic Product: The core benefit transformed into a tangible or basic offering.
  • Expected Product: The set of attributes buyers typically anticipate when acquiring a specific product.
  • Augmented Product: An offering that surpasses customers’ initial expectations.
  • Potential Product: Encompasses all conceivable changes and transformations a product might undergo in the future.

Product Classification Methods

Products can be classified based on characteristics such as durability, tangibility, and usage (consumer or industrial). Products are broadly classified based on usage into two main types:

  1. Consumer Products
  2. Industrial Products

Consumer Products

Consumer goods are those ultimately used by consumers or households in forms that require no further commercial processing. These can be classified into three groups based on durability and tangibility:

  1. Consumer Non-Durable Goods

    Non-durable goods are tangible items normally consumed in one or a few uses. They are depleted with consumption and are generally purchased frequently, consumed quickly, and often bought without much effort or as a habit.

  2. Consumer Durable Goods

    These are tangible goods that survive many uses. They typically require more personal selling and service, command higher margins, and necessitate after-sales service and stronger seller guarantees.

  3. Services

    Services are intangible, perishable, variable, and inseparable products. They normally require more stringent quality control, supplier credibility, and adaptability.

Consumer goods can also be classified based on shopping habits. Accordingly, these can be divided into the following categories:

  • Convenience Goods

    Consumers usually purchase convenience goods frequently, immediately, and without spending much effort. Examples include soaps, newspapers, and tobacco products.

  • Shopping Goods

    Purchases of shopping goods involve considerable time and effort on the part of the consumer. Consumers typically compare and contrast various available options based on suitability, quality, price, and style.

  • Specialty Goods

    These goods have unique attributes or brand identification for which a sufficient number of buyers are willing to make a special purchasing effort.

  • Unsought Goods

    These are goods about which buyers are not aware or normally do not think of buying. Typical examples include reference books, insurance, and encyclopedias.

Industrial Goods

Industrial goods are primarily sold to businesses and industrial organizations for use in manufacturing other goods or for providing services.

Materials and Parts

Materials and parts are industrial goods that fully integrate into the manufacturer’s product. They fall into two classes: raw materials and manufactured materials and parts.

Raw Materials

Raw materials, in turn, fall into two major groups: farm products and natural products.

  • Farm Products: Supplied by numerous producers, these are often handled by intermediaries who provide assembly, grading, storage, transportation, and selling services. Examples include food grains, fruits, vegetables, and cotton.
  • Natural Products: Limited in supply, they possess great bulk and low value and must be transported from producer to user.
Manufactured Materials and Parts

Manufactured materials and parts fall into two categories: component materials (e.g., iron, yarn, cement, wire) and component parts (e.g., electric motors, pneumatic cylinders, tires, castings, and forgings).

Capital Items

These are long-lasting goods that facilitate the development and management of the finished product. They fall under two categories: installations and equipment.

Installations

Installations consist of buildings, factories, offices, and utility equipment such as air compressors, boilers, generators, powerful computers, servers, and elevators.

Equipment

Equipment comprises portable factory equipment and tools (e.g., hand tools, lift trucks) and office equipment (e.g., desktops, laptops, and copier machines). Quality, features, price, and service are major purchasing considerations for these items.

Supplies and Business Services

Supplies and business services are short-term goods and services essential for product development and management. Supplies are categorized into two kinds: maintenance and repair items (e.g., paint, nails).

Business Services

Business services include maintenance and repair services (e.g., air conditioner, copier machine repair services).