Putting services and products into categories is important for business. Because it is one of the ways to figure out how to move it through the marketing system. The two main types are business products and consumer products.
CONSUMER PRODUCTS
Consumer products are things that people buy for themselves, their families, or their homes. Based on what people buy, they are often put into four subcategories: shopping products, convenience products, specialty products, and products that people don’t want.
Consumer products can also be set apart by how long they last. For example, interior and garden tools that last a long time are durable. On the other hand, non-durable items like school supplies, food, and disposable cameras are quickly worn out, used up, or outdated.
Convenience Products
Convenience products are things that people want to buy with as little trouble as possible or as easy as possible. Most are low-quality items that last only a short time and are often bought in small quantities. You can further divide these products into the impulse, staples, and emergency items. The best knowledge about the products can be gained through online marketing courses and online business courses.
Staple convenience products are things like bread, milk, and toilet paper that people plan to buy before they go to the store. Other convenience items, like candy bars, soft drinks, and tabloid newspapers, can be bought on the spot without much thought. When you need something right away, like an ambulance or a fuel pump for your car, you might buy an emergency product.
Since people don’t go out of their way to buy convenience products, companies try to get them to as many people as possible through different marketing channels, including retail and wholesale vendors. Convenience products are what vending machines, convenience stores, and fast food are all about.
Shopping Products
Before buying something, a buyer compares the brands and products sold by different stores. These items are bought less often, usually cost more than convenience goods, and last longer. Usually, price, style, quality, and color play a role in buying. Shopping products include TVs, computers, bedding, lawnmowers, and appliances.
Because people are going to shop for these things, one of the best ways to start a store that sells shopping items is to put it near other stores in busy shopping areas. Promoting shopping products is often done in partnership with the companies that make them and often involves a lot of advertising on radio, local newspapers, and TV.
Specialty Products
Specialty products are things that people look for because they are unique or because they know the brand. Buyers know what they need and are ready to put in a lot of work. Most of the time, but only sometimes, these things have a high value. There are both durable and non-durable items in this category.
Most of the time, price is only one of the important things when it comes to specialty products. Often, what makes them different is a brand preference (like a certain car brand) or a personal choice. Antiques, wedding dresses, fine jewelry, and golf clubs also fit into this category.
Specialty product makers and distributors usually only want their goods sold in certain stores. These outlets are chosen because they are willing and able to give the product targeted advertising, high-status image, and personal sales. It’s also important that the product and the store have the same look.
Unwanted Products
Unsought products are ones that consumers either need to learn about or aren’t very interested in getting. Some examples are life insurance, new concepts, life insurance, and funeral services that have already been planned. Because people need to learn about these products or why they need them, they often need a lot of advertising.
It can be challenging to distinguish between convenience, specialty, shopping, and not-sought-after products. As was already said, these groups are based on how people buy things. Depending on the consumer’s views and demographics, a given item may be a shopping good for another, a convenience good for one person, and a specialty good for a third.
BUSINESS PRODUCTS
Business products are things that companies buy to make their products or to run their businesses. Unlike consumer products, business products are grouped by how they are used instead of how people buy them. These products are split into six business classes: installations, raw materials, accessory equipment, parts and repair processed materials, maintenance and operating supplies, and business services.
Products used in business also have names that tell how long they will last. For example, capital items are business products that last long and cost money. On the other hand, expense items are things that don’t last long and are used up within a year.
Examples of Business Products – Small Business
Installations
Installations are big pieces of capital usually used right in making products. Some installations, like conveyor systems, robots, and machine tools, are built and designed for specific uses.
Other installations, like stamping machines, large commercial ovens, and computerized axial tomography scan machines, are built to a standard design but can be changed to fit each person’s needs.
When buying installations, the buyer needs to do a lot of research and think carefully about what to do. Installation makers can let people know that they are for sale by advertising. To sell installations, though, you need technical knowledge and help, which is best given when you sell them in person.
Accessory Equipment
Installations are more expensive and last longer than “accessory equipment,” which is a subcategory. Hand tools, computers, desk calculators, and forklifts are all examples. Some accessory equipment, like hand tools, are directly involved in the production process, but most are not.
The low unit price of accessory equipment and the fact that buyers come from many different types of businesses mean that a broad marketing strategy is needed. A lot of what sellers do is advertise in trade magazines and send mail to buying agents and other business buyers. Most of the time, middlemen like wholesalers do the selling when it needs to be done in person.
Raw Materials
Raw materials are things bought unprocessed to be turned into consumer or business goods. Iron ore, crude oil, diamonds, copper, wood, wheat, and leather are all examples of such things.
Most raw materials are graded based on how good they are so that there is some assurance that each grade is the same. But there isn’t much difference between offerings in the same grade. So, when people negotiate sales, they talk about price, delivery, and credit terms. Because of this negotiation and the fact that raw materials are usually sold in large quantities, personal selling is the most common way to sell these goods. People who have done entrepreneurial courses and online digital marketing courses.
Processed Materials and Component Parts
Parts are bought and then put into the final product without being changed. On the other hand, processed materials need more work before they can be used in the final product. Parts are very important to many industries, like the auto industry. Batteries, sunroofs, windshields, and spark plugs are just some of the parts that automakers use. They also use steel and upholstery fabric, both of which have been processed.
Buyers of raw materials and finished products know what they want. They may work closely with a company to design the needed parts or materials or ask several companies to bid on the job. In either case, you need to keep in touch with the buyers over time if you want to do business with them. So, again, personal selling is an important part of the marketing strategy.
Repair, Maintenance, and Operating Supplies
MRO supplies are often bought as expenses. MRO stands for maintenance, repair, and operation. They don’t directly make the end product or run the business, but they help in some way. Computer paper, light bulbs, lubrication oil, cleaning supplies, and office supplies are all examples of MRO supplies.
Unless they are ordering a lot, people who buy MRO supplies only spend a little time thinking about what to buy. Because of this, companies that sell supplies put a lot of effort into advertising to business buyers, especially through catalogs. Sales reps may be used when a lot is at stake, like a big order.
Business Services
Business services are the services that companies buy to help them run their businesses. These services include financial, marketing research, advertising, legal, lawn care, and cleaning. When deciding to hire an outside business to do a needed service, people often look at how often the service is needed, how much-specialized knowledge is needed, and how much more it would cost to do the service in-house than to hire an outside firm.
It can be challenging to tell if a product is for consumers or businesses. The best method to tell them apart is to know what the buyer plans to do with the product. On the other hand, they are business products if a business buys them .A supermarket that buys flour to resell buys a consumer good, but a bakery that buys flour to make pastries buys a business product. A pickup truck bought for personal use is a consumer good, but a pickup truck bought by a lawn service to transport lawnmowers is a business product.
FAQs
What are the different types of business products?
There are seven business classes: accessory equipment, major equipment, raw materials, supplies, parts, processed materials, and business services. The end user is the key difference between products categorized as business products and consumer products.
