Integrated Business Course

BSA 1A, 1B and 1C

Requirement: Please write a Reaction Paper about this topic.

What is Product?
Anything that can be offered to a market for attention, acquisition, use or consumption that
might satisfy a want or need of an individual.

Product Classification – Types of Products

Product classification that is also known as different types of products. These types of products
or product classification are as below in three different forms.

1. Consumer Products
A. Convenience Products
B. Shopping Products
C. Specialty Products
2. Industrial Products
A. Material and Parts
B. Manufactured Material and Parts
C. Capital Items
D. Supplies

1. Consumer Products

Those products that are purchased by final consumers for personal consumption are called
consumer products. The way of purchasing these products provides the basis for the marketer
to further classify these products. The following is an important classification of these consumer
products on the basis of the manner of purchase & manner of marketing.

A. Convenience Products

Those consumer products that are purchased immediately & frequently with little efforts and
comparison are called convenience products. Examples of convenience products include the
following.

 Candy
 Newspapers
 Soap
 Fast Food etc.
The convenience products are placed at the front locations of the stores in abundance quantity
so that they are easily available to the customers. The price of these products is kept lower.

B. Shopping Products:

This type of product is purchased less frequently & careful comparison is made by the customer
on the price, quality, sustainability & style. In case of purchase of shopping products,
increased time & effort is made by the customers in collection of information & comparison
making. Following are some of examples of shopping products.

 Clothing
 Furniture
 Major Appliances
 Used Cars
 Hotel & Motel Services

These products are distributed in fewer outlets by the marketer along with the strong sales
support services that assist customers in their comparison making.

C. Specialty Products:

Specialty products are those consumer products that have brand identification or unique
characteristics and an important group of customers are happy to purchase these products.
Following are some of examples of specialty products.

2. Industrial Products
 Industrial Products are classified on the basis of their relative cost and where they enter the
production process.
Overall, there are many sub parts of the major classes, and each of them has a separate role in
the classification of Industrial products. Let us delve deeper into the classification.

A. Material & Parts

The goods that enter the manufacturers products completely are classified as Materials and
parts. In this, there are two types of materials commonly used for Industrial goods classification.

1) Farm Products – Farm products are products which can be re produced or recycled easily.
They are present in ample amount. However, due to their nature, they are perishable and have
to be handled accordingly. But because they are commonly used, there is hardly any marketing
applied to them. Some common products include cheese, eggs, fruits and vegetables, cotton,
wheat etc.
2) Natural Products – Natural products are products occuring naturally in the earth and hence
they cannot be recycled or re produced. Petrol or Diesel or oil (commonly used) are products
which occur naturally and can be classified as an Industrial product. These products are found
in bulk and the rarer they are, the higher the value. Price is totally dependent on reliability
of supply and keeps changing. Government intervention for these products is high t

B. Manufactured Materials and Parts

Raw material which has to be manufactured is classified as manufactured materials. And Many
a times, small manufacturers manufacture smaller parts which are used in larger machines like
an Automobile. These are manufactured parts, and they are the 2nd type in classification of
industrial products.

1.) Manufactured Materials – If we use the iron supplied to us to make a final product then, we
have manufactured material and that is the industrial product that we supply. Similarly, Yarn is
woven into cloth to make the final material – dresses and clothes. Any process which requires
raw material to be processed to give final products is a part of manufactured materials
classification. The pricing and marketing of the product in this case depends on the raw material
being used. So if the yarn which is used to make the cloth is very high quality, the pricing of the
end product will be high and the marketing will also be premium marketing.

2) Manufactured Parts – Using the same example above, if we are making smaller units which
play their role in larger products, then we are manufacturing parts as an industrial product. Ball
bearings are the perfect example of Manufactured parts. Now, there are so many ball bearings
manufacturers out there, that their marketing has become tedious as there is no or very
less differentiation possible. Hence, pricing and availability of manufactured parts becomes a
major issue instead of advertising, branding or marketing.

C. Capital items
To make any manufacturing business or large scale industry possible, capital items are used.
They are important in the classification of industrial products. Capital items generally fall under
the Assets column of the balance sheet. These are items necessary for the functioning of the
organization, and very useful to be invested in for the long term. Due to their very nature, these
capital items have a residual value to the company. And hence a company which has large
capital, has to ensure that it has large revenue, otherwise Capital (which is a fixed cost) will
bring the company down. There are two types of capital items

1) Installations – Large installations such as factories, warehouses and other buildings are
capital items which require long time installation and are used for an even longer time. There
are very few people in between when an installation is bought by a company. Design is critical
to such installations and there is absolute absence of Marketing in installations. The only thing
installations can be used for is to reinforce the reputation of the company (Example – ACC has
17 manufacturing plants).

2) Equipments – Equipments are both – heavy machineries as well as a utility to the

organization using them. Equipments in case of factories will be caterpillars, trucks, cranes and
what not. Equipment in case of industrial services will be computers, hardware and design
equipment, printers, copiers etc. All these are equipments which are assets. They have a short
span of life when compared to installations, but as compared to the life span of normal operating
supplies (paper, pen) they have a longer life span. These equipments are sold mainly through
intermediaries, though larger the equipment, more is the involvement of the brand directly. In
the sale of equipments, personal selling plays a major role as compared to marketing and
advertising.

D. Supplies
Any short term goods or material which is necessary for the day to day operations or a company
or businesses is termed as supplies. A simple exam is A4 sized paper. Can you imagine the
amount of paper it takes to make a company like Accenture work? A single office might need
1000’s of papers a day for print outs.

Supplies are marketed via intermediaries and not directly through companies. The reach of the
supplies manufacturers needs to be far and wide and regular supply of the product is more
important then marketing. Supplies are divided in 2 formats

1) Maintenance and Repair Supplies – Paints are a form of maintenance supplies and Asian
paints is the leader in that. Cleaning services are another form of maintenance.

2) Operating Supplies – Pen and paper, notepads, lubricants for automobiles are part of the
operating supplies needed on a day to day basis. Kangaro is an excellent brand which comes to
mind when it comes to staplers and staple pins.

Strategic Implications of the Stages

1. Introductory Stage – developing the market, creating awareness and considering

innovations.
2. Growth Stage – competition begins, sales grow quickly, profits peak and market
penetration
3. Maturity Stage – competition is intense, sales slow down, differentiated product
offerings, customers are brand loyal, few new entrants
4. Decline Stage – customers move to other options, competitors leave, profits are
low, consider exit

What is Labelling?
It refers to any printed statement related to merchandise that accompanies goods at the point of
sale.

Importance of Labelling:

1. To communicate brand name of the product.

2. To give instruction about use of a product.
3. To indicate date of manufacturing, date of expiry and batch number.
4. To give warning against risk if any.
5. To make unique among the competitors product.