Classification of products | Types | Categories
Table of Contents
Classification of products
Products are classified on several bases. Users, types of products, manner of purchasing and life span of goods are some of the important framework for classifying products in domestic marketing.
On the basis of users, goods are classified into consumer goods and industrial goods. Both consumer goods and industrial goods may further be classified on the basis of manner of purchase. Accordingly, goods may be of convenience, preference, shopping and specialty goods.
On the basis of their life span, products may be classified into
- durable goods
- non-durable goods and;
- disposable goods.
These product classifications are fully applicable to international marketing.
Categories of products:
From local to global markets, there are four product categories
- local products
- national products
- international products and
- global products.
Local products are sold in a portion of a national market. In U.K, the term local product is synonymous with regional product. Generally, local products are new products distributed in a region. Sometimes, the local product, marketed in one region is expanded to other regions of the nation based on its acceptability.
A national product is offered in a single national market. National products cater to the needs and preferences of a particular national market. Some global companies have country specific national brands.
For example, Coca Cola altered composition of its drink to suit the needs and preferences of Japanese by developing non-carbonated beverage for sale only in Japan. It introduced a yellow carbonated drink known as pasturina to compete with Peru’s soft drink.
Reasons for introduction of National brands:
The reasons for introducing national brands are as follows:
- The existence of a single national business does not facilitate global leverage from headquarters of the company.
- National products allow transfer and application of experience gained in one market to other products.
- The multi-country marketer, by introducing national brands taps the advantages of national markets.
- Quite often national markets represent a substantial opportunity cost to a company.
International products are offered in multinational, regional markets. For example, Euro product is the international product. It is offered throughout Europe but not in the rest of the world. A company can move from international to global position. This is possible through acquisition of businesses operating in multi-regions.
For example, Renault car which was an Euro product entered the Brazilian market and became a multi-regional company. Renault combined with Nissan in Asia and moved from a multi-regional to a global position.
Global products are offered in global markets. A global product is designed to meet the needs of global market. For example, Reader’s Digest is a global magazine. More than 100 million People read the monthly magazine, published in 47 editions in 19 languages.
Reader’s Digest has always used the same formula for all markets. Sony, General Electric and Levis are other strong global brands. When an industry globalizes, it is imperative to develop global products. Developing a global product design reduces the cost of R & D. Products such as automobiles that can meet safety and pollution standards can become global.