Types of Products and Goods

The products can be classified on the basis of a) Durability & tangibility and b) Use. The following chart depicts the Product classification:



Classification of products on the basis of Durability & tangibility

Non-durable goods

These are tangible goods that are low priced and normally consumed in one or few uses everyday or anytime of the day such as soaps, biscuits, shampoos, deodorants, etc.  As these goods are consume quickly and purchased frequently, the appropriate strategy is to make them available in many locations, charge only a small mark up and advertise heavily to induce trial and build preference.

Durable goods

These are also tangible goods that remain in use months after months and year after year. Normally, they require more personal selling and service, guarantee, higher margin, etc. For example: couches or chairs, vacuum cleaners, washing machines, etc.


These are intangible, inseparable, variable and perishable products. As a result, they normally require more quality control, supplier creditability and adaptability. Example- hair cut, legal advices, appliance repair, financing, etc.

Classification of products on the basis of Uses

In this part, the goods or services can be classified into two broad categories viz.  Consumer goods and Industrial goods.

Consumer goods classification

These are meant for use of consumption by ultimate consumers for the satisfaction of their needs and wants. According to American Marketing Association (AMA), “Consumer products are those products which are used by ultimate consumers in their original form without commercial processing.” These are classified into following ways:



Convenience goods

These are those products which a consumer purchases frequently, immediately and with minimum efforts from convenient locations. For example, tooth paste, bread, newspaper, cigarette, match box, medicine, soap, cold drinks, grocery items, etc.

Shopping goods

These are those goods where consumers devote considerable time in making selections before they buy. On the basis of durability, suitability, quality price and style, the selection and purchasing of the goods takes place. For example, household furniture, automobiles, refrigerators, sewing machines, jewelleries, clothing, used cars; arid major appliance, etc.

Specialty goods

These goods possess unique characteristics and brand identification for which a sufficient number of buyers are willing to make a special purchasing effort. For example, stereo components, photographic equipment, men’s suits, shoes, goggles, mobile phones, cloth material, etc.

Unsought goods

These are those goods which the consumer does not know about or does not normally think of buying. These goods require advertising and personal-selling support. For example, smoke detectors, kitchen exhaust fans like electric chimneys, etc. The classic examples of known but unsought goods are life insurance, cemetery plots, gravestones and encyclopedias, reference books, etc.


Industrial goods classification

These are those goods that are meant for use in making other products or for rendering a service in the operation of business organization. According to American Marketing Association (AMA), “Industrial goods are those goods which are designed to be sold primarily for use in producing other goods or rendering services.” These are classified into following ways:



Raw Material (are also known as feedstock or unprocessed material)

These are basic industrial materials that are used to produce goods, finished products, energy, or intermediate materials, which are feedstock for future finished products. They are divided into following parts:

  • Natural products: Minerals, land, and products of the forests and the seas.
  • Agricultural products: wheat, cotton, tobacco, fruits, live-stocks, etc.
  • Animal products: Eggs, raw milk, etc.

The demand for raw material depends upon the demand of finished goods. These are usually graded for standardized quality.

Fabricating material and parts

These are partial or complete manufactured goods that are used without any substantial change in their form and become a part of the finished goods. For example, electric motors, batteries, automobile parts, spark plugs, tyres and tubes, components of electrical appliances, etc. These products are directly supplied to the industrial users.


Installations have long life and are expensive major equipments of an industrial user. They are usually bought directly from the producers with the capital sale preceded by long negotiation period. For example, heavy machinery, diesel engines, trucks, factory sites and production lines.

Accessory equipments

These are those industrial goods which are usually less expensive and have short life than installation. They are required for manufacture of final products though they don’t form part of finished products. Example, Portable factory equipment and tools (hand tools, fork lift trucks) and office equipments (personal computers, desktops, etc).  They are highly standardized instruments.

Operating supplies

Operating supplies are short-lived and low priced items usually purchased with a minimum of effort. They are the ‘convenience goods’ of industries. They do not have a significant impact on the long run profitability of an organization. Supplies include floor wax, lubricating oils, heating fuel and office stationary like pins, pens, pencils, papers, etc. Operating supplies do not become a part of finished product.

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