Products

Meaning of Products: Product simply refers to a firm’s offering to the public i.e something that can be offered to a market for attention, acquisition and consumption. It can be a good or service that meets the requirements of a particular market or segment and yields enough profit to justify its continued existence.

Classifications of Products

Products can be classified into two categories: they are;

1. Consumer goods/ products
2. Industrial goods/ products

CONSUMER GOODS/ PRODUCTS: These are final goods that are bought by ultimate consumers or households for personal consumption.

Types of Consumer Goods/ Products

Consumer products are broadly classified into the following:

I. Convenience goods

II. Shopping goods

III. Specialty goods

IV. Unsought goods

I. Convenience goods: These are goods that are bought by the consumers with minimal buying effort. They are goods and services bought frequently, immediately and with minimal comparison. Examples include biscuits, newspaper, bread, egg etc.

II. Shopping goods: These are goods that consumers do a lot of selection and comparison based on various parameters, such as cost, quality, brand style, comfort etc, before buying them. Examples include television, radio, furniture etc.

III. Specialty goods: These are goods which are unique and luxurious in nature. They are goods that brand identification for which a number of buyers are willing to make special purchasing effort. Examples include cars, wedding dresses, men’s suits etc.

IV. Unsought goods: These are goods or services which are available in the market but customers are not really interested in buying them. Examples include insurance, buying of shares, donating blood to Red Cross etc.

INDUSTRIAL GOODS/ PRODUCTS: These are products bought mainly for the production of other goods. For example, cocoa is bought for producing bournvita, timber is used in making furniture, wheat is used in making bread etc.

Classifications of industrial products

Industrial goods are classified into the following:

i. Raw materials: These are industrial goods that exist in their natural form and will become part of another physical products e.g cocoa, wheat, cotton etc.

ii. Installations- These consist of the major equipment of industrial users. They are ready-made, expensive and durable products which help the production processes. Examples include a school building, a factory building etc.

iii. Accessory equipment: This is used in the production operations of an industrial firm but it does not become an actual part of the finished products. Examples include white board, chairs and tables as used in the school.

iv. Operating supplies- These are convenient goods of the industrial field. They help in a firm operation but do not become part of finished products e.g pencils and stationery, fuel, board marker as used in schools etc

Differences Between Goods and Services

i. Goods are tangible they can be seen and touched while services are intangible they cannot be seen or touched.

ii. Goods can be separated from the person who produce it while services cannot be separated from the person who renders it.

iii. Goods can be stored while services cannot be stored

iv. Goods of the same quality are homogenous while services are heterogeneous as their qualities depends on who renders them.

v. The sales of goods usually involves the middlemen like wholesalers and retailers while the sales of services rarely involve middlemen.