Product Classification: What It Is & Why Every Marketer Needs to Master It

As a marketer, you know that deeply understanding your product is essential for success. But to truly optimize your marketing efforts, you need to go a level deeper and understand what type of product you have in the eyes of consumers. This is where product classification comes in.

What is Product Classification?

Put simply, product classification is the process of categorizing products into four main types based on how consumers perceive and purchase them: convenience goods, shopping goods, specialty goods, and unsought goods. Each type of product has unique characteristics that influence consumer behavior and require tailored marketing strategies.

Product classification as a concept was first introduced by Melvin T. Copeland in the Harvard Business Review back in 1923. But it‘s just as relevant today – if not more so. In fact, a study by Salesforce found that 84% of consumers say being treated like a person, not a number, is very important to winning their business. Product classification enables exactly that – marketing that treats consumers like individuals with specific needs and behaviors.

Let‘s unpack each of the four product classifications, along with real-world examples and marketing best practices.

The 4 Types of Product Classification

1. Convenience Goods

Convenience goods are products that consumers purchase regularly, with minimal effort or decision-making. Think of items like milk, toothpaste, candy bars – you probably have a go-to brand and pick it up without much thought whenever you need it.

Examples of convenience goods brands include:

  • Coca-Cola soft drinks
  • Bounty paper towels
  • Orbit chewing gum
  • Lay‘s potato chips

Convenience goods are usually low priced, with widespread distribution. Consumers prioritize convenience and habit over extensive research or brand loyalty. According to a report by Nielsen, 60% of global consumers say they‘re likely to buy from companies that make it easy and convenient to purchase from them.

Marketing Tactics for Convenience Goods

To effectively market convenience goods, focus on:

  1. Widespread brand awareness through omnichannel advertising, especially point-of-purchase
  2. Securing prime shelf space and visibility in stores
  3. Consistently communicating your core brand promise and values
  4. Offering value-adds like bulk sizing, multipacks, or subscription options

For example, Quip, an electric toothbrush DTC brand, has disrupted the classic convenience good of manual toothbrushes through its sleek design, subscription refill model, and lifestyle-focused branding that‘s omnipresent on social media.

2. Shopping Goods

Shopping goods are items that consumers purchase less frequently and put more thought into. They‘ll often compare options, prices, features, and brands before deciding. Clothes, electronics, home furnishings all typically fall under the shopping good umbrella.

Examples of shopping goods brands include:

  • Nike athletic apparel
  • Sony electronics
  • West Elm furniture
  • MAC cosmetics

Consumers are more invested – literally and figuratively – in shopping goods. A PwC survey found that 61% of respondents were willing to pay more for a good customer experience with shopping goods.

Marketing Tactics for Shopping Goods

To effectively market shopping goods, focus on:

  1. Telling your unique brand story and value proposition across touchpoints
  2. Providing ample information and content to aid in research and decision-making
  3. Leveraging social proof like reviews, UGC, and influencer marketing
  4. Creating immersive retail experiences that bring your brand to life

For instance, beauty retailer Sephora has mastered the in-store shopping goods experience through its high-tech, high-touch store concept that lets shoppers virtually try on makeup, take beauty classes, and get personalized recommendations from experts.

3. Specialty Goods

Specialty goods are highly sought-after, unique products that consumers will go out of their way for. They usually have specific, well-known brand names that command loyalty. Luxury goods often fall under this category, as do niche or artisanal products.

Examples of specialty goods brands include:

  • Louis Vuitton handbags
  • Tesla automobiles
  • Rolex watches
  • Le Creuset cookware

Specialty goods consumers prioritize quality, status, and emotional connection over price or convenience. A study by Deloitte found that 81% of specialty goods consumers will recommend a brand they have an emotional connection with.

Marketing Tactics for Specialty Goods

To effectively market specialty goods, focus on:

  1. Cultivating an exclusive, aspirational brand image
  2. Delivering exceptional craftsmanship and customer service
  3. Fostering a sense of community and allegiance among your customer base
  4. Leveraging high-end partnerships and celebrity placements

Luxury fashion house Chanel epitomizes specialty goods marketing through tactics like its intimate, appointment-only boutiques, celebrity-studded events, and iconic products like the 2.55 handbag that boast years-long waitlists.

4. Unsought Goods

Unsought goods are products that consumers don‘t think about or actively seek out, usually because they‘re unaware of them or don‘t see an immediate need. This usually includes emergent technology, preventative solutions, and distress purchases.

Examples of unsought goods brands include:

  • Life insurance policies
  • Home security systems
  • Electric vehicles
  • Preventative health screenings

Unsought goods require a more proactive, education-based approach to marketing. A report by Mintel found that 56% of consumers like to learn about new products, services, and trends from brands they trust.

Marketing Tactics for Unsought Goods

To effectively market unsought goods, focus on:

  1. Building problem awareness and urgency through thought leadership content
  2. Communicating your solution‘s unique benefits and competitive advantages
  3. Leveraging targeted digital advertising to reach ideal customer profiles
  4. Providing interactive tools and assessments to engage and educate

CarShield, an auto warranty provider, has found success marketing its unsought good through a combination of targeted radio, TV, and digital ads, comparison content hubs, and positive customer testimonials.

Marketing & Product Classification in 2024 & Beyond

The core tenets of product classification in marketing still hold true today and will remain relevant for the foreseeable future. But as technologies and consumer behaviors evolve, so too must our marketing approaches for each product type.

The Continued Rise of Digital & DTC

With the massive growth of ecommerce (+32.4% in 2020 alone), brands across product categories need to optimize the digital path-to-purchase. This is especially key for shopping goods and specialty goods. Investing in immersive online experiences like virtual showrooms, video consults, and AR/VR try-on will be table stakes.

The DTC explosion is also blurring the lines of traditional product classifications. Brands like Away (luggage) and Glossier (cosmetics) have transformed historically shopping goods into specialty goods through their unique, covetable branding.

Personalization at Scale

Advances in artificial intelligence (AI) and machine learning are ushering in a new era of hyper-personalized marketing. Brands can tap into predictive analytics to anticipate consumer needs for convenience goods, like auto-replenishing groceries.

Stitch Fix has set a new bar for personalized shopping goods by combining AI-powered recommendations with human stylists for a truly tailored experience. And Sephora‘s Color IQ system scans customers‘ skin to deliver a perfectly matched foundation shade.

Sustainability & Purpose-Driven Brands

Consumers are paying attention to brands‘ ethics and values more than ever. 83% of consumers think companies should be actively shaping ESG best practices. Brands need to authentically integrate sustainability and social impact into their brand stories, especially for shopping and specialty goods.

Levi‘s SecondHand resale program is a prime example, reinforcing its speciality denim while driving sustainability. And TOMS built a whole brand around its pioneering one-for-one giving model – arguably transforming its casual shoes from a shopping good to a specialty one.

Mastering Product Classification: Your Marketing Action Plan

Now that you grasp the four product classification types and emerging marketing trends for each, let‘s put that knowledge into practice. Follow these steps to optimize your own marketing efforts:

  1. Clearly identify your product classification(s) based on consumer behavior and perception. If you have multiple products, consider creating a matrix.

  2. Audit your current marketing tactics against best practices for your product type. Where are the gaps and opportunities?

  3. Set measurable objectives for your product classification-informed marketing strategy. Consider metrics like brand awareness, purchase intent, customer loyalty.

  4. Develop an action plan spanning creative, channels, and measurement. Prioritize the most impactful initiatives for your product type and target audience.

  5. Test, learn, and iterate often. Stay on top of emerging trends and continually gather customer feedback to refine your approach.

By putting product classification at the heart of your marketing strategy, you‘ll be able to engage consumers more effectively, differentiate from competitors, and drive long-term brand growth. The key is to never lose sight of your customer and how they perceive, experience, and engage with your product.

Key Takeaways

To sum up, here are the key points every marketer should know about product classification:

  • There are four main types of products based on consumer buying behavior: convenience goods, shopping goods, specialty goods, and unsought goods.
  • Each product classification requires a tailored marketing approach based on factors like price, distribution, brand loyalty, and purchase frequency.
  • Emerging trends like DTC, personalization, and sustainability are impacting marketing approaches for each product type.
  • Effectively leveraging product classification in your marketing starts with clearly identifying your product type(s) and mapping tactics accordingly – then continually measuring and optimizing.

No matter what type of product you market, understanding how consumers classify and perceive it is essential for success. By mastering product classification, you can create relevant, resonant marketing that drives long-term growth for your brand.

Sources:

  • Copeland, M.T. (1923). Relation of consumers‘ buying habits to marketing methods. Harvard Business Review, 1(3), 282-289.
  • Salesforce (2020). State of the Connected Customer report.
  • Nielsen (2020). Recalibrated Consumption Dynamics report.
  • PwC (2021). Global Consumer Insights Pulse Survey.
  • Deloitte (2021). Global Powers of Luxury Goods report.
  • Mintel (2021). Trend drivers: Consumer trends shaping the next five years.
  • Mastercard (2021). Recovery Insights report.
  • Accenture (2020). Enabling Sustainability Through Digital Transformation.

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