The Oxford Dictionary of Marketing describes the following major categories of consumer product:
- Convenience Products: Consumers buy these products with little thought or analysis. An example would be ready meals in a supermarket. Brand loyalty and personal preference play a large part in a consumers buying decision. These are items consumers buy regularly.
- Staple Products: These are items consumers would describe as the basics, bread, milk potatoes, petrol, flour, etc.
- Impulse Products: Consumers buy these products without any thought or planning. They are purchased because of their attractiveness or their availability. To market impulse products, you need to tempt the prospective purchaser. This is why confectionery is placed next to the till and why prominent positions in supermarkets; aisle-ends and eye-level shelves; are so important to producers of impulse products.
- Emergency products: These are purchased for immediate need. So an airport retailer will sell locks for suitcases and air sickness pills. These are the candles you buy in case of a power cut or the painkillers you buy when you have a headache.
- Shopping Products: These are goods consumers spend time looking for. The purchasing experience is a part of the enjoyment of the product. Consumers will spend time comparing and contrasting the various options available. There are two types of shopping product:
- Homogenous Goods: These are undifferentiated in terms of quality but differentiated in relation to price. Consumers will spend time making price comparisons before their decision to purchase.
- heterogenous Goods: Both price and quality vary. Consumers will balance price and quality constantly. When marketing these products it is important that customers are given plenty of options and sufficient information to make a decision.
- Speciality Products: These products are purchased with deep and intensive search. A great deal of detail and knowledge is involved in their purchase. Detailed comparisons between products are made. Consumers will likely want to trial the product before they purchase. For example, motor retailers providing test drives. Purchasing these products is often complex and time-consuming. the perception of quality by consumers is often a critical determinant for purchase. You need to match the needs and expectations of potential purchases.
- Grudge Products: Buyers have little interest in the product but know that at some point they will have to buy it. Often these are products where there is no choice but to buy. For example, in the UK it is the law that you buy car insurance. Other products like life insurance and funerals are grudge products. Daytime TV, often targeted at the retired, is full of advertisements for grudge products, funeral plans, mobility aids, and over-50’s life cover.
Your product management strategy will depend on whether you are a pioneer in the market or a follower. It will also depend on the stage the product is in its life cycle. The order in which products enter the market is important. Pioneer brands often have greater market share than later entrants into the sector. However, the costs of maintaining a pioneer product or brand are often higher than follower products.
Pioneer products have advantages on both the supply and demand sides. On the supply side, pioneer brands can be the first to obtain raw materials; there are better experience effects, cost advantages and the ability to preempt supply and distribution channels. On the demand side pioneer brands often have better recognition and familiarity. Pioneer brands often set consumer perceptions of a product or product category. They get to set the norms for a product. They set consumer expectations. Pioneer products get to market as being first. They can shift the market by developing new products which cannibalize the first and which deter others from entering the market. These products are often the source of brand extensions which reduce the available shelf space for competitors (although care is needed to avoid the extensions reducing the share and prominence of the originating product.
There are dangers in being first. Competitors can leapfrog your product through the application of technology. Market norms can be disrupted. John Logie Baird may have invented television but he died a pauper. Marconi’s electronic TV system, the more technological solution, was selected over Baird’s problematic physical system. Pioneer products involve heavy research and development spending and as they set the standard for the sale of a product, there may be inflexibility.
There are four classic Price/Promotion strategies for products. The choice of these strategies will likely depend on the type of product you have:
- Rapid Skimming: Where there is high promotional spend but the price of goods is also high. This is the strategy for luxury goods which may be shopping goods or speciality goods. It is the strategy for designer training shoes and high-end mobile phones.
- Slow Skimming: This is where there is a high price but low promotional spend. Often when a high level of promotional activity is seen as conflicting with the product image. This is a strategy for exclusive products such as Rolls Royce cars. it is a strategy where word of mouth is seen as being a major element in product sales. Products using a slow skimming strategy are sometimes vulnerable to new market entrants.
- Rapid Penetration Strategy: Where there is a low price but high promotional spend. This is the strategy for fast-moving consumer goods and convenience products. The aim is to gain market share rapidly and then to hold onto it. It is the strategy of low-cost airlines and budget hotels. It is the strategy of budget supermarkets like Aldi and Lidl.
- Slow Penetration Strategy: This is the strategy when prices are low and so is promotional spend. It is the strategy of supermarket own brand products and discount chains like Poundland and Bargain Books. It is the strategy of commodity products, staple products and some grudge products. You need a low costs base to allow the low product cost. Often promotion is little more than the actual effort of selling.
When developing a marketing plan, you need to know what type of product you are selling; what the customer expectations of the product are, and what perceptions you want consumers to draw from your products. Can your product be sold at a high price which generates high profit margins.
As products move through their life cycle, they often move to a high/high or a low/ low position. The majority of consumer products will be seen as necessities or luxuries. You also need to keep products relevant as consumers needs and expectations change. If your products demand a slow skimming strategy, you will likely need to create fighter and flank brands to protect market share of your core product from attacks by competitors.