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Classification of Goods and their Characteristics

What is Goods:

Goods are touchable things that are produced, bought or sold, then finally consumed.  Look around your house and you will see dozens of examples, stove , LCD , socks, shoes, bread, butter etc .

Classification of Goods:

All the goods that flow through our marketing system are generally classified into two groups.

  1. Consumer Goods
  2. Industrial Goods

We are brief examine the characteristic of both the type of goods that enter into the marketing process.

  1. Consumer Goods:

Consumer goods are those which are purchased by an ultimate consumer from retail outlets for their own personal consumption, based on the buying habits of the consumers, the consumer goods are father divided into three different types.

  1. Convenience Goods
  2. Shopping Goods
  3. Specialty Goods.

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Convenience Goods

Convenience goods are those products which are frequently purchased by the consumer sat eh retail outlets most convenient to them. These goods are purchased in small quantities and have a low unit value. The profit margin on the convenience goods are low, soft drinks like Coca Cola, Pepsi, Benz, cigarettes, tobacco, sugar,soaps, newspapers, candles etc are the common examples of the convenience goods.

  1. Shopping Goods:

The shopping goods are those which have a relatively high unit value and are bought less frequently by the consumers. The buyers visit a number of stores and compare the prices, style, and quality of the goods before making a purchase. The number of outlets that sell shipping goods is small compared to the outlets of convenience goods and these require more personal sale efforts the typical items of shopping goods are furniture, rugs , jewelry, shoes wearing clothes etc.

  1. Specialty Goods:

Those goods for which buyers have the strong preference and make efforts to purchase are named as specialty goods. These goods compared to the convenience and shopping goods are usually high prices and are available in a few retail outlets. The items type of this class automobiles, television sets, furs, expensive tobacco etc.

                The above classification of consumer goods is made on the basis of shopping habits of customers an article can represent convenient goods to one person, shopping to a second and specialty good to a third.

For example, a person who purchases a pair of shoes from the nearest outlet in the area and does not bother comparing the price and quality of the product, the pair of shoes is a convenient item to him. Women are generally price-conscious. They usually visit various shops, compare the prices and the quality of goods and then place the order, shoes, to most of the women constitute shopping well. The pair of shoes falls into the specialty goods classification for a person who has a preference for a particular brand of shoes and goes out of his way to purchase it regardless of price.

Industrial Goods:

The 2nd classification of goods is Industrial goods,  those goods which are used in the production of consumer or another type of goods for business use. The basic characteristics of industrial goods are.

  1. These are relatively of a high cost.
  2. These are more complex and of technical n nature
  3. The purchases of various types of industrial goods are better informed about the prices and availability of goods and the market for many of the industrial goods s narrow
  4. The demand for industrial goods is derived
  5. The buyers are rational n purchasing the industrial goods and are not led by emotional motives.
  6. Reciprocity of orders between buyers and sellers is a common particle in the industrial market. A steel producer buying chemicals from the chemical manufacturer that buys steel from him
  7. The demand for industrial goods is very sensitive to the changing business conditions. When the business slows down, the demand for industrial goods drops down.
  8. Industrial goods are generally sold directly by the producer to the purchaser. N case of consumer goods there is a long chain of middlemen.

The classification of industrial goods are as under;

  1. Raw Materials:

Raw material is basic items which are used in the production of goods by the business firms. the examples of raw materials are pulp used in paper mills, iron ore for the steel mill, cotton for textile plants, wool for woolen mills etc

  1. Semi-manufactured Goods:

Those goods which are processed but are sold to other business concerns for further processing are called semi-manufactured goods. These include such items as leather, aluminum sheet, coarse cloth, pig iron etc

  1. Parts:

The goods which are manufactured, finished and serve as components of large articles are named parts. The examples include tubes for radio, television, bearings for machinery meters for cars etc.

  1. Machinery and equipment:

This includes various types of machinery and office equipment such as typewriters, calculators used in industrial and business operations.

  1. Supplies:

The items which are essential to the operation of a business are called as supplies. These items include wrapping paper, cleaning compounds, lubricating oil, ribbons, stationery, typewriters etc

  1. Service:

The regular maintenance and repair of the machinery is an important item which finds its way through our market system. The classification of goods into consumer and producer goods depends upon the use to which they are put. There are many goods which fall at times in both the categories.

For Example, coal burnt in a furnace for business purchase is industrial goods. In case it is purchased for consumption at home, it will be classified as consumer goods.

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About the author

Salman Qureshi

Salman Qureshi is an Accountant by profession & he loves to write on Commerce & Management Sciences Subject to assist Students. Hope you guys will like his effort.

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