Classifying products: understanding why

Convenience Goods

These are relatively inexpensive and frequently purchased goods. Consumers are not willing to spend much time and effort acquiring these goods and engage in little comparison shopping

Strategy >>> Availability; Accessibility; Convenience

Examples >>> Bread; Milk; Newspaper; Sweets; Lotto

Comparison Goods

These are relatively expensive and infrequently purchased goods. Consumers will spend time comparing prices, quality, style, service etc.

Strategy >>> Differentiation; Store Ambience; Quality Customer Service

Examples >>> Computer peripherals; Paper etc

Specialty Goods

These are normally high priced branded goods. No comparison process is involved. Consumers will not usually be constrained by the effort necessary to acquire such goods.

Strategy >>> Exclusivity; Branding; Quality

Examples >>> Art Books; Exclusive Brands

Once again, classifying products may seem to be rather academic, but understanding the nature of the category of product will provide the retailer with insights into how to respond from merchandising and marketing perspective. For instance: Most classes of convenience products are price sensitive and specialty items are not. This is significant! (Emergency products represent a class of convenience products that may attract a price premium.) Items sold in an ultra-convenient store (e.g.7-11) may be dearer than the equivalent product in a supermarket but that does not make the product less price-sensitive; buyers are paying a relative premium because of the convenience of the store (not the product).