A product is often more complex to understand than the word itself may suggest. If you go shopping and look around, you quickly recognize that there are various types of products on the shelves. But that is not all: Services are also part of the equation, as a special type of product. Also, products can be defined in many different ways. First of all, we should distinguish between the various types of consumer products and, on the opposite side, business-to-business products (B2B). In this article, we focus on consumer products. Consumer products are those types of products you likely have to do with most often: in private purchasing. So let’s understand: What are the different types of consumer products, and what specific marketing considerations apply to each of the 4 types of consumer products?
Definition of Consumer Products
To begin, let’s answer a simple question. What specifically is a consumer product? Consumer products, often referred to as final goods, are products bought by consumers for personal consumption. In other words, we are talking about products individuals or households buy to satisfy their personal needs.
We need to distinguish consumer products from other types of products (e.g., industrial products). Consumer products primarily refer to products, as the name implies, but may also include services. This essentially means that wherever you look, you will find products. The new haircut you got from your barber shop, the ice cream you are eating, the car you are driving, and the massage you are getting – those are just a few examples of the broad range of products out there.
Obviously, this broad range of different products needs to be segmented. For that reason, we distinguish four types of consumer products with different characteristics and resulting marketing considerations. But not only that, also consumers differ in their preferences, and there are different shopper types. As a result, it makes sense to distinguish different types of products.
4 Types of Consumer Products
Obviously, not every consumer product is the same. As you can imagine, it would be cumbersome to not distinguish between various product types when developing marketing strategies. From a marketing perspective, there are four different types of consumer products we need to take into account.
Marketers distinguish these 4 types of consumer products:
- Convenience products
- Shopping products
- Specialty products
- Unsought products.
These 4 types of products all have different characteristics and involve a different consumer purchasing behavior. Thus, they differ in the way consumers buy them and, for that reason, in the way they should be marketed.
Let’s now have a closer look at each of these product types and consider specific marketing strategies applicable to them.
Among the four types of consumer products, the convenience product is purchased most frequently. A convenience product is a consumer product or service that consumers normally buy frequently, immediately and without great comparison or buying effort.
Examples include products such as bottled water, laundry detergents, fast food, sugar and magazines. As you can see, convenience products are those types of consumer products that are usually low-priced and placed in many locations to make them readily available when consumers need or want them.
These products require some specific marketing strategies. As they usually are quite generic and easily replaceable, competition is extremely tough. At the same time, differentiation is rather difficult. How do you make your product stand out in a million different sugar brands that all more or less have the same characteristics? How do you get consumer attention, if there is no major comparison effort involved?
A couple of key marketing strategies should be considered for this type of consumer product. Firstly, prices should be low – in line or ideally below those of competing products. Therefore, you would usually want to choose a competitive pricing strategy. Secondly, promotion should target a large audience – nearly every household needs sugar.
However, most importantly, distribution must be widespread. You want to have your product in as many different locations as possible – across different distribution channels, retailers, and even within shops. For instance, you could want to sell your sugar in supermarkets, convenience stores, mini-shops and so on. The goal is to be as close to the consumer and as visible as possible. However, in this it is crucial to consider that the definition of convenience has changed compared to the pre-digital era. Convenience once meant providing a product within a reasonable walk or drive – just close to the consumer, so they can easily pick it up on the way home from work or at a store nearby.
Today, Millennial and Gen-Z customers have different expectations. With all the technology and on-demand culture these days, closeness and convenience are becoming redefined rapidly. These consumers have grown up with the certainty that media and services are available anytime, anyplace, at the push of a button. We could call this the Amazon Effect.
What does this mean for distribution strategies? Well, convenience in this digital landscape actually means that your products should not only be close to consumers, they should be brought to them. In other words, home delivery becomes more and more important for convenience products.
And still, with all these marketing strategies in mind, you may have to think more about the product itself: How could you possibly make it stand out? Maybe your sugar offers certain health benefits, or it is organic, or fair-trade. Think about what makes your brand special and show it to gain customer attention.
Have a look at further marketing strategies for convenience products.
The second type of consumer product is the shopping product. Shopping products are products that the customer usually compares on attributes such as quality, price and style in the process of selecting and purchasing. Thus, a difference between the two types of consumer products presented so far is that the shopping product is usually less frequently purchased and more carefully compared. Therefore, consumers spend much more time and effort in gathering information and comparing alternatives.
Examples of shopping products include furniture, clothing, used cars, airline services etc. As you can see, such products are a little more involving: they require more time, thinking and investment than convenience products.
As a result, marketing strategies for shopping products are a bit different. They are usually distributed through fewer outlets, but with deeper sales support in order to help customers in the comparison effort. Also, the price is usually much higher than for convenience products. Think about a used car – clearly this carries a different price tag than even the most expensive sugar you can find on the shelves. In terms of promotion, you would typically consider more targeted advertising, both online (e.g., Instagram ads) and offline (e.g., flyers, billboard ads etc.). In addition, personal selling becomes a key strategy. Think about that used car again – can you imagine the used car dealer trying to convince you to buy it?
In contrast to convenience products, differentiation is significantly easier for shopping products. There are simply more attributes that allow to differentiate. Also, the purchasing decision-making process is more complex, as consumers now want to compare product attributes.
The third type of consumer product is the specialty product. As the name suggests, these products are kind of special. We are talking about consumer products and services with unique characteristics or brand identification for which a significant group of consumers is willing to make a special purchase effort.
As you can imagine, specialty products involve much higher levels of effort in the purchasing process or marketing funnel. However, while a special purchase effort is required, these products are only relevant for a much smaller group of consumers.
Examples of specialty products include expensive cars, professional photographic equipment, designer clothes etc. A perfect example for specialty products is a Ferrari. In order to buy one, a certain group of buyers would make a special effort, for instance by travelling great distances to buy one. However, specialty products are usually less compared against each other. Rather, the effort must be understood in terms of other factors. Buyers for instance invest more time to reach dealers that carry the wanted products. To illustrate this, look at the Ferrari example: the one who wants one is often already since long convinced that he or she wants a Ferrari – there is not that much comparison against other brands. But the buyer would likely travel quite far to get to the nearest Ferrari dealer.
Which marketing strategies are relevant for specialty products? Here we are talking about products with high prices, for which exclusive distribution in only one or a few outlets works best. Promotion is more carefully targeted than for other product types to capture those few consumers actually willing to buy such a special product.
The last of the 4 types of consumer products is the unsought product. Unsought products are those consumer products that a consumer either does not know about or knows about but does not consider buying under normal conditions. Thus, consumers do not think about these products under normal circumstances, at least not until they need them.
Most new innovations, freshly out of the new product development process, are unsought until consumers become aware of them. Other examples of this type of consumer product are life insurance and pre-planned funeral services etc.
How do you market products that consumers do not really think about? You have to make them think about them. As a consequence of their nature, unsought products require much more advertising, selling and marketing efforts than other types of consumer products. In many cases, aggressive advertising and personal selling is a requirement. Prices can vary a lot and really depend on the specific product. Ideally, you apply the pricing strategy that is most suited to the product characteristics. All your efforts should focus on creating awareness and a perceived need for your product. Therefore, demonstrating the product, emphasizing its benefits and offering an attractive price are key to success.
Learn more about marketing strategies for unsought products.
Marketing Considerations for the 4 Types of Consumer Products
After having explained the 4 types of consumer products, let’s now summarize the relevant marketing considerations for each of them.
A Different Perspective on Products: The Three Levels of Products
While we can cluster consumer products into four different classes or categories as described above (convenience products, shopping products, specialty products, and unsought products), there is another way to think about products. What we mean are the three levels of products – a logic that applies to every type of product. The three levels of products define a product along the values and benefits it brings to the customer. These are manifold – think of the products you can buy in a supermarket, for instance. While a can of Coke may bring you quench your thirst in the first place, it does many other things. Firstly, you get a tangible metal can which comes in flashy red color and may be cool because it was in the fridge. Once you drink it, it quenches your thirst – but it also brings you taste, pleasure, satisfaction. But eventually, it may even bring you lifestyle, a feeling of familiarity, and many other things.
As you can see, even a simple product can be looked at in many different ways. We could even go as far as saying that a product actually consists of many different types of sub-products, depending on the way you look at it.
Marketers refer to this as the three levels of products. These comprise of the core value (which is the actual core benefit you are seeking, such as satisfying your thirst in the Coke example), the actual product (e.g., the tangible metal can), and the augmented product (e.g., the lifestyle you get with the Coke you are buying).
In this post, we have looked at the various types of products out there, in particular the four types of consumer products. The key learning should be that products can differ strongly in their attributes and the way consumers buy them. This is a very important fact, because without knowledge of the specific type of product you are trying to promote and sell, your chances of success are limited. On the other side, once you know what you are dealing with and how consumers approach the buying decision, you can develop effective marketing strategies to reach your target audience.