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Product Classification

Classifying your company's products will help you define your target audience, and draw up more effective pricing, distribution and promotion strategies. Products are mainly classified as:

Convenience Goods

These are readily available products that shoppers buy without having to make much of a decision. Such products are highly standardised and of low unit value. Customers can easily find substitutes if the products are not available. There are minimal or no price differences between them and substitute products. Wide distribution and extensive market coverage are necessary. Examples of convenience goods are milk, tissue paper and petrol.

Shopping Goods

As these are higher value products, customers tend to "shop around" to compare different brands before making a purchase. Customers base their selection on perceived differences in brand image, price, quality, and other physical and non-physical product attributes. The market can be more segmented than that of convenience goods. Examples of shopping goods are watches, sports apparel, electrical appliances and cosmetics.

Special/Luxury Goods

These are high-value products. Price is not a predominant factor affecting sales; product attributes and marketing methods are vital to their success. Customers make purchasing decisions based on product brand and image, and rarely accept substitutes. They are willing to go to considerable lengths to seek out information, and make thorough comparisons before making their decision. Building brand loyalty is therefore an important aspect of marketing these products. Examples of speciality/luxury goods are cars, cosmetics and jewellery.

Marketing Goals

The role of marketing in a company must not be regarded as a business function, but a business philosophy. Simply defining marketing as the "Four P's" - product, price, place and promotion - is no longer practical in modern global markets. To establish and retain market leadership in an increasingly competitive environment, it is essential for marketers to constantly stay innovative and enhance customer experiences. Strategy development should be geared towards these goals:

  • Develop a successful customer- and market-focused business model.
  • Keep track of competitors' business strategies and tactics
  • Locate and profile potential markets.
  • Develop marketing research projects that generate action-oriented results.
  • "Bench-test" new marketing initiatives prior to implementation in order to enhance the likelihood of success.
  • Generate quality sales leads.
  • Develop effective selling tools.
  •  Tap current technology to enhance traditional marketing strategies, such as customer database management, and e-commerce applications.
  • Distinguish your product or service from those offered by your competitors.
  • Build and sustain customer relationships by creating value for the customers and identifying what you can do to keep them satisfied.
  • Develop, maintain and reinforce all corporate and brand images and symbols.
  • Establish your company as the market leader.

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