Types and Benefits of Product Classification for Business Owners‍

As a business owner, before developing your promotional strategy, you firstly need to conduct a product classification. This process is crucial for understanding consumer behavior, and allows you to tailor your marketing strategy to the right audience, increase demand, influence pricing, and the distribution process.

Understanding Product Classification

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Product classification is a method of organizing products into various categories. These categories differ based on consumer buying behavior, similarities to competitor brands, and price ranges in the market.

Once product classification is done, it can greatly assist business owners in identifying the specific needs of consumers, serving as a guide when designing advertisements to ensure that the business's products or services align with consumer interests. 

1. Assists in Marketing Processes
   Product classification acts as a guide in crafting effective marketing strategies, which helps budget planning.
2. Simplifies Pricing
   When product classification is clear, product pricing is easier. 
3. Supports Innovation
   Product classification aids in product innovation, enabling you to readily identify which products or services are most popular among consumers, streamlining the development process.

Types of Product Classification

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Here are some types of product classifications that every business owner should be aware of:‍

1. Convenience Goods

‍Convenience goods are everyday necessities purchased by consumers who usually won't hesitate to buy these products because they are daily essentials. 

2. Shopping Goods‍

Shopping goods are items consumers spend more time deliberating before purchasing, factoring in product quality and price before making a decision.

3. Specialty Goods‍

Specialty goods are typically marketed to a specific consumer segment. Products in this category are usually more expensive but come with superior or long-lasting quality, such as electronics, cars, and jewelry.

4. Unsought Goods‍

Unsought goods are products that consumers rarely seek or purchase, such as  batteries which consumers buy only when needed.

It’s important to note that unsought goods often require more complex marketing efforts because these products are typically not top-of-mind for consumers. Therefore, for unsought goods, it is essential to increase brand awareness to make consumers aware of the product’s existence, by providing detailed information about how the product differs from competitors, including quality and price comparisons.

Those are the types and benefits of product classification for businesses. Once this classification is complete, marketing strategy formulation becomes easier. When your business is actively selling products to the market, use Youtap POS as a digital system to automatically record daily transactions. Additionally, this Digital POS Application comes equipped with advanced features that can make business operations more manageable, practical, and efficient.