Product Type - Definition & Meaning
What is Product Type?
Product type is a group of products which fulfill a similar need for a market segment or market as a whole. Product type can also be defined as set of common specific characteristics in products or goods. These types can be on various parameters like :
Product types on the basis of offering:
•Goods: All tangible items can be classified as goods. For e.g. pen, bicycle, clothes etc.
•Services: It is the work done by a person or group which benefits others. It is intangible in nature and cannot be stored. Services end result could be a tangible product. For e.g. Banks, Salon, etc.
•Ideas: Ideas are the opinion put forward by business which motivates consumers to either take a stand on an issue or change positions.
Product types on the basis of purchase frequency:
•Convenience products: These products are consumed regularly and purchased very frequently for e.g. food, detergent, personal care products etc. Because of the high purchase volume, the cost of the product is generally low and thus profit per unit sold is also very low. Sales can be increased by selling huge volumes.
•Shopping products: Frequency of purchase is comparatively less. These are generally expensive products for e.g. Fashion clothes, household furnishings etc. These products provide more of an emotional benefit as consumers buy them to raise their status level in their social group.
•Specialty products: Very expensive products, thus customers are very selective and picky. These products are exclusive in nature for e.g. High end luxury cars, old artifact etc.
•Emergency Products: These are the products consumer buy without any planning and in case of some urgency. Customers seek convenience and buy anything in hurry to fix the problem.
•Unsought Products: These products purchase is also unplanned. Consumers purchase decision gets affected by the promotional activity, deep discounts and it forces customers to indulge in impulse buying.
Product types on the basis of their features:
•The differentiated product: These are the products that are diverse from other products that fall in the same product category. The differential claim may either be a real distinction on quality, ingredient, service etc., or it may be psychological distinction created through sales promotions.
•The customized product: These are tailor made products to fulfill customers need. These products demand high level of customer engagement for product designing.
•The augmented product: These products are created after adding extra features to the product by manufacturer to improve the value of the product. These changes are nor expected by the customers nor suggested by them.
•The potential product: Potential product is tomorrow’s product which has all the possible improvements and refinement. There is no limit to it, only a firm’s technological ability could limit it.
Hence, this concludes the definition of Product Type along with its overview.
This article has been researched & authored by the Business Concepts Team. It has been reviewed & published by the MBA Skool Team. The content on MBA Skool has been created for educational & academic purpose only.
Browse the definition and meaning of more similar terms. The Management Dictionary covers over 1800 business concepts from 5 categories.
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