Ideally your company will have a portfolio of products, all at different stages in their life cycle, so that balanced growth can be achieved and risks minimized.
From a marketing point-of-view there are three basic types of products. These are:
There are, of course, some products that could be in all three categories. Paint is an examples. It can be purchased by both consumers and industrial companies and can also be part of the ‘service offering’ given by a house-decorating company. It is also true that not all industrial goods are capital goods and that some consumer goods such as houses or cars are capital items to the purchaser. Nevertheless, these broad definitions hold in most cases and key marketing principles apply equally to the marketing of consumer goods, capital goods and services. It is just the way that the principles are applied that takes a different form.
Consumer markets are characterized by having a large number of customers. By their very nature goods are usually items that are mass-produced in identical form. There are two basic types of consumer goods: fast-moving consumer goods and consumer durables.
Industrial goods are any goods sold by industrial companies to manufacturers, suppliers, contractors or government agencies. The goods would normally be incorporated into other products, used within the company’s own business or resold. Industrial goods can be raw materials, components or capital goods. The ultimate consumer of the final product probably has little interest in the raw are often sold directly to the end-user – this is almost never the case with consumer goods, which are usually sold through complex distribution networks.
The third basic type of product is a service. By this we do not mean the customer service that most reputable companies supply with their products, but a service as a product in its own right.
Services range from financial services such as banking and insurance to car hire and carrying out computer repairs. They differ from consumer and industrial goods in that in a service industry there is no tangible product and the product has no shelf life. Service organizations sell the benefits of their service as their product. This is an important fact that influences the way in which services are marketed.
Throughout this book, we will use examples to illustrate how various marketing tools and techniques can be used by companies selling consumer goods, services and industrial goods. For these examples we will use three fictitious companies: