Page 522 - Encyclopedia of Business and Finance

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Marketing Mix

Durable and Nondurable Goods. Products are classified Nonuniform shopping goods are those goods that differ
by how long they can be used—durability—and their tan- in both quality and price.
gibility. Products that can be used repeatedly over a long Specialty goods are products with distinctive charac-
period are called durable goods. Examples of durable teristics or brand identification for which consumers
goods include automobiles, furniture, and houses. By con- expend exceptional buying effort. Specialty goods include
trast, goods that are normally used or consumed quickly specific brands and types of products. Typically, buyers do
are called nondurable goods. Some examples of non- not compare specialty goods with other similar products
durable goods are food, soap, and soft drinks. In addition, because the products are unique. Unsought goods are
services are activities and benefits that are also involved in those products or services that consumers are not readily
the exchange process but are intangible because they can- aware of or do not normally consider buying. Burial plots
not be held or touched. Examples of intangible services and life insurance policies are examples of unsought
included eye exams and automobile repair. goods. Often, unsought goods require considerable pro-
motional efforts on the part of the seller in order to attract
Categorizing Products by Their Users. Another way to the interest of consumers.
categorize products is by their users. Products are classified
Business goods. Business goods are those products used
as either consumer or business goods.
in the production of other goods. Examples of business
Consumer goods. Consumer goods are purchased by goods include accessory equipment, component parts,
final consumers, sometimes called end users, for their per- installations, operating supplies, raw materials, and serv-
sonal consumption. The shopping patterns of consumers ices. Accessory equipment refers to movable items and
are also used to classify products. Products sold to the final small office equipment items that never become part of a
consumer are arranged as follows: convenience, shopping, final product. Office furniture and fax machines are exam-
specialty, and unsought goods. Convenience goods are ples of accessory equipment. Component parts are prod-
products and services that consumers buy frequently and ucts that are turned into a component of the final product
with little effort. Most convenience goods are easily which does not require further processing. Component
obtainable and low-priced, items such as bread, candy, parts are frequently custom-made for the final product of
milk, and shampoo. which they will become a part. For example, an automatic
Convenience goods can be further divided into sta- transmission could be produced by one manufacturer for
ple, impulse, and emergency goods. Staple goods are use in an automobile made by another manufacturer.
products—such as bread and milk, coffee, and tooth-
Installations are capital goods that are usually very
paste—that consumers buy on a consistent basis. Impulse expensive but have a long useful life. Mainframe comput-
goods such as magazines and candy are products that
ers, power generators, and trucks and other heavy equip-
require little planning or search effort because they are
ment are examples of installations. Operating supplies are
normally available in many places. As impulse goods,
similar to accessory equipment in that they do not
candy and magazines are frequently located near checkout
become part of the finished product. Operating supplies
counters in grocery stores. Emergency goods are bought
include items necessary to maintain and operate the over-
when consumers have a pressing need for a product, such
all firm, such as cleaners, file folders, paper, and pens. Raw
as during a natural disaster. An example of an emergency
materials are goods sold in their original form before
good would be the purchase of a generator when the elec-
being processed for use in other products. Crops, crude
tricity is expected to be out for a considerable time, such
oil, iron ore, and logs are examples of raw materials in
as after a severe ice storm.
need of further processing before being used in products.
Shopping goods are those products that consumers The last category of business goods is services. Orga-
compare during the selection and purchase process. Typi-
nizations sometimes require the use of services, just as
cally, factors such as price, quality, style, and suitability are individuals do. Examples of services sought by organiza-
used as bases of comparison. With shopping goods, con-
tions include maintenance and repair and legal counsel.
sumers usually take considerable time and effort in gath-
ering information and making comparisons between
products. Major appliances such as refrigerators and tele- PRICE
visions are typical shopping goods. Shopping goods are Price is the second element of the marketing mix. Price is
further divided into uniform and nonuniform categories. the value exchange that occurs between buyers and sellers
Uniform shopping goods are goods that are similar in for a product or service. Factors related to price include
quality but which differ in price. Consumers will try to legal and regulatory guidelines, pricing objectives, pricing
justify price differences by focusing on product features. strategies, and options for increasing sales.

ENCYCLOPEDIA OF BUSINESS AND FINANCE, SECOND EDITION 499