Question

Consumer goods and services are generally classified into four specific categories. What are the four categories, and how do they differ? Give examples of products that are often included in each category.

Answer 1

Consumer goods and services can be classified as:

1. Convenience goods

Where the customers are aware of the goods and will accept any positive alternative to the one they currently have. They are mostly inexpensive and readily available, for example, we can consider toothpaste to be a convenience good.

2. Shopping goods

Which are relatively expensive and have a higher factor of differentiation than the competitors. For example, we can consider television to be a shopping product.

3. Specialty goods

Which serve a specific purpose and do not have a generalized use. They are exclusive, expensive and limited. For example a Rolex watch.

4. Unsought goods

Which represent goods that the customer isn't aware of, they can be cheap or expensive and the consumer might not know if they initially want it or not. For example a life insurance.

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