In marketing textbooks, when discussing the product mix, the consumer product classification system is usually discussed. Please note that there are several articles on this website relating to the consumer product classification system, such as how products are classified, examples of the different classes, and why this classification system is used.
As you probably know, consumer products are classified into four related sets of products, namely: convenience products, shopping products, specialty products and unsought products. However, this particular article discusses how the consumer products classification system helps guide marketers with the design of their marketing mix for convenience products.
The marketing mix for convenience products
As many consumers are purchasing convenience products because of habitual loyalty, two particular aspects of the product become quite important:
- The consistency of the product itself, and
- Easily recognized with consistent packaging.
In regards to convenience products, consumers are usually not shopping around for new brands and product solutions. They are usually happy with one to three brands within a product category and will regularly purchase one of those brands on a regular basis. Therefore, consistency of the product design and of the packaging is important – changes in product may lead to customer dissatisfaction and changes in packaging may lead to reduced recognition levels.
Because of the strong role of brand in the purchase decision (please see promotional mix below), convenience products offer the marketer significant opportunities for increased sales and market share through simple product line extensions. This is often true in food and beverage markets where variety of tastes provide benefits to consumers.
Pricing of convenience products is generally quite low. If you review the list of examples, you will see that many convenience products are lower cost items, which is important to consumers as they typically purchase these items on a frequent basis.
In addition to the lower price range, the consistency of pricing is important as consumers like the stability of the product-price offer for convenience products.
Generally products supported by stronger brands are able to charge a price premium. This is because of consumers’ attraction to better known brands, which they perceive to be a lower risk purchase decision as well as a strong brand being seen as a mark of quality.
Although crossing over with the promotional mix – please see below – the occasional sales promotion (discounting) is generally necessary to defend against competitive actions, to reward loyal customers and to win short-term brand switchers and perhaps encourage non-consumers into the product category.
Place is a highly critical component of the marketing mix. Intensive distribution needs to be achieved, with the product placed in as many suitable retailers as possible. For many products in this category, widespread supermarket, drug store and convenience store penetration is needed.
In addition to the extent of retailer penetration, it is also very important to have good in-store position and to support the product with visible point-of-purchase displays. As a result, strong retailer relationships are important in order to achieve a high level of product visibility in-store.
Because convenience products are often sold through 100s or 1000s of retail outlets, an efficient logistics system is necessary to avoid product stock-outs (and dissatisfied retailers as a result). Logistics are even more important for highly perishable products such as milk, bread, fruit and vegetables.
A highly efficient logistics system will also work to keep distribution costs low, which is supportive of the low price that is usually a requirement of a convenience product.
The two key elements of the promotional mix for convenience products is image advertising (brand building) and sales promotions.
Convenience products will benefit from a strong brand built through long-term image advertising. As many purchases are made on a low-involvement basis (that is, limited/no product research and the product purchase is often unplanned) consumers are often attracted to a well-known brand, as it represents a low-risk decision for consumers.
Sales promotions are another important element of the brand’s promotional mix. As most sales of convenience products occur through habitual loyalty (that is, repeat purchases by habit), one of the most effective ways of winning market share (at least in the short-term) is through sales promotions. Sales promotions are even more important for weaker brands in the marketplace.
Sales promotions also include trade promotions in this situation – trade promotions are incentives targeted at wholesalers and retailers for them to purchase a larger quantity of the product than normal. These channel partners can then pass some of these incentives onto the end-consumer in the form of a discount (effectively becoming a sales promotion for the consumer).
Please note that in order to effectively implement these trade promotions a large sales-force would be required.
The consumer products classification system
How products are classified in the consumer products classification system
Examples of the different classes in the consumer products classification system
Why the consumer products classification system is used
The marketing mix for shopping products
The marketing mix for specialty products
The marketing mix for unsought products