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Consumer Goods Classification

Commodity Approach (Copeland, 1923) The commodity approach to consumer goods classification looks at the nature of the product (brand, characteristics, price) to determine how a product is classified.  This approach to goods classification was developed when branding was less important and consumers purchases commodities versus a specific brand.  Under the commodity approach, a product can only placed into one of the goods classifications. Convenience Goods:
  1. Staple Goods (milk, butter, eggs, bread, sugar)
  2. Impulse Goods (unplanned purchases - candy, magazines)
  3. Emergency Goods (gasoline when tank almost empty, medical care)
  4. Unsought Goods (encyclopedias, funerals, life insurance)
Shopping Goods:
  1. Homogeneous Shopping Goods (consider items to be similar in nature - select lowest priced item)
  2. Heterogeneous Shopping Goods (perceives items to be different - select on basis of characteristic, beyond price.)

Institutional Approach to Store Classification

Under the institutional approach to store classification a store is classified based on depth and width of merchandise offering.

Convenience Store:
Narrow and shallow - carries few product lines and offers very little variety within product lines (e.g., 7-11, Mac's Milk, Beckers) - cigarettes, soft drinks, and chips (snacks) tend to have greatest depth;  most of other product lines offered are vary narrow (1 or 2 brands/types)

Shopping Store:
Deep and wide - carries many different product lines and has a great deal of variety within different product lines (e.g., Sears, Hudson's Bay - i.e., department stores) - men's wear, women's wear, children's wear, housewares, appliances, electronics, cosmetics, furniture, lighting, toys, hardware, sporting goods, candy, carpeting, etc.

Specialty Store:
Narrow and deep - Focuses on one or a a select number of product lines but offers a great deal of variety within the product lines carried [Living Lighting, Jeans Junction, Tie City, Dairy Queen, Home Depot, Tim Hortons, Big & Tall Men's Wear, Penningtons (larger sizes of fashions for women) jewellery store, men's wear store, women's wear store, computer store, supermarket)]

Types of Specialty Stores:

A single-line specialty store focuses primarily on one line of merchandise (e.g., food - supermarket).  A limited-line specialty store sells only a part of a single line (e.g., bakery).  A super-specialty store sells only part of the limited-line offering (donuts).
The merchandise line moving from a single-line to a limited-line to a super-specialty store becomes progressively narrower and deeper.  Baskin Robbins sells more different flavours of ice cream than would be found in less specialized dairy stores.

Under the institutional approach, a particular store can only be placed into one of the store classifications.

Behavioural Approach to Product/Store Classification

The behavioural approach to consumer goods and store classification classifies these entities based on the behavioural intent of the consumer, not the nature of the goods and stores.  The resulting analysis leads to the Product-Patronage Matrix (Bucklin, 1964).
Product-Patronage Matrix
Product/Store Convenience Store Shopping Store Specialty Store
Convenience Good
MRAS (9)
MPS (6)
Shopping Good
MRAS (7)
MPS (4)
Specialty Good
MRAS (8)
MPS (5)
MRAB = Most Readily Accessible Brand
MRAS = Most Readily Accessible Store
MPB = Most Preferred Brand
MPS = Most Preferred Store

If a consumer indicates that when he/she shops for a particular product category (e.g., toothpaste), he/she selects the Most Readily Accessible Brand (MRAB), then, for that consumer, the product category is a Convenience Good.  If a consumer indicates that he/she compares different brands, then, for that consumer, the product category is a Shopping Good.  If a consumer indicates that he/she seeks out a preferred brand (MPB), then, for that consumer, the product category is a Specialty Good.

If a consumer indicates that when he/she shops for a particular product category (e.g., toothpaste), he/she goes to the Most Readily Accessible Store (MRAS), then, for that consumer, the store selected is a Convenience Store. If a consumer indicates that he/she compares the merchandise offering (e.g., brands of toothpaste) of different stores, then, for that consumer, the store selected is a Shopping Store.  If a consumer indicates that he/she seeks out the most preferred store (MPS), then, for that consumer, the store selected is a Specialty Store.

Based on this analysis, each consumer can be placed into one of the nine cells of the matrix, indicated how he/she shops product and stores.  The result of the analysis is the identification of nine possible market segments.  However, it is unlikely that all of the cells would contain consumers for a particular product/store shopping situation.

What is important is the "intent" of the consumer, not necessarily the actual behaviour.  If a consumer is standing outside a particular store and decides to go into the store to make a purchase, that store may appear to be the "most readily acceptable" (i.e., convenience store), but in fact may be the customer's "most preferred store"  (i.e., specialty store).

How consumers shop brands and stores has an implication on the distribution policy of the manufacturer and the inventory policy of the retailer.  If consumers do not care which brand of a product is purchased, then the manufacturer would want to maximize the intensity of distribution in order to ensure brand exposure (i.e., intensive distribution).  Similarly, if a retailer realizes that consumers like to compare different brands of a product, then the retailer would want to carry at least two brands within the product category so that the comparison occurs within versus across stores.  And if consumers have a preferred brand, a retailer just needs to carry the identified preferred brands.

By analyzing the different cells of the Product-Patronage Matrix, it is also possible to determine the level of shopping effort expended by the consumer.  Cell number (1), Shopping Good/Shopping Store, reflects the market segment with the greatest amount of shopping effort on the part of the consumer.  Cell number (9), Convenience Good/Convenience Store, reflects the cell with the least amount of shopping effort.  The remaining cell numbers reflect the sequential level of shopping effort.  It is assumed that shopping stores (i.e., inter-store comparisons) requires more effort than shopping brands (i.e., inter-brand comparisons).

Under the behavioural approach to consumer goods and store classification, a particular product can fall into any of the possible product classifications and a particular store can similarly be placed into any of the store classifications. It is the intent of the consumer, not the product/store characteristics that determine the nature of the classification under the behavioural approach.  Furthermore, for a particular consumer, how a particular product and store will be perceived can vary across situations.  The normal purchase of gasoline may reflect a specialty good/specialty store classification, but in the case of an emergency (i.e., almost out of gas), the same consumer's shopping behaviour may reflect a convenience good/convenience store situation.

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