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Convenience products, though inexpensive, still require considerable shopping effort by buyers.
What Is a Convenience Good?
A convenience good is a consumer item that is widely available and purchased
frequently with minimal effort. Since a convenience good can be found readily, it does not typically involve an intensive decision-making process. Convenience goods, such as newspapers and candy, are different than specialty goods, such as cars, which are more expensive and often carry a greater opportunity cost for the
consumer.
- What Is a Convenience Good?
- Key Takeaways
- Understanding Convenience Goods
- Convenience Goods and Substitutes
- Convenience Products
- Shopping Products
- Speciality Products
- Unsought Products
- What are relatively inexpensive items that require little shopping effort?
- What are the convenience products?
- What does the convenience product marketing strategy include?
- How do convenience products and shopping products differ?
Key Takeaways
- Convenience goods are often purchased through habit or impulse and are relatively inexpensive.
- Pricing is important for convenience goods to ensure that demand for them among consumers does not wane with the ebbs and flows of mainstream markets.
- The
inexpensive price of consumer goods makes them susceptible to being exchanged for substitutes.
Understanding Convenience Goods
Convenience goods are often purchased through habit or impulse because they are easily obtained by consumers and relatively inexpensive. The inexpensiveness of a good can be dependent on the income of the consumer, so
economists often use the cost of a good to the average consumer when determining if a good is inexpensive.
If
discretionary income falls, consumers may forego purchasing goods impulsively. For this reason, product managers need to determine viable pricing points to ensure that demand for convenience goods does not wane with unpredictable market behavior.
Consumers are sensitive to convenience
good price changes. Marketers need to consider price increases with respect to demand for items that a buyer may bypass due to a price hike. The objective for suppliers is to strike a balance between price movement and demand so that an incremental increase does not adversely affect the quantity sold. For instance, if the price of
a candy bar is and the supplier sells 1,000 bars in a month for ,000, then a price increase to .25 would necessitate the sale of 800 units to equal the same amount of revenue.
Price elasticity of demand equals the percentage change of the quantity demanded/percentage change in price, where the goal is to maintain relative inelasticity with a resultant value less than one. Relative inelasticity exists when large price fluctuations do not significantly change demand.
Convenience Goods and Substitutes
The purchase price of a convenience good largely determines whether a consumer chooses to buy the item. These inexpensive, spontaneous purchases result from conspicuous demand that differs from the decision to purchase gasoline and other necessary consumer nondurables.
Food and fuel have no
substitutes. Convenience goods, by contrast, give the buyer greater choice. If a consumer purchases a bag of peanuts every day at a local shop for and the price of peanuts increases to , the purchaser may forego the purchase or opt for a bag of almonds at a price of .25.
Unlike essential
goods such as gasoline, convenience goods have many substitutes that a consumer can purchase instead if prices rise.
Consumer products are often classified into four groups related to different kinds of buying decisions: convenience, shopping, specialty, and unsought products. These are described below.
Convenience Products
A convenience product is an inexpensive product that requires a minimum amount of effort on the part of the consumer in order to select and purchase it. Examples of convenience products are bread, soft drinks, pain reliever, and coffee. They also include headphones, power cords, and other items that are easily misplaced.
From the consumer’s perspective, little time, planning, or effort go into buying convenience products. Often product purchases are made on impulse, so
availability is important. Consumers have come to expect a wide variety of products to be conveniently located at their local supermarkets. They also expect easy online purchase options and low-cost, quick shipping for those purchases. Convenience items are also found in vending machines and kiosks.
For convenience products, the primary marketing strategy is extensive distribution. The product must be available in every conceivable outlet and must be easily
accessible in these outlets. These products are usually of low unit value, and they are highly standardized. Marketers must establish a high level of brand awareness and recognition. This is accomplished through extensive mass advertising, sales promotion devices such as coupons and point-of-purchase displays, and effective packaging. Yet, the key is to convince resellers (wholesalers and retailers) to carry the product. If the product is not available when, where, and in a form the
consumer desires, the convenience product will fail.
Shopping Products
In contrast, consumers want to be able to compare products categorized as shopping products. Shopping products are usually more expensive and are purchased occasionally. The consumer is more likely to compare a number of options to assess quality, cost, and features.
Although many shopping goods are nationally advertised, in the marketing strategy it is often the ability of the retailer to
differentiate itself that generates the sale. If you decide to buy a TV at BestBuy, then you are more likely to evaluate the range of options and prices that BestBuy has to offer. It becomes important for BestBuy to provide a knowledgeable and effective sales person and have the right pricing discounts to offer you a competitive deal. BestBuy might also offer you an extended warranty package or in-store service options. While shopping in BestBuy, consumers can easily check prices and
options for online retailers, which places even greater pressure on BestBuy to provide the best total value to the shopper. If the retailer can’t make the sale, product turnover is slower, and the retailer will have a great deal of their capital tied up in inventory.
There is a distinction between heterogeneous and homogeneous shopping products. Heterogeneous shopping products are unique. Think about shopping for clothing or furniture. There are many stylistic
differences, and the shopper is trying to find the best stylistic match at the right price. The purchase decision with heterogeneous shopping products is more likely to be based on finding the right fit than on price alone.
In contrast, homogeneous shopping products are very similar. Take, for example, refrigerators. Each model has certain features that are available at different price points, but the basic functions of all of the models are very similar. A
typical shopper will look for the lowest price available for the features that they desire.
Speciality Products
Specialty goods represent the third product classification. From the consumer’s perspective, these products are so unique that it’s worth it to go to great lengths to find and purchase them. Almost without exception, price is not the principle factor affecting the sales of specialty goods. Although these products may be custom-made or one-of-a-kind, it is also possible
that the marketer has been very successful in differentiating the product in the mind of the consumer.
Blizzcon attendees,
2014
For example, some consumers feel a strong attachment to their hair stylist or barber. They are more likely to wait for an appointment than schedule time with a different stylist.
Another example is the annual Blizzcon event produced by Blizzard Entertainment. The 0 tickets sell out minutes after they are released, and they are resold at a premium. At the event, attendees get the chance to learn about new video games and play games that have not yet been
released. They can also purchase limited-edition promotional items. From a marketer’s perspective, in Blizzcon the company has succeeded in creating a specialty product that has incredibly high demand. Moreover, Blizzard’s customers are paying for the opportunity to be part of a massive marketing event.
It is generally desirable for a marketer to lift her product from the shopping to the specialty class—and keep it there. With the exception of price-cutting, the entire range of
marketing activities is needed to accomplish this.
Unsought Products
Unsought products are those the consumer never plans or hopes to buy. These are either products that the customer is unaware of or products the consumer hopes not to need. For example, most consumers hope never to purchase pest control services and try to avoid purchasing funeral plots. Unsought products have a tendency to draw aggressive sales techniques, as it is difficult to get the
attention of a buyer who is not seeking the product.
What are relatively inexpensive items that require little shopping effort?
What are the convenience products?
What does the convenience product marketing strategy include?
How do convenience products and shopping products differ?
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