What is Product Classification? An Overview

Product classification refers to the systematic categorization of products based on their characteristics, purpose, and target audience. It is an essential concept in marketing and business operations, helping organizations streamline their strategies for production, distribution, and customer engagement.

Broadly, products are classified into consumer goods and industrial goods:

Consumer goods are those purchased by individuals for personal use, such as groceries, electronics, or clothing.
Industrial goods, on the other hand, are used by businesses for manufacturing or operations, such as machinery, raw materials, or tools.
Each category can further be divided into subcategories. For example, consumer goods can be classified as convenience goods, shopping goods, specialty goods, and unsought goods based on customer buying behavior. A well-defined product classification system allows businesses to understand market demand, enhance customer satisfaction, and optimize their marketing efforts.