Hierarchical Analysis of Industries
Classes, categories, forms, brands
Product hierarchy is a term which defines the way a product is relative to other products in the same industry. It guides the path and process a consumer takes to determine the products we choose and we eventually purchase. To start off we look at a basic need that our ultimate choice serves. After we identify the need and determine which industry will satisfy it we are faced with decisions. Which class of products in that industry will deliver that type of product? The different classes all serve a need that is relative to each other but may not serve the specific need. This is where we identify which category of ...view middle of the document...
The industry is divided into 4 classes: Savings, Diversified Investments, Insurance and Real Estate. Since our need falls under the first class of “Savings” it is not necessary to break down the other branches of the industry and explain all the choices they have.
In order to open a checking account for example they would decide at the class level what type of institution would suit their needs.
At the category level there are choices such as, should you use a credit union or a traditional commercial bank. Both serve the same general service but credit unions tend to be smaller and more community or organization oriented. They might be affiliated with a certain geographic area or group of professionals like teachers for example. They are also non-profit financial institutions owned by their members and run by a board of directors which are typically their members. They appear to offer a more personal service which is their point of marketing it. Banks could be as small as community based or as large as national organizations but they are for-profit businesses. The board of directors of a bank is chosen by the stockholders (private investors). Also will you need on-line or in-person services. There are many institutions which advertise to fill the needs of one or the other (or both) of these consumers. For example a business professional that travels often would not have the time to physically stop by a bank branch to take care of their needs. In this case, a full service on-line institution would better serve that customer. The customer who needs to sit down with a customer service representative to assist them in some way would possibly choose a bank branch for in-person service.
Once that decision is made a customer would determine which specific form of the product is necessary. In this industry for example, a customer might be looking for service in checking, savings, certificate of deposits, mortgages or bill paying, etc. At this level I believe the company uses marketing strategies to show the benefits of their brand and the attributes of their products which ultimately will help the consumer choose a specific brand or in this case institution such as CHASE BANK for example.
2. The end goal is to purchase running shoes but the basic need we are looking to fill here is to clothe ourselves.
Category Clothes/ Shoes/ Accessories
The general industry that running shoes are in is the Apparel industry. The class that this need falls into could be either men’s, women’s or children’s apparel. A similar need can be met in either of these classes but for a different target market. There is no substitutability at this level. In this...