A Provider-Cost Patron-Effort Schema for Classifying Products

Abstract

Since the commodity-oriented thinkers of marketing's early history, marketers have sought a valid schema for classifying products. Currently, the marketing literature is dominated by two types of schemata for classifying products: product-based and consumer cost-based. Despite marketing tenets such as exchange is the focal notion of marketing and good marketing theory integrates the perspectives of firms and consumers, no existing schema embodies either exchange or a dual firm/consumer perspective. After reviewing the existing classificational schemata, one such schema is proposed and evaluated. The two classifying dimensions of this schema are providers' relative variable costs (PRVC) and patrons' relative effort (PRE). Crossing high and low levels of PRVC and PRE yields four product categories: low cost/effort, patron-effort heavy, provider-cost heavy, and high cost/effort.