Hierarchical Analysis of Industries

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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 product we are looking for. Here we will find products that serve similar functions and may be marketed to the same customer groups. To further narrow down our choices we must then select a product form that may serve a specific function. This is where we find the exact product that fills the ultimate need. Finally we make our end choice by choosing the brand of that product that will purchase. The actual number of levels in the hierarchy depends on how much more detailed or defined the need is. For example if someone wants soap and their only need is to clean something generic, they wouldn’t dig deeper into the types of soap they are looking for rather than looking for a specific type of cleaning agent for granite counter tops for example. To further explain and give examples of how a product falls into a product hierarchy I will look at five different industries. 1. In the first instance the consumer’s end goal is to open a checking account and the basic need is security.

Industry
Finance|

Class| Savings| Diversified Investments| Insurance| Real Estate| Category| Bank/Credit Union and Online or in person| | | | Form| Checking, Savings, CD’s, Credit Cards, Bill Payment| | | | Brand| CHASE| | | |

A consumer would first decide which area of the industry they need. 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...
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