Product
Definition: A product is the item offered for sale. A product can be a service or an item. It can be physical or in virtual or cybernetic form. Each product is made at a cost and each is sold at a price.
The price that can be charged depends on the market, the quality, the marketing and the segment to which it is directed.
Every product has a useful life after which it needs to be replaced, and a life cycle after which it must be reinvented.
In fast-moving consumer goods parlance, a brand can be revamped, relaunched, or expanded to make it more relevant to the segment and the times, often keeping the product much the same.
Description A product must be relevant: users must have immediate use for it. A product needs to be functionally capable of doing what it is supposed to do, and doing it with good quality.
A product needs to be communicated: Users and potential users need to know why they need to use it, what benefits they can get from it, and what difference it makes in their lives. Advertising and «brand building» are the best ways to do this.
A product needs a name: a name that people remember and relate to. A named product becomes a brand. Helps stand out from the clutter of products and names.
A product must be adaptable: With trends, time, and changing segments, the product must lend itself to adaptation to make it more relevant and maintain its revenue stream.
Product definition
A product is any good, service, or idea that can be offered to a market to satisfy a want or need.
Training Objectives
Break down the different components that make up tangible and intangible products
Key Takeout Places
Key points
Products can be goods, services, or ideas, such as intellectual property. In addition, products can be tangible or intangible. Products can also be classified by use, by brand, or by other classifications as well.
key terms
product: Any tangible or intangible good or service that is the result of a process and that is intended to be delivered to a customer or end user.
What is a product?
In general, a product is defined as a «thing produced by labor or effort» or the «result of an act or process.»
«The word «product» comes from the verb «to produce», from the Latin prōdūce(re) «(to) lead or bring forth. «Since 1575, the word «product» refers to anything produced.
In marketing, a product is anything that can be offered to a market that can satisfy a want or need. Similarly, in retail, products are called merchandise.
In manufacturing, products are purchased as raw materials and sold as finished products.
Commodities are usually raw materials like metals and agricultural products, but the term can also refer to anything that is widely available on the open market.
In project management, products are the formal definition of the project deliverables that form the project objectives.
Goods, services or ideas
Goods are a physical product that can be delivered to a buyer and that involves the transfer of ownership from the seller to the customer.
A service is a non-material action that results in a measurable change of state for the buyer caused by the provider.
Ideas (intellectual property) are any creation of the intellect that has commercial value, but is sold or traded only as an idea, and not as a service or resulting good.
This includes copyrighted property, such as literary or artistic works, and intellectual property, such as patents, designations of origin, trade practices, and industrial processes.
Product classification: Tangible or Intangible
A product can be classified as tangible or intangible.
A tangible product is a physical object that can be perceived by touch, such as a building, vehicle, or appliance. Most goods are tangible products. For example, a soccer ball is a tangible product.
Soccer Ball: A soccer ball is an example of a tangible product, specifically a tangible good.
An intangible product is a product that can only be received indirectly, such as an insurance policy.
Intangible data products can be categorized as virtual digital goods («VDGs»), which reside virtually on a computer operating system and are accessible to users as conventional file types, such as JPG and MP3 files.
Virtual digital products require further application processing or transformation work by programmers, so their use may be subject to licensing and/or digital transfer rights.
On the other hand, real digital goods («RDGs») may exist within the presentation elements of a data program independently of a conventional file type.
Real digital goods are commonly viewed as three-dimensional objects or presentation items subject to user control or virtual transfer within the same visual media software platform.
Services or ideas are intangible.
Product classification: By use or by association
In its online product catalog, retailer Sears, Roebuck and Company divides its products into «departments,» then presents products to potential buyers based on function or brand.
Each product has a Sears item number and a manufacturer model number. Departments and product groups are used by Sears with the intention of helping customers navigate products by function or brand within a traditional department and store structure.
A product line is «a group of products that are closely related, either because they function in a similar way, are sold to the same customer groups, are marketed through the same types of outlets, or are located within certain price ranges.
«Many companies offer a range of product lines that may be unique to a single organization or may be common across the company’s industry.
In 2002, the United States Census compiled revenue figures for the insurance and financial industry for various product lines, such as «accident, health, and medical insurance premiums» and «guaranteed consumer loan revenue.»
«Within the insurance industry, product lines are indicated by the type of risk coverage, such as auto insurance, business insurance, and life insurance.
Benefits and solutions
The primary benefit is what consumers feel they are getting when they buy a product.
Training Objectives
Review the four levels of product differentiation
Key Takeout Places
Key points
The same product may have different primary benefits for different users. For example, one user may install a swimming pool for fitness purposes, while another may by state.
Different target markets will have different core products, and it is up to the marketer to figure out which markets their particular product should target.
Other product benefit layers are tangible product, augmented product, and promised product. These also affect the buyer’s decision making, and cannot be ignored by the seller.
key terms
Main product: The main product identifies what consumers feel they are getting and then they buy the product.
The tangible product: The tangible product is reflected in quality, features, brand name, style, and packaging.
The augmented product: The support services that surround the product, such as the after-sales service of a machine or the parking spaces in a shopping center.
Benefits and solutions
The four levels of a product include: basic, tangible, augmented, and promised. Basic, tangible, augmented, and promised products present features (ie, the total product concept or offering), which includes everything a consumer evaluates before making a purchase. These factors may include:
Product Levels: The four levels of a product include core, tangible, augmented, and promised.
Price Store environment and/or surroundings Brand value/promise Advertising and marketing activities Buyer experience Accessibility or convenience Brand reputation Packaging
We start with the notion of the main product, which identifies what consumers feel they are getting when they buy the product.
The primary benefits derived when an overweight 45-year-old man purchases a $250 ten-speed bicycle are not transportation, but the hope of better health and fitness.
Similarly, that same individual may install a $16,000 pool in their backyard, not for exercise, but to reflect the state they so desperately want.
Legitimate Products
Both are legitimate product cores. Because the core product is so individualized, and often vague, a full-time task for the salesperson is to accurately identify the core product for a particular target market.
Once the main product has been indicated, the tangible product becomes important.
This tangibility is primarily reflected in its level of quality, features, brand name, style, and packaging. Literally every product contains these components to a greater or lesser degree.
Unless the product is unique (for example, an oil paint), the consumer will use at least some of these tangible characteristics to evaluate alternatives and make decisions.
Also, the importance of each will vary across products, situations, and individuals. For example, for a 25-year-old man, the selection of a particular brand of new car (main product = transportation) was based on tangible elements such as style and brand (choice = Corvette).
By contrast, at 45 years old, the core product remains the same, but tangible components like quality level and features are more important (choice = Mercedes).
The next level is the augmented product. Each product is backed by a host of support services.
The buyer often expects such services and will reject the tangible commodity if they are not available.
Examples include restrooms, escalators, and elevators in the case of a department store, and warranties and return policies in the case of a lawn mower. For example, Dow Chemical has earned a reputation as a company that will go above and beyond to service an account.
This means that a Dow sales representative will visit a problem farmer outside of business hours to resolve a serious problem.