Product

A product is anything that is created or developed to meet the needs or desires

of customers. It can be a physical item, such as a phone or a car, or an intangible
offering, such as a service or digital content like apps and online courses.
Products are designed to solve a problem, fulfill a need, or provide value to
users. They can vary widely, from everyday essentials like food and clothing to
specialized goods like medical devices. For example, a product could be a
software program developed to improve workplace efficiency or a smartphone
designed to simplify communication.

Products play a vital role in businesses as they generate revenue and help
create a brand identity. A product often goes through various stages, from
design and development to testing and marketing, to ensure it meets customer
expectations. It can also be categorized based on its type, such as consumer
products (used for personal needs) or industrial products (used in business
operations). Ultimately, a good product not only fulfills a functional need but
also builds trust and loyalty among customers, helping businesses grow and
thrive.

Characteristics of a Product
Tangible
A tangible product is something physical that customers can see, touch, and
feel. Examples include furniture, clothing, and gadgets. Tangible products are
often associated with quality, durability, and appearance, which play a major
role in influencing customer purchasing decisions. For businesses, maintaining
the physical aspects of a tangible product, such as packaging, design, and
functionality, is critical to attracting buyers.

Intangible
An intangible product refers to offerings that cannot be physically touched but
deliver value to customers. These include services like insurance, education, or
entertainment subscriptions. Intangible products often rely on factors like
reliability, user experience, and the expertise of the service provider to ensure
customer satisfaction. These products are essential in industries like technology,
finance, and healthcare.
Associated Features
Products are not just limited to their core function but are often associated with
additional features that enhance their value. These can include warranties,
customer support, or complementary services. For instance, a smartphone may
come with a warranty, technical support, and access to exclusive apps, which
add to its overall appeal and functionality.

Exchange Value
A product has value in the marketplace because it can be exchanged for money
or other resources. The price of the product represents the perceived value it
offers to the consumer. Whether it’s a cup of coffee or a luxury car, the product
must provide benefits that justify its cost, ensuring a fair exchange between the
seller and the buyer.

Consumer Satisfaction
The ultimate goal of any product is to satisfy the needs and wants of its
customers. A product that meets or exceeds expectations creates satisfaction,
leading to customer loyalty and positive word-of-mouth. For example, a well-
functioning appliance or a high-quality streaming service ensures repeat
customers and strengthens the product's market position.

Levels of a Product
Products can be understood in terms of different levels, each representing a
distinct value or feature that meets customer needs. These levels range from
the core benefit to potential enhancements. Below are the five levels of a
product:

1. Core Benefit
The core benefit is the fundamental need or problem the product aims to
address. It represents the primary value or solution that customers seek. For
example, the core benefit of a car is transportation, while the core benefit of a
smartphone is communication. At this level, the focus is solely on the essential
purpose of the product, which drives its demand in the market.

2. Generic or Basic Product

The generic or basic product refers to the essential features and functionalities
that make the product usable. It includes the minimum elements required for
the product to fulfill its core benefit. For instance, the basic product for a car
includes an engine, wheels, and seats, while for a smartphone, it includes a
screen, battery, and basic software.

3. Expected Product
The expected product encompasses the set of attributes or features that
customers anticipate when they purchase the product. These are the standard
expectations based on market norms and customer needs. For example, when
buying a car, customers expect safety features, fuel efficiency, and air
conditioning. Similarly, for a smartphone, users expect a good camera, internet
connectivity, and a user-friendly interface.

4. Augmented Product
The augmented product includes additional features, benefits, and services that
go beyond customer expectations to differentiate the product from
competitors. These enhancements create added value and increase customer
satisfaction. For example, a car with a premium sound system, extended
warranty, and free servicing adds augmented value. Similarly, a smartphone
offering cloud storage, customer support, and software updates elevates its
appeal.

5. Potential Product
The potential product represents the future possibilities and innovations that
could be added to enhance the product further. It includes all the features or
benefits that a product could offer to retain customers and stay competitive. For
example, a potential product for cars might include self-driving capabilities or
advanced connectivity features. For smartphones, it could involve integration
with artificial intelligence or futuristic design elements.

Classification of Products
Products are broadly classified into Consumer Products and Industrial Goods,
each catering to different customer needs and markets. Here's a detailed
explanation of the categories:
1. Consumer Products
Consumer products are goods purchased by individuals for personal use. They
are classified based on buying behavior, frequency of purchase, and level of
involvement.

a. Convenience Products
Convenience products are low-cost, frequently purchased items that require
minimal effort and decision-making. Examples include snacks, toiletries, and
everyday groceries. These products are readily available and often bought
impulsively.

b. Shopping Products
Shopping products are items that customers purchase after careful comparison
of quality, price, and features. These products require more time and effort to
evaluate. Examples include clothing, electronics, and furniture. Buyers are
willing to visit multiple stores or research online before making a decision.

c. Specialty Products
Specialty products are unique or high-end items that have significant brand
loyalty or appeal to a niche market. Customers are willing to go to great lengths
to obtain these products, often disregarding price or availability. Examples
include luxury cars, designer clothing, and branded jewelry.

d. Unsought Products
Unsought products are items that consumers do not actively seek or think of
buying until a need arises. Examples include life insurance, funeral services, or
emergency medical equipment. These products often require aggressive
marketing or sales efforts to create awareness and demand.

2. Industrial Goods
Industrial goods are products used by businesses for production, operations, or
resale. They are essential for creating other goods or services and are
categorized based on their function and usage.

a. Raw Materials
Raw materials are the basic inputs used in the production process. Examples
include wood for furniture, cotton for textiles, and metals for machinery. These
materials are typically purchased in bulk and transformed into finished
products.

b. Capital Equipment
Capital equipment includes long-term assets like machinery, tools, or large
equipment used to produce goods and services. Examples are factory machines,
construction vehicles, and printing presses. These are significant investments for
businesses and essential for operations.

c. Accessory Equipment
Accessory equipment includes less expensive and smaller tools or devices that
aid in business operations but are not directly involved in production. Examples
include office furniture, computers, and printers. These are shorter-term assets
compared to capital equipment.

d. Component Parts
Component parts are pre-made items that are integrated into a final product.
For example, car manufacturers use tires, engines, and batteries as component
parts. These are often produced by specialized suppliers.

e. Process Materials
Process materials are goods that are used during manufacturing but do not
form part of the final product. Examples include lubricants, cleaning chemicals,
and adhesives used in production.

f. Supplies
Supplies are items used to support day-to-day business operations. These
include office supplies, janitorial products, and fuel. While not directly involved
in production, they are necessary for maintaining business efficiency.