What is a product
According to Marketing XXI, a product is a combination of tangible characteristics and attributes (shape, size, color, etc.) and intangible ones (brand, company image, service, etc.) that the buyer initially accepts as something that will satisfy their needs.
Therefore, in marketing, a product does not exist until it responds to a need or a desire.
Seeking a simple definition of a product might be unwise. An item is defined in various ways depending on where it’s used. A product is anything that is produced. It’s the result of a mathematical function. An idea is also a product of someone’s thought process. However, what we are interested in here is understanding what it means in relation to businesses. Products are items sold to consumers to satisfy their needs. They can be physical, virtual, or hybrid.
A product must provide value to customers. They should be able to benefit from it. Users must receive quality service from the product. All products are manufactured at a cost, and businesses recuperate this from the price charged to the consumer. These items provide benefits for businesses and livelihood for many people. While in the early days, people traded them for other things, today, nearly all products are sold for money. Some are sold to consumers; others to businesses that use them to manufacture other products.
Types of Products
Although there are millions of products in the world, they can easily be classified into ten categories. The first four are related to consumer goods, while the rest are industrial products. The classification is based on the target buyer, buyer behavior, and the purpose of the item. It’s essential for anyone studying a product to understand which category it belongs to.
1. Convenience Products
These are items that people frequently buy when they run out. Consumers don’t think much when purchasing these products. People buy these items more often, and they tend to be economical, essential, and accessible. Buyers generally don’t switch the brand they buy, and there’s not much comparison with other similar products available in the market. Introducing such a product to a customer is difficult, and there must be something special for the customer to try it. Consumers may only buy a new brand if their usual brand is not available.
One way to market this product is to create attractive advertisements without much information. Another way to attract customers to buy them is to place the new brand near the checkout line in a supermarket. People don’t view all convenience products in the same way. There might be some items that buyers will switch brands for, while in the case of others, people will prefer to continue buying their usual items. To understand this better, these goods can be classified into three categories.
- Frequently used items: These are the items that people buy most often. Buyers generally stick to the same brands because it saves a lot of time.
- Impulse purchases: These don’t appear on the shopping list. Customers see them in the store and decide to buy them due to a sudden desire.
- Emergency purchases: These items also don’t appear on the shopping list. But people know they need the items before seeing them. They differ from impulse purchases in that these goods are a response to a problem rather than a craving.
2. Shopping Goods
People distinguish between buying their daily necessities like food and “going shopping.” The term usually refers to purchasing items like clothing, gadgets, furniture, etc. Expensive products like cars and properties are also included in this category. People make personal decisions when buying these items. Moreover, such products aren’t bought frequently, so people spend a lot of time looking at options and comparing them. Various factors like quality, features, price, style, and suitability influence the purchase.
As buyers spend a lot of time researching the product, this allows companies to influence them. A wealth of information can be provided to the customer through marketing studies. Businesses can use advertisements to highlight features that set their items above the competition. Marketing teams can utilize various digital platforms for this purpose. Publishing marketing content through websites and social media platforms is probably one of the best ways. Influencing existing customers to spread the benefits of the products is another effective method. This category of products can also be divided into two.
- Homogeneous Products – These are items that customers perceive as similar in every aspect except for the price. Appliances are typical examples of such products.
- Heterogeneous Products – Consumers consider similar products in this category to be different from each other in quality or features. The difference can be real or perceived. Such products allow companies to highlight the quality of goods instead of focusing on the price. Having various views of these items helps recommend the right ones to different customers.
3. Specialty Products
These are items that have unique features or strong brand recognition. Specialty products are unique offerings, and customers generally don’t prefer to switch loyalties when it comes to these goods. People generally don’t change the car brand they buy. The same goes for gourmet groceries and electronic products. The challenge for companies offering this type of product is to keep offering better versions of the same product so that customers buy it repeatedly. The company must also ensure that the products are at the forefront of the latest trends and technologies.
4. Unsought Products
Many products that people generally don’t seem to need fall into this category. Whether buyers haven’t felt the need to buy them or aren’t aware of their existence. Thanks to good marketing, many of these have become commonly purchased items. Some of the products that fall into this category are home alarms, batteries, and reference books. The microwave oven is a product in this category and is purchased regularly. Marketers have been able to present these products as a necessity to consumers. Aggressive marketing is necessary for these items.
From consumer products, we now shift our focus to those that belong to the category of industrial goods.
5. Raw Materials
Many items like minerals, wood, and livestock fall into this category. As the name suggests, these are not final products but are used in the manufacturing of finished goods. A product in this classification loses its unique characteristics when transformed into the final product. The producer sells these products to another industry that uses them to manufacture goods for consumers. Most of the marketing for such products remains hidden from public view. The average person doesn’t even see most of these products.
These products are also sold by the manufacturer to another company that uses them to manufacture finished products. However, these items are not transformed into something different. They remain the same but cannot provide any benefit on their own to the consumer. They remain invisible to the person buying the finished products. Rarely do companies that manufacture chips and microprocessors advertise their products. Their brand names are also mentioned in the final product. Most of the time, components are sold based on price and service, not by brand names.
7. Capital Goods
These are products used in production processes. Heavy machinery, buildings, tools, and office equipment fall into this category. A product in this classification is generally purchased only once by the user. That means the manufacturer must find many customers to achieve their financial goals. This is where intermediaries come into play. These companies also help the manufacturer provide installation and service for the products.
8. Major Equipment
These are the manufacturing equipment that companies use to make other products. Machinery, vehicles, computers, etc., are examples of these goods. Even devices that assist in the processing or sale of products fall into this category.
9. Accessory Equipment
These include tools that help maintain manufacturing machinery. They differ from major equipment because they don’t directly assist in manufacturing or processing an item. These products generally have a shorter lifespan.
10. Operating Supplies
A product in this category aids the company with its day-to-day operations. Office supplies and spare parts fall into this classification. A company purchases these items frequently as they have a short lifespan.
Surely, one can learn more about the various types of products and their examples in the Advanced Executive Certificate Course in Product Management. Visit our website for more information about this program and how it can help you become an efficient product manager.
Juan Esteban Yepes