Product (business)
In marketing, a product is anything that can be offered to a market that might satisfy a want or need. However it is much more than just a physical object. It is the complete bundle of benefits or satisfactions that buyers perceive they will obtain if they purchase the product. It is the sum of all physical, psychological, symbolic, and service attributes.
A product is similar to a good. In accounting, goods are physical objects that are available in the marketplace. This differentiates them from a service, which is a non-material product.
Three Aspects
There are three aspects to any product or service:
- 1 Core Benefits
- in-use benefits
- psychological benefits (e.g., self-image enhancement, hope, status, self worth)
- problem reduction benefits(e.g., safety, convenience)
- 2 Tangible Product or Service
- product attributes and features
- quality
- styling
- packaging protection and label information
- brand name
- 3 Augmented Product or Service
- warranty
- installation
- delivery
- credit availability
- after-sale service and maintenance
Classifying Products
Product management involves developing strategies and tactics that will increase product demand (referred to as primary demand) over the product's life cycle.
One useful technique in understanding a product is the Aspinwall Classification System. It classifies and rates products based on five variables:
- 1) replacement rate - how frequently is the product repurchased
- 2) gross margin - how much profit is obtained from each product (average selling price less average unit cost)
- 3) buyer goal adjustment - how flexible are the buyers' purchasing habits in regards to this product
- 4) duration of product satisfaction - how long will the product produce benefits for the user
- 5) duration of buyer search search behaviour - how long will they shop for the product
Types of Products
There are several types of products:
- consumer products - used by end users
- industrial products - used in the production of other goods
- convenience goods - purchased frequently and with minimal effort
- impulse goods - purchase stimulated by immediate sensory cues
- emergency goods - goods required immediately
- shopping goods - some comparison with other goods
- specialty goods - extensive comparisons with other goods and a lengthy information search
- unsought goods - e.g., cemetery plots, insurance
- perishable goods - goods that will deteriate quickly even without use
- durable goods - goods that survive multiple use occasions
- non-durable goods - goods that are used up in one use occasion
- capital goods - installations, equipment, and buildings
- parts and materials - goods that go into a finished product
- supplies and services - goods that facilitate production
- commodities - undifferentiated goods (e.g., wheat, gold, sugar)
- by-products - a product that results from the manufacture of another product
See Also
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