Although it may seem obvious, there is much more to products than meets the eye. In this article, we’ll explore the following questions:
- What is the Definition of a Product?
- What are the Key Product Types?
- What are Product Characteristics?
Let’s dive in!
Defining a Product
A product is anything designed to meet a customer’s need or desire. This broad definition encompasses physical goods, services, experiences, ideas, and more. It’s helpful to think of a product as a bundle of benefits that provide value to the customer.
A business is built on its products.
Examples of products are household items, clothes, cars, personal items like perfumes, electronics, but also intangible things such as ideas or services. Anyone can create or develop a product, but how well it was designed and produced makes it stand out. Amazon’s founder, Jeff Bezos, once said, “Your goal should be to create value for everyone you interact with.”
In this sense, you can also think of a product as a bundle of benefits designed to deliver value to the customer. Successful products are the result of careful product management, which involves planning, development, and marketing.
There are many valid definitions of products. Here are the well-known ones:
- English Dictionary: “Something made to be sold” or “a tangible or intangible good or service resulting from a process intended for delivery to a customer.”
- Philip Kotler (Marketing): “Anything offered to a market for attention, acquisition, use, or consumption… physical objects, services, personalities, places, organizations, and ideas.”
- The Economic Times: “The item offered for sale… can be a service or an item, physical, virtual, or cyber.”
Key Takeaway: While definitions vary, a product is essentially any offering intended to meet a market need. Let’s explore product types in more detail…
Different Ways to Categorize Products
There are many different ways to distinguish types of products.
Consumer vs. Industrial
One of the most commonly used ways to distinguish types of products is consumer products versus industrial products. Each of these types has its own subcategories.
| Consumer Products | Industrial Products |
| Convenience Products | Capital Items |
| Shopping Products | Materials and Parts |
| Specialty Products | Business Services and Supplies |
| Unsought Products |
Consumer Products
As the name suggests, they are made for or sold to consumers. They include convenience products, shopping products, specialty products, and unsought products. They satisfy the needs and wants of consumers. We will briefly explain and give some examples of the different types of consumer products.
- Convenience Products are necessary products that consumers regularly buy. You can find them at almost every location. Convenience products are distributed widely, they have low prices, and they often require lots of promotion. Examples of convenience products are books, sugar, pens, pencils, salt, matches, and detergents.
- Shopping Products are the ones that consumers need but do not often buy. Shopping products are distributed in fewer locations, and they are usually compared based on quality, size, features, etc. Consumers often take their time to compare other options before purchasing them. These products typically require personal selling and promotion/ marketing. Examples of shopping products are furniture, phones, and clothing.
- Specialty Products are products with unique features or characteristics. They are typically expensive, distributed in selected areas, unlike convenience products, and target a particular set of consumers. Examples of specialty products include designer clothing, sports cars, and other expensive products.
- Unsought Products are those that consumers do not normally buy. They purchase them only when required. They are personal selling products and require serious promotion/ marketing. Examples of unsought products are life insurance and funeral services.
Learn more about the four types of consumer products and marketing considerations for each type.
Industrial Products
Industrial products are goods purchased by organizations to either aid in operations or provide services. While consumer products are bought for personal use, industrial ones are purchased for the organization’s benefit (at least at first). Let’s take a closer look at the different types of them.
Industrial products include materials and parts, capital items, supplies, and business services.
- Capital Items are goods that facilitate the production process, but do not become part of the actual final product. Examples of capital items are plants or factories, fixed equipment like major machines and accessory equipment like printers.
- Materials and Parts are the goods that become part of the final product through the production process. These include raw materials like wood as well as components and parts like gears.
- Business Services and Supplies include both operating supplies, which are items that primarily serve to maintain a business’ functionality (think of e.g. printer ink), as well as intangible goods like advisory or maintenance. Both business services and supplies help keep the business running.
Tangible versus Intangible Products
Products can further be classified into tangible and intangible goods.
Tangible
The word” tangible” means anything that you can touch or feel. Examples of tangible products are cars, pens, books, gadgets, and tools.
Intangible
“Intangible” is the direct opposite of tangible. Therefore, if tangible goods can be felt or touched, intangible goods cannot be felt or touched – rather, they can be seen indirectly. Think of intangible products as services, which may still have tangible parts in them. An example of an intangible product is an insurance policy.
Characteristics of Products
Products have unique attributes that distinguish them and guide marketing efforts. Only when combining the characteristics of products with the needs and wants of a specific consumer or a business, you can say whether it is a good or a bad product. A good product for one person may be a bad one for another person.
Here’s a breakdown:
- Tangible vs. Intangible: Physical goods vs. services
- Form: Shape, size, features, etc.
- Purpose: Consumer needs vs. industrial use
- Value Proposition: The benefits offered to the customer
- Role in Marketing: Products are central to the marketing mix
- There are three levels of product – core value, actual product, and augmented product
How a Product Differs from a Service
In the most common understanding, a product is tangible. However, what we actually mean by this should rather be labeled as goods. Products and goods are used as synonyms in common parlance. This is however not fully correct. While a good is something tangible, a product can also be a service. This depends of course also on the types of products.
Staying with the common parlance for a moment, however, and thinking of products as something tangible, we can say that they come in different shapes, sizes, quantities, qualities, etc. A product is specifically produced to satisfy the needs and wants of consumers or industrial requirements, and it can typically easily be returned if the customer is not satisfied with it.
Products in this sense are
- Tangible
- Designed to satisfy consumer needs and wants or industrial requirements
- Quantifiable
- Perishable
- Returnable
According to Philip Kotler, “A service is an activity or benefit that one party can offer to another that is essentially intangible and does not result in the ownership of anything”. The main characteristic of a service is that it is intangible – however, a service may have tangible elements. Unlike products, you cannot return services.
Considering the characteristics of services, services are
- Intangible
- Inseparable
- Perishable
Key Takeaway: Products and services both satisfy needs but require different marketing due to their unique characteristics.
Closing words
By grasping the nature of products, their types, and their characteristics, you gain the foundation for strong marketing strategies. Always analyze how your product aligns with the needs of your target audience to maximize its impact.
Knowing product types and characteristics allows you to craft winning marketing strategies.
