Although it may seem obvious, there is much more to products than you may be aware of. What is a product, and which product types are out there? Is there a clear definition of products or is it more complex than you would think? In this article, we explore these questions in more detail. Let’s review various ways to define products, different product types, key characteristics of products and the special role of services.
How to think about a product
A product can take many different forms. So, if you search for a simple answer to the question ‘What is a product?’ we may have to disappoint you. A product can be defined as anything that can be offered to a market to satisfy the needs or wants of the customer. Products can be physical goods, services, experiences, events, persons, places, organizations, information, and ideas. But this is just one side to the definition of a product. Join us as we explain further what a product is and how the different types of products can be distinguished.
One cannot have a business without having any kind of product – you may say that products even define a business. But what is a product? 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 a product stand out. Amazon’s founder, Jeff Bezos, once said, “Your goal should be to create value for everyone you interact with.” This can be applied to designing products. The goal of every business should be to create products with value for consumers. In this sense, you can also think of a product as a bundle of benefits that deliver value to the customer.
Different Definitions of Products
Let’s get to it: What are products actually? There is quite a number of different definitions of products from various authors and different study branches. All these definitions answer our question in their very own way. In the following, we take a look at a selection of some well-known definitions of products.
The English Dictionary Definition of Products
The English Dictionary defines the word “product” as…
- Something that is made to be sold – in other words a commodity offered for sale
- Anything that is produced (often by an industrial process)
- The result of something (also in a mathematical sense)
- Any tangible or intangible good or service resulting from a process that is intended for delivery to a customer or end-user
The Marketing Definition of Products
One of the most common and popular definitions of products, at least from a marketing standpoint, is the one from Philip Kotler. What are products in Kotler’s view? He defined a product as “anything that can be offered to a market for attention, acquisition, use or consumption. It includes physical objects, services, personalities, place, organizations and ideas.”
The Economic Definition of Products
According to The Economic Times, “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 cyber form.”
Considering those differing definitions, what are products after all? The definition by The Economic Times sums up many of the different definitions of a product as “the item offered for sale”. Apart from this common ground, a product can come in many different forms as long as it is being offered for use. This brings us to our next part where we go deeper on the different types of products.
Types of Products
As with the definition of products, there are many different ways to distinguish types of products.
Consumer Products vs. Industrial Products
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 are, as the name suggests, products made for or sold to consumers. They include convenience products, shopping products, specialty products and unsought products. These products are produced or created to satisfy the needs and wants of consumers. What are products when considering consumer products only? We will briefly explain and give some examples of the different types of consumer products.
- Convenience Products are necessary products regularly bought by consumers, and they can be found 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 products that are needed but are not often bought by consumers. 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 shopping products. 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 products that consumers do not normally buy. They are only purchased when they are needed. 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 are goods purchased by organizations to either aid in operations or provide services. While consumer products are bought for personal use, industrial products are purchased for the organization’s benefit (at least at first). But what is a product if you consider industrial products? Let’s take a closer look at the different types of industrial products.
Industrial products include materials and parts, capital items, supplies and business services.
- Capital Items are goods that facilitate the production process, however 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.
The word” tangible” means anything that can be touched or felt. Applying this definition to a product, we can say a tangible product is a physical product that can be touched or felt. Examples of tangible products are cars, pens, books, gadgets, and tools.
“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. Intangible products can be thought of as services, which may still have tangible parts in them. An example of an intangible product is an insurance policy.
Characteristics of Products
After having discussed what products are and how to distinguish different types of products, let’s think about characteristics of products.
Product characteristics are the attributes of a product. They can help distinguish a product from another or help to identify a good versus a bad product. Each product comes with its own characteristics and features. 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 product or a bad product. A good product for one person may a bad one for another person.
Regardless of a good or a bad product, you can always distinguish products by their characteristics. In addition, product characteristics play a very important role in marketing. It is typically much easier to market a product when product characteristics are communicated clearly. Product characteristics include the following points:
- A product is any good or service that can be sold
- A product can be thought of as a bundle of benefits – making it a vehicle to offer satisfaction to consumers
- There are three levels of product – core value, actual product and augmented product
- A product is either tangible or intangible
- A product can come in different forms
- Products include goods and services
- Tangible products come in different sizes, colors, shapes, patterns, etc.
- Products are a key element in the marketing mix and marketing strategy
There are many more aspects that could be included in this list of product characteristics. It all depends on the type of product. What we can say about all of them if that a product can be remodeled or improved by a marketer to drive sales.
How a Product Differs from a Service
In the most common understanding, a product is tangible, meaning it can be touched or felt. However, what we actually mean with this should rather be labelled as goods. Products and goods are used as synonyms in common parlance. This is however not fully correct. While a good is something that is 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 a product comes 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
- Designed to satisfy consumer needs and wants or industrial requirements
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, services cannot be returned.
Considering the characteristics of services, services are
What a product and a service have in common is that both are intended to satisfy needs and produce satisfaction. However, due to the differences between products and services, they require different marketing strategies.
Marketing is based on a product and cannot be achieved if there is no product. Therefore, knowing an answer to the question ‘What is a product?’ is a key requirement when developing an effective marketing strategy. In addition, you should be aware of the many different types of products as well as characteristics of products to ensure that your marketing strategy is tailored to the specific needs of the situation.