Definition of a Product
In marketing, a product is an object or a system that is made available for consumer use through the process of marketing. Product widely means literally anything that can be offered in a market keeping its demand in close connection. This ‘Product’ has various other names, like in the retailing sector product is known as ‘merchandise’, while in manufacturing industries the same thing is known as ‘raw materials’ and further sold as a ‘finished good’. A product is an item that is offered for sale, this product can be a good or even a service.
Note: The product is made at a cost and each of this is sold at a distinct price manipulated by the demand and supply forces. In this section we will detail our view in this topic of ‘Product’.
Advantages and Examples of Product
There are various advantages of classifying the products. The example can be sited as - travelling in a car which is owned by the traveller, in a hired car, and by train, bus or plane this was clear from the journey which could be made by using a purchased physical objects like the car, petrol and so on, or only by purchasing the service offered by the car from the hire company or one of the organisations that provide alternative modes of transport.
This interesting example since although the use of a hire car or other transport provider involves this purchasing a service which is used for the traveller’s own car and this involves purchasing the additional essential physical objects with at least two mandatory service products.
Types of Product
In the market there are general categories of various products.
The types of products which can be studied under the following heads are:
Consumer Product which is subdivided into Convenience Goods and Speciality Goods.
Industrial Product subdivided into Capital, Plant, Equipment, Accessories, Materials and Components.
Services divided into Pure Service and Major Service
The three main categories which are the Consumer Products, Industrial Products and Services are vivid and distinctive in the product market.
1. Consumer Products Examples
Consumer products are those products which are classified as the way they meet the necessity of purchasing. They are purchased with the basis of the characteristics of the products. The three main types of consumer product are - consumables, durables and services.
Consumables are those products which are being used up in the process of satisfying the need for the need they are purchased.
Example of a consumer product is the can of coca-cola drink which helps in quenching the thirst of the consumer who buys the product himself.
Consumable consumer products can again be further divided into:
Convenience goods
Speciality goods.
2. Industrial Product Examples
Industrial products are those business products which are bought by organisations who manufactures or supplies the products or provides the services. Industrial Products are not bought for their own personal consumption, but to contribute an organisational objective. Industrial Products are destined to further processing further.
In economist language they are known as intermediate products or as inputs which is meant as the demand for this kind of product will further depend upon the final market that is being served by the organisation. This relationship is termed as the ‘derived demand’. For this reason, the industrial products in the markets are subject to higher fluctuations in demand and periodic cycles of activity than is usual for a consumer product.
The product depends upon the relationship between the product and the purchasing organisation. Depending upon the user, a computer also may be classified either as a capital equipment item under industrial goods.
FAQs on Products: Types and Characteristics
1. What is a product in the context of business studies?
In business, a product is defined as a bundle of utilities, tangible or intangible, that a marketer offers to a market to satisfy a want or need. It encompasses not just the physical item but also the associated benefits, such as the brand name, packaging, warranty, and after-sale services that a consumer receives.
2. What are the two major classifications of products?
Based on the end-user, products are broadly classified into two main categories:
- Consumer Products: These are goods and services purchased by final consumers for personal or household consumption.
- Industrial Products: These are goods and services purchased by businesses and organisations for further processing or for use in conducting their operations.
3. What are consumer products? Explain with common examples.
Consumer products are final goods bought directly by individuals or households for personal use, not for resale or business purposes. Their purchase is motivated by personal wants and needs. Common examples include food items like bread and milk, personal care products like soap and shampoo, clothing, and consumer electronics like smartphones and televisions.
4. What are the four main types of consumer products based on shopping habits?
Consumer products are classified into four types based on consumer shopping behaviour:
- Convenience Products: Purchased frequently and immediately with minimal comparison and effort (e.g., newspapers, soft drinks, toothpaste).
- Shopping Products: Less frequently purchased, where consumers spend time comparing on suitability, quality, price, and style (e.g., furniture, clothing, used cars).
- Specialty Products: Have unique characteristics or strong brand identification for which a significant group of buyers is willing to make a special purchase effort (e.g., luxury watches, designer clothes, specific high-end cameras).
- Unsought Products: Products the consumer either does not know about or does not normally think of buying (e.g., life insurance, encyclopedias, blood donations).
5. What is the main difference between a shopping product and a specialty product?
The key difference lies in the consumer's buying process. For shopping products, a consumer actively compares alternatives, investing time and effort to evaluate features, price, and quality. For specialty products, the consumer has already decided on a specific brand or item and is willing to go to great lengths to acquire it, with little to no comparison shopping involved.
6. What defines an industrial product? Give an example.
An industrial product is defined by its purpose of use. It is a good purchased by firms and organisations not for personal consumption but for use in their operations or to produce other goods. For example, the wood purchased by a furniture manufacturer is an industrial product, whereas the finished table bought by a family is a consumer product.
7. How are industrial products classified? Provide examples for each type.
Industrial products are typically classified into three groups:
- Materials and Parts: Goods that enter the manufacturer's product completely. This includes raw materials (e.g., wheat, crude oil) and manufactured components (e.g., tires for a car, microchips for a computer).
- Capital Items: Long-lasting goods that facilitate the production or operations. This includes installations (e.g., factories, offices) and equipment (e.g., tools, computers, machinery).
- Supplies and Business Services: Short-term goods and services that aid in operations but do not become part of the finished product. Examples include operating supplies (e.g., lubricants, paper) and maintenance services (e.g., computer repair, security services).
8. How does a product's classification as 'consumer' versus 'industrial' affect its marketing strategy?
The classification dramatically impacts the marketing mix. Consumer products often rely on mass media advertising, extensive retail distribution, and emotional appeals in branding. In contrast, industrial products typically require a technical, direct sales approach, specialised distribution channels, and a focus on features, performance, and price, as purchase decisions are rational and based on business needs.
9. Why is it important for a business to correctly classify its products?
Correctly classifying a product is crucial because it dictates the entire marketing strategy. For example, marketing a shopping good like a convenience good (with low prices and wide distribution) would fail because customers expect to compare options and may need sales assistance. Classification guides strategic decisions on pricing, distribution channels, promotional activities, and sales force type, ensuring resources are used effectively to meet customer expectations.
10. What are the three levels of a product that marketers analyse to understand its full value?
Marketers analyse a product on three distinct levels to create a comprehensive value proposition:
- Core Customer Value: The fundamental benefit or problem-solving service the customer is really buying (e.g., for a hotel, it is 'rest and sleep').
- Actual Product: The physical product and its features, design, brand name, and packaging that deliver the core benefit.
- Augmented Product: The additional services and benefits built around the core and actual product, such as warranty, after-sale service, installation, and delivery, which can be a key differentiator.
