Product

A product may be defined as a set of tangible, intangible and associate attributes capable of being exchanged for a value with the ability to satisfy consumers and business needs.  It is anything that can be offered to a market to satisfy the needs or wants of the customer. The products that are marketed include physical goods, services, experiences, events, person, place, properties, organization, information and ideas.

Many authors define the term ‘product’ in the following manner:

• Philip Kotler: “A product is anything that can be offered to a market for attention, acquisition, use or consumption. It includes physical objects, services, personalities, place, organizations and ideas.”
• Alderson: “A product is a bundle of utilities consisting of various features and accompanying services.”
• Schwartz: “A product is something a firm markets that will satisfy a personal want or fill a business or commercial need and includes all the peripheral factors that may contribute to consumer’s satisfaction.”
• William J. Stanton: “A product is a set of tangible and intangible attributes, including packaging, colour, price, manufacturers and retailers prestige and services, which the buyer may accept as offering satisfaction of wants and needs.”
• Rustam S. Davar: “A product may be regarded from the marketing view point as a bundle of benefits which are being offered to consumers.

Thus, we can say a product is both what a seller has to sell and what buyer has to buy. Buyer will buy a product which can offer him expected satisfaction.

Levels or Dimensions of Product

A product has many dimensions beside its physical appearance. In fact, a product is like an ‘onion’ with several layers and each layer contributes to the total product image.

According to Philip Kotler, “The consumers will favour those products that offer most quality, performance and features.”.  Philip Kotler has described the five levels of products.

Customers will choose a product based on their perceived value of it. Satisfaction is the degree to which the actual use of a product matches the perceived value at the time of the purchase. A customer is satisfied only if the actual value is the same or exceeds the perceived value. Kotler attributed five levels to products:

The five product levels are

1. Core benefit

The fundamental need or want that consumers satisfy by consuming the product or service. For example, the need to process digital images. This is the basic level that represents the heart of the product. Here, the focus is on the purpose for which the product is intended. It answers the question ‘What is the buyer really buying? For instance, a woman doesn’t purchase a washing machine merely because of its machinery but for her comfort and praise from her family. Likewise, we buy a warm coat to protect us from the cold and the rain. Thus, the basic job of marketing manager is to sell the core benefits of the product.

2. Generic product (Generic Product or Tangible Product)

The second level of the product, the tangible product (also called the actual, physical or formal product) is the physical product or service offered to consumers. A version of the product containing only those attributes or characteristics absolutely necessary for it to function.

For example, the need to process digital images could be satisfied by a generic, low-end, personal computer using free image processing software or a processing laboratory.

3. Expected product

The set of attributes or characteristics that buyers normally expect and agree to when they purchase a product. For example, the computer is specified to deliver fast image processing and has a high-resolution, accurate colour screen.

4. Augmented product

The inclusion of additional features, benefits, attributes or related services that serve to differentiate the product from its competitors. For example, the computer comes pre-loaded with a high-end image processing software for no extra cost or at a deeply discounted, incremental cost.

5. Potential product

This includes all the augmentations and transformations a product might undergo in the future. To ensure future customer loyalty, a business must aim to surprise and delight customers in the future by continuing to augment products. For example, the customer receives ongoing image processing software upgrades with new and useful features.

Benefits

Kotler’s Five Product Level model provides businesses with a proven method for structuring their product portfolio to target various customer segments. This enables them to analyse product and customer profitability (sales and costs) in a structured way. By organising products according to this model, a business’ sales processes can be aligned to its customer needs and help focus other operational processes around its customers – such as design and engineering, procurement, production planning, costing and pricing, logistics, and sales and marketing.Grouping products into product families that align with customer segments helps modelling and planning sales, as well as production and new product planning.

Characteristics of Product:

Careful analysis of concept of product essentially reveals following features:

1. Product is one of the elements of marketing mix or programme.
2. Different people perceive it differently. Management, society, and consumers have different expectations.
3. Product includes both good and service.
4. Marketer can actualize its goals by producing, selling, improving, and modifying the product.
5. Product is a base for entire marketing programme.
6. In marketing terminology, product means a complete product that can be sold to consumers. That means branding, labeling, colour, services, etc., constitute the product.
7. Product includes total offers, including main qualities, features, and services.
8. It includes tangible and non-tangible features or benefits.
9. It is a vehicle or medium to offer benefits and satisfaction to consumers.
10. Important lies in services rendered by the product, and not ownership of product. People buy services, and not the physical object.

Types of Product:

A company sells different products (goods and services) to its target market.

They can be classified into two groups, such as:

1. Consumer Products

Consumer products are those items which are used by ultimate consumers or households and they can be used without further commercial and engineering processes.

Consumer products can be divided into four types as under:

• Convenient Products: Such products improve or enhance users’ convenience. They are used in a day-to-day life. They are frequently required and can be easily purchased. For example, soaps, biscuits, toothpaste, razors and shaving creams, newspapers, etc. They are purchased spontaneously, without much consideration, from nearby shops or retail malls.
• Shopping Products: These products require special time and shopping efforts. They are purchased purposefully from special shops or markets. Quality, price, brand, fashion, style, getup, colour, etc., are important criteria to be considered. They are to be chosen among various alternatives or varieties. Gold and jewelleries, footwear, clothes, and other durables (including refrigerator, television, wrist washes, etc.).
• Durable Products: Durable products can last for a longer period and can be repeatedly used by one or more persons. Television, computer, refrigerator, fans, electric irons, vehicles, etc., are examples of durable products. Brand, company image, price, qualities (including safety, ease, economy, convenience, durability, etc.), features (including size, colour, shape, weight, etc.), and after-sales services (including free installation, home delivery, repairing, guarantee and warrantee, etc.) are important aspects the customers consider while buying these products.
• Non-durable Products: As against durable products, the non-durable products have short life. They must be consumed within short time after they are manufactured. Fruits, vegetables, flowers, cheese, milk, and other provisions are non-durable in nature. They are used for once. They are also known as consumables. Mostly, many of them are non-branded. They are frequently purchased products and can be easily bought from nearby outlets. Freshness, packing, purity, and price are important criteria to purchase these products.
• Services: Services are different than tangible objects. Intangibility, variability, inseparability, perishability, etc., are main features of services. Services make our life safe and comfortable. Trust, reliability, costs, regularity, and timing are important issues.

The police, the post office, the hospital, the banks and insurance companies, the cinema, the utility services by local body, the transportation facilities, and other helpers (like barber, cobbler, doctor, mechanic, etc.,) can be included in services. All marketing fundamental are equally applicable to services. ‘Marketing of services’ is the emerging facet of modern marketing.

2. Industrial Products

Industrial products are used as the inputs by manufacturing firms for further processes on the products, or manufacturing other products. Some products are both industrial as well as consumer products. Machinery, components, certain chemicals, supplies and services, etc., are some industrial products.

Again, strict classification in term of industrial consumer and consumer products is also not possible, For example, electricity, petroleum products, sugar, cloth, wheat, computer, vehicles, etc., are used by industry as the inputs while the same products are used by consumers for their daily use as well.

Some companies, for example, electricity, cements, petrol and coals, etc., sell their products to industrial units as well as to consumers. As against consumer products, the marketing of industrial products differs in many ways.

Industrial products include:

• Machines and components
• Raw-materials and supplies
• Services and consultancies
• Electricity and Fuels, etc.

Dimensions of a Product

According to Philip Kotler, the total product has three layers or dimensions.

These three dimensions need to be distinguished from each other:

1. Core Product

The core product covers the physical attributes—tangible and intangible—offered for sale. These attributes consist of the materials, quality, weight, design or shape, size, colour, style, smell, package, brand name, label, etc. Services like auto repair, bus travelling, electricity supply, management consultancy, legal advice, etc., are products with intangible features.

2. Augmented Product

It is a broader conception including the various benefits and services that accompany the core product. It is the totality of benefits that a person receives in buying a product. For instance, along-with the T.V. set, a customer gets the dealer’s reputation, warranty, home delivery, free installation and maintenance, instructions for use, etc. This is an important dimension because in a competitive market, it provides a plus point to the seller. Neglect of this dimension may result in the failure of the product or loss of sales opportunities.

3. Symbolic Product

It is product as the customer perceives it. It is the psychological feeling or expectations of the customer about the product which influence his decision to buy. To the consumer a product is actually a symbol or a meaning.

For instance, a customer buys a T.V. set not as a box of components but as an instrument of entertainment, pleasure and status. Similarly, a woman buys hope and beauty by purchasing a lipstick. Consumer’s perception of a product is critical to its success or failure.