Product – Meaning of Product

A product is something that is manufactured for sale in the market.

Customer needs are met by the usage of products. Product is one of
the main components of marketing—all marketing activities revolve
around the product. Products can be tangible or intangible.
Tangible products are known as goods while intangible products are
called services.

The term product can be understood in narrow as well as broad

sense. In a narrow sense, it is a set of tangible physical and chemical
attributes assembled in an identifiable and readily recognizable
form.

In a broader sense, it recognizes each separate brand as a separate

product. A product can be defined as- “A good, idea, method,
information, object, or service that is the end result of a process and
serves as a need or want satisfier. It is usually a bundle of tangible
and intangible attributes (benefits, features, functions, uses) that a
seller offers to a buyer for purchase.”

Ordinarily speaking, product or goods is a word which means any

commodity which can be recognised by its certain shape, quality or
quantity e.g., car, book, watch, clothes etc. Actually this meaning of
the product is narrow in sense. The word ‘Product’ is taken in wider
perspective in marketing. Here, every brand is considered a
separate product i.e., Lux and Lifebuoy—both are soaps, but are
treated as separate products. In narrow sense, these will be
considered as merely soaps.

Every business firm undertakes the function of product selling,

though it may or may not be visible. A laundry firm provides the
clothes-washing service. This function is similar to product selling
which a retailer performs. Firms while selling their products, sell
services too which are related to their products. A consumer buys a
product because he gets psychological and physical satisfaction
from that product.

Thus a seller not only sells his products rather he enters into
marketing of such psychological and physical satisfaction. For
example, a person while purchasing a product does not bother
about the inputs by which that product is manufactured. He is
rather interested in the fact as to what utility or satisfaction, he will
gain by using that product. In this context, the ideas of George Fisk
are worth describing. According to him, “Product is a cluster of
psychological satisfaction.”

Product – Definition in Marketing

A product is what a seller has to sell and what a buyer has to buy it
satisfies the needs of customers. Customers purchase products
because they are capable of realizing some benefits to the
purchaser. A marketer can satisfy the needs and wants of his
customers by ‘offering something’ in exchange for money. And this
‘offering’ is basically a product. The product is one of the important
elements of the 4Ps of the marketing mix. It consists of a bundle of
tangible and intangible attributes that satisfies consumers.

Product is an important component in marketing-mix. Other

elements of marketing-mix i.e. price, promotion and place are
complementary to it. A product is central to the marketing
operations in an organization. Most of the time product fails not
because of poor quality but because they fail to meet the
expectations of the customers.

It is not just a bundle of physical attributes, but a bundle of

perceived benefits which satisfy consumer’s needs. Hence, utmost
care should be taken to handle product decisions. A bad product not
only generates bad name for the firm but also affects negatively the
price set for the product, dissuades the channel members and
reduces the believability of the promotional measures.

In a narrow sense, “A product is a set of tangible physical attributes

in an identifiable form” (W.J. Stanton). But in marketing, product is
used in a broader form.

According to W. Alderson “A product is a bundle of utilities

consisting of various product features and accompanying services”.

According to Philip Kotler “A product is anything tangible or

intangible that can be offered to a market for attention, acquisition
use or consumption that might satisfy a need or want”.

According to Cravens, Hills and Woodruff “Product is anything that

is potentially valued by a target market for the benefits or
satisfactions it provides, including objects, services, organizations,
places people and ideas”.

From the above definitions, it is clear that product has the want
satisfying attributes which drive a customer to purchase the
product. It is nothing but a package of problem solving devices and
is something more than a physical product. This is because a
product encompasses a number of social and psychological
attributes and other intangible factors which provide satisfaction to
the consumer.

Products can be anything. It can be physical product (e.g. fan, cycle

etc.), service (e.g. haircuts, property deals etc.), place (e.g. Agra,
Delhi etc.), person (e.g. Late M.F. Hussain etc.), Organization (e.g.
Helpage India, Rajiv Gandhi foundation etc.) and idea (e.g. Family
Planning, safe driving etc.).

Alderson defines, “A product is a bundle of utilities consisting of

various product features and accompanying services”.

Stanton defines, “A product is a set of tangible and intangible

attributes, including packaging, colour, price, manufacturer’s and
retailer’s services, which the buyer may accept as offering
satisfaction or wants or needs”.

According to Philip Kotler, “A product is anything that can be

offered to a market for attention, acquisition, use or consumption
that might satisfy a want or need. It includes physical objects,
services, persons, places, organization and ideas”.

Product – Concept
Product refers to a good or service that satisfies the needs and
wants of customers. It is offered in the market by an organization to
earn revenue by meeting the requirements of customers. Product is
an asset of an organization and referred as the backbone of
marketing mix.

According to Peter Drucker, “Suppliers and especially

manufacturers have market power because they have information
about a product or a service that the customer does not and cannot
have, and does not need if he can trust the brand. This explains the
profitability of brands.”

It is very important for an organization to understand the needs of

customers. For example, some customers use mobile phones for
talking; whereas, some use mobile phones for talking as well as
business purposes, such as teleconferencing. Needs of the
customers depend on their purchasing power.

For example, a customer whose basic need is surfing over the

Internet may opt for a simple computer; whereas, a software
engineer may need a high configuration computer. Therefore, when
the level of need increases then the level of product also increases.

Product – Features of a Product

i. Tangibility:
Products are tangible in nature, customers can touch, seen or feel a
products. For example, car, book, computer etc.

ii. Intangible Attributes:

ADVERTISEMENTS:

Service products are intangible in nature, services like, consultancy,

banking, insurance etc. The product may be combination of both
tangible and intangible attributes like restaurants, transportation,
in case of a computer it is a tangible product, but when we will talk
of its free service provided by dealer, then the product is not only a
tangible item but also an intangible one.

iii. Associated Attributes:

The attributes associated with product may be, brand, packaging,
warranty, guarantee, after sales services etc.

iv. Exchange Value:

Irrespective of the fact that whether the product is tangible or
intangible, it should be capable of being exchanged between buyer
and seller for a mutually agreed price.

v. Customer Satisfaction:
A product satisfies the customer needs and wants of customers,
value of products is also determined by the level of satisfaction
given by a product after purchase.
GOODS AND SERVICES
 Goods and services are the outputs offered by businesses to satisfy the
demands of consumer and industrial markets. They are differentiated
on the basis of four characteristics:

1. Tangibility: Goods are tangible products such as cars, clothing, and

machinery. They have shape and can be seen and touched. Services
are intangible. Hair styling, pest control, and equipment repair, for
example, do not have a physical presence.
2. Perishability: All goods have some degree of durability beyond the
time of purchase. Services do not; they perish as they are delivered.
3. Separability: Goods can be stored for later use. Thus, production and
consumption are typically separate. Because the production and
consumption of services are simultaneous, services and the service
provider cannot be separated.
4. Standardization: The quality of goods can be controlled through
standardization and grading in the production process. The quality of
services, however, is different each time they are delivered.

For the purpose of developing marketing strategies, particularly

product planning and promotion, goods and services are categorized in
two ways. One is to designate their position on a goods and services
continuum. The second is to place them into a classification system.
The goods and services continuum enables marketers to see the
relative goods/services composition of total products. A product's
position on the continuum, in turn, enables marketers to spot
opportunities. At the pure goods end of the continuum, goods that
have no related services are positioned. At the pure services end are
services that are not associated with physical products. Products that
are a combination of goods and services fall between the two ends.
For example, goods such as furnaces, which require accompanying
services such as delivery and installation, are situated toward the pure
goods end. Products that involve the sale of both goods and services,
such as auto repair, are near the center. And products that are
primarily services but rely on physical equipment, such as taxis, are
located toward the pure services end.

The second approach to categorizing products is to classify them on

the basis of their uses. This organization facilitates the identification
of prospective users and the design of strategies to reach them. The
major distinction in this system is between consumer and industrial
products. Consumer goods and services are those that are purchased
for personal, family, or household use. Industrial goods and services
are products that companies buy to make the products they sell.

Two major changes have affected the marketing and production of

goods and services since about 1950. The first was a shift in marketing
philosophy from the belief that consumers could be convinced to buy
whatever was produced to the marketing concept, in which consumer
expectations became the driving force in determining what was to be
produced and marketed. This change in orientation has resulted in
increases in both lines of products and choices within the lines.

Definition of Consumer Products

To begin, let’s answer a simple question. What specifically is a consumer product?

Consumer products, often referred to as final goods, are products bought by
consumers for personal consumption. In other words, we are talking about products
individuals or households buy to satisfy their personal needs.

We need to distinguish consumer products from other types of products (e.g.,

industrial products). Consumer products primarily refer to products, as the name
implies, but may also include services. This essentially means that wherever you
look, you will find products. The new haircut you got from your barber shop, the
ice cream you are eating, the car you are driving, and the massage you are getting –
those are just a few examples of the broad range of products out there.

Obviously, this broad range of different products needs to be segmented. For that
reason, we distinguish four types of consumer products with different
characteristics and resulting marketing considerations. But not only that, also
consumers differ in their preferences, and there are different shopper types. As a
result, it makes sense to distinguish different types of products.

4 Types of Consumer Products

Obviously, not every consumer product is the same. As you can imagine, it would
be cumbersome to not distinguish between various product types when developing
marketing strategies. From a marketing perspective, there are four different types of
consumer products we need to take into account.

Marketers distinguish these 4 types of consumer products:

 Convenience products
 Shopping products
 Specialty products
 Unsought products.

These 4 types of products all have different characteristics and involve a different
consumer purchasing behavior. Thus, they differ in the way consumers buy them
and, for that reason, in the way they should be marketed.

Let’s now have a closer look at each of these product types and consider
specific marketing strategies applicable to them.
Convenience Products

Among the four types of consumer products, the convenience product is purchased
most frequently. A convenience product is a consumer product or service that
consumers normally buy frequently, immediately and without great comparison or
buying effort.

Examples include products such as bottled water, laundry detergents, fast food,
sugar and magazines. As you can see, convenience products are those types of
consumer products that are usually low-priced and placed in many locations to
make them readily available when consumers need or want them.

These products require some specific marketing strategies. As they usually are quite
generic and easily replaceable, competition is extremely tough. At the same
time, differentiation is rather difficult. How do you make your product stand out in
a million different sugar brands that all more or less have the same characteristics?
How do you get consumer attention, if there is no major comparison effort
involved?

A couple of key marketing strategies should be considered for this type of consumer
product. Firstly, prices should be low – in line or ideally below those of competing
products. Therefore, you would usually want to choose a competitive pricing
strategy. Secondly, promotion should target a large audience – nearly every
household needs sugar.

However, most importantly, distribution must be widespread. You want to have

your product in as many different locations as possible – across different
distribution channels, retailers, and even within shops. For instance, you could want
to sell your sugar in supermarkets, convenience stores, mini-shops and so on. The
goal is to be as close to the consumer and as visible as possible. However, in this it
is crucial to consider that the definition of convenience has changed compared to
the pre-digital era. Convenience once meant providing a product within a
reasonable walk or drive – just close to the consumer, so they can easily pick it up
on the way home from work or at a store nearby.

Today, Millennial and Gen-Z customers have different expectations. With all the
technology and on-demand culture these days, closeness and convenience are
becoming redefined rapidly. These consumers have grown up with the certainty that
media and services are available anytime, anyplace, at the push of a button. We
could call this the Amazon Effect.

What does this mean for distribution strategies? Well, convenience in this digital
landscape actually means that your products should not only be close to consumers,
they should be brought to them. In other words, home delivery becomes more and
more important for convenience products.

And still, with all these marketing strategies in mind, you may have to think more
about the product itself: How could you possibly make it stand out? Maybe your
sugar offers certain health benefits, or it is organic, or fair-trade. Think about what
makes your brand special and show it to gain customer attention.

Have a look at further marketing strategies for convenience products.

Shopping Products

The second type of consumer product is the shopping product. Shopping products
are products that the customer usually compares on attributes such as quality, price
and style in the process of selecting and purchasing. Thus, a difference between the
two types of consumer products presented so far is that the shopping product is
usually less frequently purchased and more carefully compared. Therefore,
consumers spend much more time and effort in gathering information and
comparing alternatives.

Examples of shopping products include furniture, clothing, used cars, airline

services etc. As you can see, such products are a little more involving: they require
more time, thinking and investment than convenience products.

As a result, marketing strategies for shopping products are a bit different. They are
usually distributed through fewer outlets, but with deeper sales support in order to
help customers in the comparison effort. Also, the price is usually much higher than
for convenience products. Think about a used car – clearly this carries a different
price tag than even the most expensive sugar you can find on the shelves. In terms
of promotion, you would typically consider more targeted advertising, both online
(e.g., Instagram ads) and offline (e.g., flyers, billboard ads etc.). In addition,
personal selling becomes a key strategy. Think about that used car again – can you
imagine the used car dealer trying to convince you to buy it?

In contrast to convenience products, differentiation is significantly easier for

shopping products. There are simply more attributes that allow to differentiate.
Also, the purchasing decision-making process is more complex, as consumers now
want to compare product attributes.

Specialty Products

The third type of consumer product is the specialty product. As the name suggests,
these products are kind of special. We are talking about consumer products and
services with unique characteristics or brand identification for which a significant
group of consumers is willing to make a special purchase effort.
As you can imagine, specialty products involve much higher levels of effort in
the purchasing process or marketing funnel. However, while a special purchase
effort is required, these products are only relevant for a much smaller group of
consumers.

Examples of specialty products include expensive cars, professional photographic

equipment, designer clothes etc. A perfect example for specialty products is a
Ferrari. In order to buy one, a certain group of buyers would make a special effort,
for instance by travelling great distances to buy one. However, specialty products
are usually less compared against each other. Rather, the effort must be understood
in terms of other factors. Buyers for instance invest more time to reach dealers that
carry the wanted products. To illustrate this, look at the Ferrari example: the one
who wants one is often already since long convinced that he or she wants a Ferrari –
there is not that much comparison against other brands. But the buyer would likely
travel quite far to get to the nearest Ferrari dealer.

Which marketing strategies are relevant for specialty products? Here we are talking
about products with high prices, for which exclusive distribution in only one or a
few outlets works best. Promotion is more carefully targeted than for other product
types to capture those few consumers actually willing to buy such a special product.

Unsought Products

The last of the 4 types of consumer products is the unsought product. Unsought
products are those consumer products that a consumer either does not know about
or knows about but does not consider buying under normal conditions. Thus,
consumers do not think about these products under normal circumstances, at least
not until they need them.
Most new innovations, freshly out of the new product development process, are
unsought until consumers become aware of them. Other examples of this type of
consumer product are life insurance and pre-planned funeral services etc.

How do you market products that consumers do not really think about? You have to
make them think about them. As a consequence of their nature, unsought products
require much more advertising, selling and marketing efforts than other types of
consumer products. In many cases, aggressive advertising and personal selling is a
requirement. Prices can vary a lot and really depend on the specific product. Ideally,
you apply the pricing strategy that is most suited to the product characteristics. All
your efforts should focus on creating awareness and a perceived need for your
product. Therefore, demonstrating the product, emphasizing its benefits and
offering an attractive price are key to success.
Learn more about marketing strategies for unsought products.

Marketing Considerations for the 4 Types of Consumer Products

After having explained the 4 types of consumer products, let’s now summarize the
relevant marketing considerations for each of them.

Marketing
Convenience Shopping Specialty U
Consideration

Consumer Frequent purchases, Less frequent purchase, Rather rare purchase, Special R
purchasing Little effort, Low Higher effort, Higher effort, Strong brand s
behavior customer involvement customer involvement preference and loyalty, Low p
price sensitivity k

Price Low price Higher price High price V

 Marketing
Convenience Shopping Specialty U
Consideration

Distribution Widespread Selective distribution, Exclusive distribution, V

distribution, Fewer outlets Typically only a few outlets
Convenient locations

Promotion Mass promotion Targeted advertising, Carefully targeted promotion A

Personal selling P

Examples Toothpaste, Laundry Smartphone, Furniture, Luxury goods, Super sports L

detergent, Bottled Clothing cars, Designer clothing f
water

A Different Perspective on Products: The Three Levels of Products

While we can cluster consumer products into four different classes or categories as
described above (convenience products, shopping products, specialty products, and
unsought products), there is another way to think about products. What we mean are
the three levels of products – a logic that applies to every type of product. The three
levels of products define a product along the values and benefits it brings to the
customer. These are manifold – think of the products you can buy in a supermarket,
for instance. While a can of Coke may bring you quench your thirst in the first
place, it does many other things. Firstly, you get a tangible metal can which comes
in flashy red color and may be cool because it was in the fridge. Once you drink it,
it quenches your thirst – but it also brings you taste, pleasure, satisfaction. But
eventually, it may even bring you lifestyle, a feeling of familiarity, and many other
things.
As you can see, even a simple product can be looked at in many different ways. We
could even go as far as saying that a product actually consists of many different
types of sub-products, depending on the way you look at it.

Marketers refer to this as the three levels of products. These comprise of the core
value (which is the actual core benefit you are seeking, such as satisfying your thirst
in the Coke example), the actual product (e.g., the tangible metal can), and
the augmented product (e.g., the lifestyle you get with the Coke you are buying).

Types of consumer products

The following are the four most common types of consumer products offered by businesses:

Convenience products
A convenience product is typically purchased often and appeals to a large market base. Consumers
regularly buy convenience products to meet their needs and tend to have little concern for where they buy
the product.Characteristics of convenience products

 Bought frequently
 Low-priced
 Easily accessible

For example, a candy bar would be considered a convenience product. This product is available in a
variety of places, including gas stations, vending machines and grocery stores. The consumer likely isn't
too picky about where they would buy the product and probably won't develop loyalty to a particular
store when it comes to purchasing candy bars. Additionally, customers rarely spend much time comparing
one candy bar to another but instead purchase candy bars with little thought.Other common convenience
products include:

 Laundry detergent
 Toothpaste
 Vitamins
 Cleaning supplies
 Beverages

Convenience products are the most common type of goods purchased by consumers and are widely
distributed and therefore require mass production. They typically require much less promotion through
marketing compared to other types of products.Related: Product Strategies: What They Are and How
To Write One

Specialty products
Specialty products are those that have unique characteristics or are associated with a particular brand.
People who purchase specialty products carefully source these products and develop loyalty to the
company that produces or sells them. Specialty products are typically priced higher than other types of
products. Hence, many consumers put more stock in buying this type of product due to its perceived
value and ticket price.Characteristics of specialty products

 Standout attributes
 Unique brand perception
 Higher price point
 Available only at select locations

For example, a Porsche is an example of a specialty product. This product can only be purchased through
a Porsche dealership and is known for its unique characteristics. Porsche vehicles are also specifically
recognizable due to the storied Porsche brand. Consumers spend a considerable amount of time sourcing
Porsches and are willing to pay a higher price for this car than competing vehicle brands.Here are a few
more examples of specialty products:

 Watches
 Designer clothing
 Luxury vehicles
 Perfumes

Most specialty products can only be purchased in select stores and are bought much less frequently than
convenience products. They can sell based on reputation and word of mouth but require promotional
advertising to spread awareness of the availability of the product beyond niche, dedicated
buyers.Related: The 5 Stages of the Consumer Decision-Making Process

Shopping products
Shopping products are products that are purchased less frequently than convenience products but more
frequently than specialty products. These products can range in price, style and quality, and consumers
often spend a great deal of time comparing shopping products before purchasing them. Shopping products
are available in fewer locations than convenience products because they are distributed
selectively.Characteristics of shopping products

 Bought less often

 Medium-priced
 Frequently compared to other products

For example, an airline ticket is a common shopping product. Airline tickets are only available through
airline companies and can vary greatly in price. Most consumers will spend time comparing airline tickets
to choose which one best meets their needs and fits within their budget.Other examples of shopping
products include:

 Clothing
 Furniture
 Electronic devices
 Vacuum cleaners

Related: A Guide to Consumer Packaged Goods (Plus Examples)

Unsought products
Unsought products are those that consumers typically don't buy or wouldn't consider purchasing
regularly. Most people who purchase unsought products do not plan the purchase ahead of time. Often, a
consumer doesn't even know that the product exists until the need arises to purchase it. Prices of unsought
products can vary greatly and they typically are not offered by a wide variety of sellers.Characteristics
of unsought products

 Not in the forefront of consumers’ minds

 Extensive advertising and marketing efforts needed

For example, the services provided by certain lawyers are an example of unsought products. Most
individuals do not think about paying a family lawyer until they decide to draft a will or need to contest
one, or need legal advice for divorce, child custody or adoption. If you get injured in a car accident or on
the job due to someone else’s negligence, you might seek a personal injury lawyer to help you get
compensation for medical care, lost wages, or pain and suffering. Here are a few more examples of
unsought products:

 Funeral services
 Life insurance plans
 Smoke detectors
 Fire extinguishers

Many new and innovative goods are considered unsought products until consumers become more aware
of them. Unsought products typically require much more aggressive advertising and marketing compared
to other types of products to spark a need for the product and ensure consumers are aware that it is
available.