Definition of a product
According to Kotler and Armstrong (2001), 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 organizations and ideas.
In developing a product, the product planner needs to think about the product on three levels
1) Core product: What the buyer is really buying. It is the benefit within a product. It stands at the centre of the total product.
2) Tangible product: This is a product that has such characteristics as quality level, features, styling, brand name and packaging e.g. perfumes, computers etc
3) Augmented product: This is a product which has additional services and benefits e.g IBM computers.
Products can be classified into three according to their durability or tangibility. These three classifications are:
1) Durable goods: Durable goods are tangible goods. They aim to serve the user a series of continuous use without spoiling or easy wearing out. They usually last a long period of time. Examples of durable goods include cars, consumer electronics, water dispenser, and home appliances amongst a few. Due to the heavy price tags on most durable products, they most often require personal selling and services, and after sales servicing guarantee to convince buyers to purchase them.
2) Non- durable goods: Non-durable goods also called soft goods are tangible goods that are to be used for a short period of time. They can be consumed in one use or serve only a few continuous uses. Examples of non-durable goods include: soap, toothpaste, salt, and consumables such as foods and drinks.
3) Services: Services are activities, benefits or satisfactions rendered to an individual or business for the purpose of exchanging it for money or other services. Examples of services include car repair services, haircuts, auditing and investigation services, tax services, due diligence. Services are bought to satisfy a need or want, and the factors that lead buyers to purchasing services from a particular supplier include the supplier credibility and adaptability, and the level of quality control.
Other types of products include:
4) Consumer goods: Consumer goods are goods bought and used by consumers. They are not intermediate goods as they are not needed for the production of another good. Their sole purpose is to provide utility to final consumers. Marketers usually classify the goods on the basis of consumer shopping habits because the way consumers shop for products has direct implications for marketing strategy. There are four types of consumer goods. They are:
a) Convenience goods: Convenience goods are characterized as not been too expensive; it is driven by impulse buying from consumers, and is usually purchased repetitively. Convenience goods can be divided into staples; goods consumers purchase on a regular basis, impulse goods; goods purchased without any prior plan to do so, and emergency goods; Good purchased due to an emergency or an urgent need e.g the purchase of an umbrella during a rainstorm.
b) Shopping goods: Shopping goods require a thorough selection process unlike the convenience goods. Buyers compare factors such as the price, suitability, quality and so on before making a buying decision. Examples of shopping goods include clothing, electronic items, furniture, cars etc.
c) Specialty goods: Specialty goods as the name implies are special purpose goods demanding special orders or purchase orders from a significant group of buyers willing to make the purchase. Examples of specialty goods are cars, photographic equipment, movie cameras (e.g R.E.D and Arri Alexa.
d) Unsought goods: These are goods whose sales are driven by the marketing prowess of the seller. It is unknown to buyers, and they have to be convinced of the benefit of risking it and purchasing such goods. Unsought goods involve a lot of advertising and marketing to make consumers aware of the existence of such goods.
5) Industrial goods: Industrial goods are goods bought by individuals or organizations for further processing. They are intermediate goods to the buyer which would help in the production of a finished product. Please do note in the above definition the phrase “to the buyer”. This is because a good can be classified as a consumer good or an industrial good based on the purpose for which the product is purchased. A particular product might be a consumer or industrial product depending on the buying situation.
Industrial goods can be classified based on when they enter into the production process and their costliness. For this reason, we can classify them into three groups, which are:
a) Material and parts: These are goods entered into the manufacturing process either as materials needed to be built on or a component of an already finished product. They can be subdivided into raw materials and manufactured materials and parts. Raw materials usually begin the production process. Labour works on these materials to produce semi-finished goods or finished products at the end of the production process. Manufactured materials on the other hand include component materials and component parts. Component materials are usually processed further, while component parts enter into the finished product completely with no further change in its form.
b) Capital Items: Capital items aid the process of production; they enter into the finished product partly. Capital items can be subdivided into installations and accessory equipment. The former are capital intensive purchases, purchased directly from the producer, and set up to aid a production process. Installations include buildings such as factories and offices, and also fixed equipment and machines. The latter on the other hand is not necessarily capital intensive. Like installations, they also aid the production process. They include portable factory and office equipment. Examples of portable factory equipment are lift trucks and hand tools, while some examples of office equipment include typewriters, computers, photocopy machine.
c) Supplies: Supplies do not enter the finished product, they are used for either maintenance or operating purposes. Supplies are mostly recurring expenditures. They are similar to convenience goods because they are bought with little or no effort, and as mentioned earlier, they are recurring. Examples of supplies for maintenance purposes include: paint, nails and brooms, while for operating purposes include lubricants, coal, typing paper and pencils.