In marketing, a product is anything that can be offered to a market that might satisfy a want or need. It is of two types: Tangible (physical) or Intangible (non-physical). Since services have been at the forefront of all modern marketing strategies, some intangibility has become essential part of marketing offers. It is therefore the complete bundle of benefits or satisfactions that buyers perceive they will obtain if they purchase the product. It is the sum of all physical, psychological, symbolic, and service attributes, not just the physical merchandise. All products offered in a market can be placed between Tangible (Pure Product) and Intangible (Pure Service) spectrum.
A product is similar to goods. In accounting, goods are physical objects that are available in the marketplace. This differentiates them from a service, which is a non-material product. The term goods is used primarily by those that wish to abstract from the details of a given product. As such it is useful in accounting and economic models. The term product is used primarily by those that wish to examine the details and richness of a specific market offering. As such it is useful to marketers, managers, and quality control specialists.
A physical item that is offered for sale should not automatically be considered a product if it has no market. Like 95% of patents they at best interesting diversions and at worst a waste of time.
A service is a non-material or intangible product - such as professional consultancy, waitressing, or an entertainment experience.
Product management involves developing strategies and tactics that will increase product demand (referred to as primary demand) over the product's life cycle. One useful technique in understanding a product is the Aspinwall Classification System. It classifies and rates products based on five variables:
- Replacement rate (how frequently is the product repurchased?)
- Gross margin (how much profit is obtained from each product?)
- Buyer goal adjustment (how flexible are the buyers' purchasing habits with regard to this product?)
- Duration of product satisfaction (how long will the product produce benefits for the user?)
- Duration of buyer search behaviour (how long will they shop for the product?)
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