Explain the nature and concept of a product. Discuss the criteria on which products are classified

Nature and Concept of a Product

A product is a tangible good, service, or idea that satisfies a want or need of consumers and is offered by a company to the market for exchange or consumption. It encompasses not only physical items but also services, experiences, and even ideas or concepts that can be marketed and sold. Here are key aspects of the concept of a product:

1. Core Benefit or Utility: Products provide a specific benefit or utility to consumers, addressing their needs or desires. For example, a smartphone provides communication, entertainment, and productivity tools.
2. Physical Attributes: Products have tangible features such as design, quality, size, color, and packaging that influence consumer perception and purchasing decisions.
3. Associated Services: Many products are accompanied by services such as warranties, customer support, installation, and maintenance, which enhance their value and customer satisfaction.
4. Branding and Positioning: Products are often differentiated through branding strategies and positioning in the market, creating a distinct identity and perceived value among consumers.
5. Lifecycle: Products have a lifecycle that includes introduction, growth, maturity, and decline stages, affecting marketing strategies and management decisions over time.

Criteria for Classifying Products

Products can be classified based on various criteria, including their characteristics, usage, durability, and buying behavior. Here are common criteria for classifying products, along with examples:

1. Consumer vs. Industrial Products:
   • Consumer Products: Products purchased by individuals or households for personal consumption. They can be classified further into:
     • Convenience Products: Purchased frequently with minimal effort (e.g., snacks, toiletries).
     • Shopping Products: Bought after comparison shopping on criteria such as price, quality, and style (e.g., clothing, furniture).
     • Specialty Products: Unique products with specific characteristics or brand identification for which consumers are willing to make special efforts to purchase (e.g., luxury cars, designer jewelry).
     • Unsought Products: Products that consumers do not actively seek out or may not know about but are purchased due to urgent needs or persuasive marketing (e.g., insurance, emergency medical services).
   • Industrial Products: Products purchased by businesses for use in their operations or to resell to others. They include:
     • Materials and Parts: Raw materials, components, and assemblies used in manufacturing (e.g., steel, electronic components).
     • Capital Items: Long-lasting goods that facilitate production or operations (e.g., machinery, buildings).
     • Supplies and Services: Consumable items and services used in daily operations (e.g., office supplies, maintenance services).
2. Durability and Tangibility:
   • Durable Goods: Products that are expected to last for an extended period (e.g., appliances, vehicles).
   • Non-Durable Goods: Products consumed or used up quickly (e.g., food, toiletries).
3. Use:
   • Consumer Goods: Products intended for personal use and consumption.
   • Industrial Goods: Products used as inputs in the production of other goods or services.
4. Price and Quality: Products can also be classified based on price (e.g., premium vs. economy) and quality (e.g., high-end vs. budget).

Examples

• Convenience Product: Toothpaste is a convenience product because consumers purchase it frequently with minimal effort and comparison.
• Shopping Product: Smartphones are shopping products because consumers compare features, prices, and brands before making a purchase decision.
• Specialty Product: Rolex watches are specialty products due to their unique features, brand prestige, and the effort consumers put into purchasing them.
• Industrial Product (Materials and Parts): Steel used by a car manufacturer in producing vehicles is an industrial material.
• Industrial Product (Capital Item): Robots used in an assembly line by an automotive company are capital items.
• Consumer Durable: Refrigerators are durable goods because they have a long lifespan and are purchased infrequently.
• Consumer Non-Durable: Bread is a non-durable good because it is consumed quickly and needs to be purchased frequently.

Understanding these classifications helps marketers tailor their strategies, positioning, and marketing mix elements to effectively meet the needs and preferences of target customers in different product categories.