A product is an item that is developed and refined for sale in the market. It aims to meet the customers needs and wants. The concept of product can be categorised into two, i.e., narrow concept and wide concept. In its narrow concept, a product is a combination of physical or chemical characteristics which has some utilities. It is not just a non-living object or a physical substance. A product also has other functions than its utility like satisfying customer needs and wants, e.g., fan, table, pen, cooler, chair, etc. In its wider concept, a product having a variety of colours, designs, packaging and brand is said to be a different product.
For example, if a shampoo is made available in three different variants and smells, then these are three products, as they are fulfilling needs of customers with varied choices. Hence, product is defined as a complete package of benefits received by a consumer.
It is the sole responsibility of product managers to manage the products. The product management activities comprise of planning, forecasting and marketing of products or services at all stages of the product lifecycle. Broadly, it is a wide range of activities carried-out to deliver a particular product in the market. The branch of marketing that looks at the planning and development aspect of products is known as product management. Brand building and management are also considered a pan of product management. Product marketing has an outward focus whereas product management has an inward focus. Although they have a different approach, yet they complement each other and have similar goals in terms of greater market share, sales volume and profit. The functions and activities related to product management can be both tactical and strategic. These activities are based on the company’s organisational structure. New product development is an important facet of product management.
Characteristics of Product
The key characteristics of a product are as follows:
Tangibility: A product can be perceived by sense of touch. It also has features like to be seen, felt, etc. e.g., car, computers, t-shirt, etc.
Intangible Attributes: Intangible products lack physical substance. They cannot be touched. It is in the form of services, e.g„ repairing services, insurance services, etc. Intangibility can also be an associated feature of tangible products. For example, if a person provides free servicing for a refrigerator, refrigerator is a tangible product, whereas after sales services is an intangible attribute. This means that the product offered is both tangible as well as intangible in
Associated Attributes: The associated features of a product consist of packaging, warranty, brand, etc. For example, Hindustan Lever’s “vanaspathi ghee” is best known by the customers with its brand name DALDA and its packaging. Moreover, it has created such an image that all types of vanaspathi ghee are commonly known as DALDA ghee.
Exchange Value: A product either tangible or intangible in nature must have an exchange value. It should be exchangeable between the seller and buyer at a commonly acceptable price.
Consumer Satisfaction: A product should be capable of satisfying the customers. The type of satisfaction experienced by the customer can be real or psychological. For example, When a consumer purchases branded cosmetics, one also purchases beauty.
Product Hierarchy
There is a hierarchical relation between different products offered to consumers. Starting from category of the need served it goes upto particular product item which actually satisfies that need. The overall product hierarchy is described below:
Need Family: This is the top most level in the product hierarchy. It describes the type of basic need which is to be satisfied by the firm. For example, personal care is One ‘need family’ for any firm.
Product Family: The next level in this hierarchy is ‘product family’. It includes different product classes which can be used to satisfy the targeted basic need_ For example, need for personal care can be fulfilled by different product classes like skin care, hair care, tooth care, etc. These are the product classes which combine to form the ‘product family’ for the ‘need family’, i.e., beauty.
Product Class: The third level of product hierarchy is the ‘product class’. It denotes the group of products having a specific functional consistency within the product family. For example, skin care is a product class for a particular firm.
Product Line: The next level in product hierarchy is ‘product line’. In each product class there are few product lines. Each product line is made-up of number of closely related products. These may be closely related because of similar mode of function, similar price ranges, similar buyer types or similar distribution channels. For example, creams, soaps and deodorants are the product lines which come under the product class of skin care.
Product Type: The next level in product hierarchy is ‘product type’. It denotes the total number of variants available in a particular product line. For example, non-alcoholic, alcoholic, strong or mild deodorants and deodorants for males and females are the product type.
Brand: Brand is the sixth level of product hierarchy and is referred to the name with which one or more products can be identified or recognised. For example, Axe is a brand of male deodorants.
Item: This is the seventh level of product hierarchy and is referred to a particular unit within a product line or brand which can be differentiated on the basis of its appearance, specific feature, shape, sin, weight or price. This unit can also be termed as product variant, sub-variant or stock-keeping unit. For example, Axe black is an item used as deodorant.