Note on Concept And Levels of Product And Product Classification

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Concept and Levels of Product

Product is defined as anything that is offered to a market for acquisition, attention, use, or composition that might satisfy the need and want of the consumer. Products consist more than just tangible goods. A broadly defined product consist of physical object, services, persons, events, places, organization , phone ,ideas, or the mixes of all these components. An Apple iPod, a Toyota Camry, and a Caffe Mocha on Starbucks are products. Due to their importance in the economy, we give special attention to services. Services are the form of products which consists of various activities, benefits, satisfactions offered for the sale which is essential and does not result in the ownership of anything. The examples of services are banking, airline, hotel, retail, tax preparation, and also home repair services.

Products, Services, and Experiences

Product is one of the key element of all package of market offerings. Marketing- mix planning starts with formulating an offering which value to the target customers. This offering becomes one of the basis that the company builds a profitable relationship with their consumers. A consumer market offerings often consist both tangible goods and services. Each and every component can be a major or minor part of the overall offer. At one extreme, the offer might consists of a pure tangible good, like soap salt or toothpaste.

Todays, as product and services are more commoditized, much of the companies are moving towards the new level while creating the value to their customers. In order to differentiate their offers, beyond only making products and delivering services, they are managing and creating the customer experiences with their company or products.


Levels of Products and Services

Product planners need to think about services and product in three levels which add more customer value. The most basic level is Core Benefit, that addresses the question, What is really the buyer buying? while designing the products, marketers must first define the core, problem-solving benefits or services that consumer seek . A woman who is buying a lipstick is buying more than a lips color. Charles Revson od Revlon saw this early: “ At the factory, we make cosmetics but in store we sell hope”. And the people who are purchasing iPhone are buying more than a wirelesphone,email and web browsing device , or personal organizer. They are buying freedom and connectivity to the people and resources.

At the second level. Planners of the product must turn the core benefit into the Actual Product. They must have to develop products and services design, features, quality level, the name of brand and packaging. For example, iPhone is a product. Its name, parts, features, styling, packaging and other attributes all have been combined very carefully to deliver the core benefit of the staying connected.

At last the product planners must make an Augmented product around the core benefit and actual product by offering the extra or additional customer services and benefits. Iphone must deliver more than just a communicating device. It must provide customers with complete solutions towards mobile connectivity. Thus when a customer buys an iPhone, the company and dealers must be able to give buyers a warranty on parts as well as workmanship, instructions on to use devices, quick repair services whenever required and also a toll-free telephone number and website for the use if they have any problems or questions.

Customer views the products as the complex bundle's benefits that satisfy their wants and needs. While developing a products marketers first must able to identify the core customers needs the product will satisfy. Then they should design the actual product and also find the ways to augment it for the creation of the bundle of benefits that will generate and provides most satisfying customer experience.


Products and Service Classification

Products and services fall into two broad classes that are based on the types of consumers that use them- consumer products and industrial products. Products also consist of other marketable components like experiences, organizations, persons, places and ideas.

Consumer products
Consumer products
Source: wp-content/uploads/2015/10/Consumer-Products.jpg




Consumer Products

Consumer products are product and services which are bought by the final consumers for the personal use. Consumer Products consists of Convenience products, shopping products, specialty products and Unsought Products.

Convenience Product

Convenience products are those products and services which consumer normally buys frequently, immediately and with a minimum of comparison and less buying effort. Examples: Soap, suitability ,Newspapers, Candy etc.

Shopping products

Shopping products are less frequently purchased customer products and services which customers compare more suitability, price, quality and style.

Example: Furniture , clothing, used cars, major appliances. etc.

Specialty Products

Specialty products are customer products and services with unique characteristics or brand identification for which only significant group of buyers is willing to make special purchase effort.

Examples: High-class photographic equipment , designer clothes, brands of cars etc.

Unsought product

Unsought product is customer products that the customer either does not know about or knows about but does not usually think of purchasing. Unsought products require a lot of advertising , personal selling and other marketing efforts due to their nature.

Examples: Life Insurance, Blood donation etc

Industrial products

Industrial Products are that product that is bought by the individuals and the organizations for the use in conducting a business. The major difference between a consumer product and industrial product is the purpose of purchasing. If a consumer purchases a lawn mower for use around the home, then it is a consumer product whereas the same consumer buys the same lawn mower for use in landscaping, it is an industrial product.

Three groups of Industrial products and services consists of Material and parts, Capital items, and Supplies and Services.

Materials and Parts are raw materials and the manufactured materials and parts.

Example: Fruits , vegetables, cotton, small motors , tires etc.

Capital Items are those industrial products that aid in buyers operation or productions, including installations and accessory equipment.

Example: hand tools , fax machines, computers, desk etc.

Supplies consist operating supplies like lubricants, coal, paper, pencils,etc. and repair and maintainence items like paint , nail, brooms etc.




Kotler, P., & Armstrong, G. (2013). Principles of Marketing. Chennai: Pearson India Education Services Pvt Ltd









  • Product is defined as anything that is offered to a market for acquisition, attention, use, or composition that might satisfy the need and want of the consumer.
  •  Marketing- mix planning starts with formulating an offering value to the target customers.
  • Customer views the products as the complex bundle's benefits that satisfy their wants and needs



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