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Meaning, Concept & Types of Product

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Meaning of Product

A product may be defined as a bundle of utilities. It consists of various product features and accompanying services. The customer does not buy merely the physical and chemical attributes of a product. A consumer is really buying a product for satisfaction. It can offer him / her expected satisfaction. Therefore, the term ‘product’ does not mean only the physical product. It also means the total product including brand, package and label, the status of manufacturer and distributor and services offered to the customer in addition to the physical product. The term product is inclusive. It means both physical goods such as fan and cycle and also service, credit cards, financial services, persons, places, organizations, and ideas.

Hence,a product is a set of tangible and intangible attributes, including packaging, color, price, quality and brand plus the services and reputation of the seller.

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Source: www.thoughtfulminds.org

According to Philip Kotler, “A product is anything that can be offered to a market for attention, acquisition, use or consumption that might satisfy a want or a need.”

According to Peter D. Benett, “A product may be an idea, a physical entity or a service. Or any combination of the three. It exists for the purpose of exchange in the satisfaction of individual and organizational objective.”

Different Concept of Product

  • Physical concept:

Physical concept is also known as traditional concept which has a physical existence in it. In this concept, physical goods have the physical features like color, name, size, etc. It can be touched, seen and transformed.

  • Service concept:

According to this concept, product cannot be seen and touched. It cannot be owned and the ownership cannot be transferred.It cannot be separated from the service providers. Education, hair cutting, consultancy service, etc are the example of service concept.

  • Augmented concept:

This concept combines tangible and intangible activities. Therefore, the services like warranty, free repair, and maintenance, manual or guides etc. provided to increase the sales are augmented products. For example, while buying a computer, the buyer not only buys the physical computer but also buys the free installation, free repair, and maintenance, packaging, etc.

  • Total product concept:

This concept combines tangible, intangible and augmented product concept. Presentation of the products filled with a tangible and intangible feature in front of customers to sale the product is known as a total product. This includes physical features, benefits, advantages related with goods, intangible services, etc. For example, if one buys a computer then he/she buys another additional service like free installation, repair, and maintenance, home delivery, etc. with it.

Types of Product

According to the traditional classification, the two major categories of goods are: consumer goods and industrial goods. This classification is based on the purpose for which they are primarily used. Typewriters and electric motors are regarded as industrial goods. Soaps and sweets are regarded as consumer goods. This classification does not classify products in water tight compartments. However, classification is necessary for a student of marketing because buying motives differ from buyer to buyer. Marketing situation and problems vary depending upon the category of a product..

Source:analysisproject.blogspot.com

Consumer Product

Consumer products can be defined as those products which are destined for use by the ultimate consumer for their personal or household use. Such products are directly used by the individual. Ultimate consumers are satisfying non-business and they constitute consumer market.

According to American Marketing Association, “Consumer goods are those destined for used by the ultimate consumer or household and in such form that can be used without commercial processing.”

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Source: bestinpackaging.com

Consumer products can be further classified into convenience product, shopping product, specialty products, and unsought products. A brief description of products has been given below:

i. Convenience Product

Convenience products are those products which are purchased by the customers without spending their time from the convenient places that, too, from the nearby where they are residing.According to Philip Kotler, “Convenience products are goods that the customers usually purchase frequently, immediately with a minimum effort.” These goods are usually familiar with the customers. Thus, cigarettes, soaps, bulbs, flashlight and low-priced electrical equipment etc. are convenience products. They can be further classified into three categories:

  • Staple product
  • Impulse product
  • Emergency product

ii. Shopping product

Shopping products are those products where consumers devote considerable time in making a selection of those before they buy. The consumers want to compare a quality, price, and style in several shops before they buy. According to Philip Kotler, “Shopping goods are the goods that the customers, in the process of selection and purchase, characteristically compare on such bases as suitability, quality, price, and style.” Furniture items, dress materials, shoes, and household appliances are the examples of shopping products.

iii. Speciality Product

Speciality products are those product which enjoy a set of special features. Special efforts are made in their purchase. These products possess’ unique characteristics and brand identification which calls for special efforts. According to Melvin T. Coplenad, “Specialty goods are those which have some attraction for the consumers, other than price, which induces him/ her to put in a special effort to visit the store in which they are sold and to make a purchase without shopping.”

iv. Unsought Product

Unsought product are those products that do not fall in any of the above categories, but they are important for the customer. The customer might not know the existence of the product or know but do not think of buying them.Such goods are not normally bought by the customer unless there is a high level of promotion campaign showing the necessity of those products for satisfying their needs.

Industrial products

Industrial products are those products which are used in producing other goods or rendering services. These are the products that are to be sold to ultimate consumers. The main characteristics of industrial goods are a geographical concentration of the market, a limited number of buyers, a large unit of individual purchase and technical considerations. These goods have a derived demand.

According to American Marketing Association, “Industrial goods which are destined to be sold primarily for use in producing other goods or rendering services as contrasted with goods destined to be sold primarily to the ultimate consumers.”

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Source:www.linkedin.com

Industrial goods can be classified into following five categories:

i. Raw materials

Raw materials are the industrial goods. They have not been processed except for their physical handling. Raw materials may be divided into natural products- minerals and product of the forests and the seas and agricultural products- wheat, cotton, tobacco and animal products such as eggs and raw milk.

ii. Fabricating material & parts

Fabricating materials and parts are the industrial goods. These goods have undergone manufacturing processes but they need further processing or need to be combined with other materials or parts before they are ready to reach the ultimate consumers.

iii. Equipment

Equipment are used merely to provide facilities to the manufacturer, as they cannot be part & parcel of finished goods. Unit price and life are less than installations. For example, tools, such as screwdrivers, files set, spanners set, computers, time clock, conveyers, sharpeners, typewriter, etc.

iv. Installation

Installations means major industrial equipment’s and major machinery in the industry. It can be consumed only after repeated usage due to wear and tear. They are long life orientated and very costly enough. These goods are designed and produced only against the order with a view to meet the special needs of an individual purchaser.

v. Operating supplies

Operating supplies mean the goods which are used by the industrial producer with a view to provide facilities for the operation of machine or plant continuously without loss of time, but which will not become a part of the finished product. Operating supplies are the physical items required for running of a manufacturing production or service facility owned by a business.

References:

Koirala, Dr. Kundan Dutta. Elementary Marketing. Kathmandu: Buddha Academic Publishers and Distributors Pvt. Ltd, 2014.

Thapa, Gopal, Dipendra K. Neupane and Dilli Raj Mishra. Introduction to Marketing. Kathmandu: Asmita Books Publishers and Distributors (P) Ltd., 2014.



  1. A product may be defined as a bundle of utilities.
  2.  According to the traditional classification, the two major categories of goods are consumer goods and industrial goods.
  3. Consumer products can be further classified into convenience product, shopping product, specialty products and unsought products.
  4. Industrial goods can be classified into five categories: Raw Materials, Fabricating material and parts, Equipment, Installation and Operating supplies.
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