What is a Product?

A product is anything that can be offered to a market to satisfy a need or want. It can be
physical goods which is tangible, services, experiences, or even ideas which are intangible.
Products are designed to provide value and solve problems for customers. Successful
products often meet or exceed customer expectations, leading to satisfaction and loyalty.

Types of Products:

Physical Products: These are tangible items that customers can see, touch, and feel.
Examples include smartphones, cars, clothing, and appliances.

Services: Services are intangible and involve actions or tasks performed for customers.
Examples include haircuts, consulting services, healthcare, and banking.

Consumer Products:

Consumer products are intended for personal use by individuals or households. They can be
categorized further into convenience, shopping, and specialty products.

Convenience products are everyday items like toothpaste and snacks.

Shopping products require more thought and comparison, such as electronics or clothing.

Specialty products are unique items with strong brand loyalty, like luxury watches.

Industrial Products (B2B):

These are products used by businesses and organizations for production or operations.
Examples include machinery, raw materials, office supplies, and software.

Durable and Non-Durable Products:

Durable products are long-lasting and can be used over an extended period, such as cars or
furniture.
Non-durable products are consumed relatively quickly and need frequent replenishing, like
food or toiletries.

Fast-Moving Consumer Goods (FMCG):

FMCG refers to low-cost, frequently purchased consumer products with a short shelf life.
Examples include beverages, snacks, and personal care products.

Capital Goods:

Capital goods are long-term investments by businesses, such as machinery, vehicles, and
factory equipment.

1|Page
Augmented Products:

Augmented products include additional features, services, or warranties to enhance the core
product. For example, when purchasing a laptop, the warranty, customer support, and
software included are part of the augmented product.

Experiential Products:

These products focus on providing unique experiences to customers. Examples include theme
park visits, concerts, and vacations.

Digital Products:

Digital products are intangible items distributed electronically. They encompass software, e-
books, streaming services, and mobile apps.

Generic and Brand Products:

Generic products lack branding and are typically lower in price. Brand products are
associated with a specific brand and often command higher prices due to brand reputation and
quality.

Green and Eco-Friendly Products:

These products prioritize environmental sustainability and are designed to have minimal
ecological impact.

Understanding the different types of products is essential for marketers as it helps them tailor
their marketing strategies, pricing, promotion, and distribution to effectively meet the unique
characteristics and needs of each product category and its target audience.

The distinction between a product and a service

Understanding the distinction between a product and a service is crucial for marketers as it
influences how they develop marketing strategies, communicate value propositions, and
manage customer experiences. Here's a detailed distinction between the two from a
marketer's perspective:

Product:

Tangibility:
Products are tangible, physical items that customers can see, touch, and often evaluate before
purchase. Marketers can focus on features, design, packaging, and aesthetics to create a
compelling product.

2|Page
Ownership:
Customers typically purchase and own products, which they can use repeatedly or over an
extended period. Marketers can emphasize product durability and lifespan as selling points.

Production and Inventory:

Products are manufactured, stored in inventory, and shipped to retailers or customers.

Marketers must manage inventory levels, production efficiency, and distribution logistics.

Quality Assurance:

Quality control is vital in product marketing to ensure consistency and meet customer
expectations. Marketers may highlight product warranties and guarantees to build trust.

Customization:
Product customization options can be limited compared to services, as mass production often
drives economies of scale. Marketers can promote product variants or options to cater to
different customer preferences.

Value Proposition:

Product marketing often focuses on physical attributes, features, and benefits. Marketers
emphasize how the product solves a problem or fulfils a need.

Pricing:
Pricing strategies may involve considering production costs, competitive pricing, and
perceived value. Discounts, bundling, and price promotions can be used to influence buying
decisions.

Service:

Intangibility:

Services are intangible and do not have a physical form, making it challenging for customers
to assess their quality in advance. Marketers must rely on communication and trust-building
to convey service value.

Ownership:

Customers do not own services; they purchase the experience, expertise, or assistance
provided by the service provider. Marketers focus on creating a positive customer experience
and building relationships.

3|Page
Real-Time Delivery:

Services are often delivered in real-time, with customers directly interacting with service
providers. Marketers need to ensure consistency and quality in service delivery.

Quality Assurance:

Quality assurance in services is based on factors like employee training, customer

interactions, and service consistency. Marketers emphasize employee expertise, certifications,
and customer testimonials.

Customization:
Services can be highly customized to meet individual customer needs, as they often involve
personal interactions. Marketers may offer personalized service options and tailor offerings to
specific customer requirements.

Value Proposition:

Service marketing emphasizes the intangible benefits, convenience, expertise, and problem-
solving capabilities offered. Marketers focus on how the service addresses customer pain
points and improves their situation.

Pricing:
Pricing services can be complex and may involve hourly rates, subscriptions, or performance-
based fees. Marketers highlight the value of the service, often based on outcomes or
convenience.

In summary, while both products and services provide value to customers, they differ in
tangibility, ownership, delivery, quality assurance, customization, value proposition, and
pricing. Marketers must adapt their strategies accordingly to effectively market either
products or services.

Levels of Product
Potential Product

Augmented Product

Expected Product

Actual /Basic Product

Core Product

4|Page
In marketing, the concept of "Levels of Product" is a framework that helps businesses and
marketers understand and structure their product offerings. This concept was introduced by
Philip Kotler, a renowned marketing expert. It consists of five levels, each representing a
different aspect of the product's value and functionality. These levels are often used to design
comprehensive marketing strategies and meet customer needs effectively. Here's a detailed
explanation of the five levels of product:

Core Product

The core product is the fundamental benefit or problem-solving aspect that customers seek
when purchasing a product. It addresses the core needs or desires of the customer. For
example, when buying a smartphone, the core product is communication and access to
information. Marketers must understand what the core benefit is for their target audience, as
it forms the foundation of the product offering.

Actual Product:

The actual product represents the tangible features and attributes of the product that
customers can see, touch, and evaluate. It includes physical characteristics, design,
packaging, branding, and any additional features. For a smartphone, the actual product
includes the physical device, screen size, camera quality, operating system, and design
elements.

Expected Product:

The expected product represents customers' minimum expectations of a product. Failing to

meet these expectations can lead to dissatisfaction. It includes the basic features and benefits
that customers assume they will receive when purchasing a product in a particular category.
For a smartphone, customers expect it to have basic functionality, such as making calls,
sending texts, and connecting to the internet.

Augmented Product:

5|Page
The augmented product includes additional features, services, or benefits that enhance the
core product's value. These extras are not essential but add value and can differentiate a
product from competitors. For a smartphone, augmented product elements might include a
warranty, customer support, pre-installed apps, and access to software updates.

Potential Product:

The potential product represents future developments, innovations, or enhancements that a

company could introduce to stay competitive and meet evolving customer needs. It involves
anticipating and preparing for changes in customer preferences, technological advancements,
and market trends. In the smartphone industry, potential product features might include new
technologies like foldable screens, improved battery life, or advanced AI capabilities.

Understanding and managing these levels of product is crucial for developing effective
marketing strategies. It allows businesses to differentiate their offerings, add value to their
products, meet customer expectations, and stay ahead of competitors. Additionally,
considering the potential product level ensures companies remain innovative and adaptable in
a rapidly changing market landscape.

The concepts of Product Mix, Product Line, Product Length, Product Width, Product
Depth, and Product Consistency.

Product Mix:

Product mix refers to the complete set of products or services that a company offers to its
customers. It includes all the various product lines and individual products within those lines.
Example: An electronics company's product mix may consist of product lines like
smartphones, laptops, and tablets, with each line comprising multiple models and variations.

Product Line:

A product line represents a group of related products that share common characteristics or
serve a similar market segment. It's a way to categorize products within a company's product
mix. Example: In the automobile industry, a company might have a product line of SUVs,
within which there are different models with various features and price points.

Product Length:

Product length refers to the total number of products or models within a specific product line.
It measures the depth of the product line. Example: If a cosmetics company has 15 different
shades of lipstick as part of its lipstick product line, the product length of the lipstick line is

6|Page
15.

Product Width:

Product width refers to the number of different product lines a company offers. It indicates
the diversity of product categories within a company's product mix. Example: A retail store
might have product lines for clothing, electronics, home decor, and groceries, indicating a
wide product width.

Product Depth:

Product depth measures the variations and options within each product line. It shows how
many choices are available to customers within a specific line. Example: A shoe brand's
product line for running shoes may have different variations in terms of sizes, colours, and
support types, indicating a deep product depth.

Product Consistency:

Product consistency assesses the relatedness of various product lines within a company's
product mix. It looks at how well the products fit together in terms of brand identity and
target audience. Example: A company known for eco-friendly products may have product
consistency if it expands into new product lines like reusable water bottles, organic clothing,
and environmentally friendly cleaning supplies.

Marketers use these concepts to strategically manage a company's product offerings, ensuring
that they align with customer preferences, market demands, and the overall business strategy.
Balancing product mix, line, length, width, depth, and consistency is essential to meet the
diverse needs of consumers while maintaining a strong brand identity.

achieve success in their respective missions.

The distinction between a product and a service

Understanding the distinction between a product and a service is crucial for marketers as it
influences how they develop marketing strategies, communicate value propositions, and
manage customer experiences. Here's a detailed distinction between the two from a
marketer's perspective:

Product:

Tangibility:
Products are tangible, physical items that customers can see, touch, and often evaluate before
purchase. Marketers can focus on features, design, packaging, and aesthetics to create a
compelling product.

7|Page
Ownership:
Customers typically purchase and own products, which they can use repeatedly or over an
extended period. Marketers can emphasize product durability and lifespan as selling points.

Production and Inventory:

Products are manufactured, stored in inventory, and shipped to retailers or customers.

Marketers must manage inventory levels, production efficiency, and distribution logistics.

Quality Assurance:

Quality control is vital in product marketing to ensure consistency and meet customer
expectations. Marketers may highlight product warranties and guarantees to build trust.

Customization:
Product customization options can be limited compared to services, as mass production often
drives economies of scale. Marketers can promote product variants or options to cater to
different customer preferences.

Value Proposition:

Product marketing often focuses on physical attributes, features, and benefits. Marketers
emphasize how the product solves a problem or fulfils a need.

Pricing:
Pricing strategies may involve considering production costs, competitive pricing, and
perceived value. Discounts, bundling, and price promotions can be used to influence buying
decisions.

Service:

Intangibility:

Services are intangible and do not have a physical form, making it challenging for customers
to assess their quality in advance. Marketers must rely on communication and trust-building
to convey service value.

Ownership:

Customers do not own services; they purchase the experience, expertise, or assistance
provided by the service provider. Marketers focus on creating a positive customer experience
and building relationships.

8|Page
Real-Time Delivery:

Services are often delivered in real-time, with customers directly interacting with service
providers. Marketers need to ensure consistency and quality in service delivery.

Quality Assurance:

Quality assurance in services is based on factors like employee training, customer

interactions, and service consistency. Marketers emphasize employee expertise, certifications,
and customer testimonials.

Customization:
Services can be highly customized to meet individual customer needs, as they often involve
personal interactions. Marketers may offer personalized service options and tailor offerings to
specific customer requirements.

Value Proposition:

Service marketing emphasizes the intangible benefits, convenience, expertise, and problem-
solving capabilities offered. Marketers focus on how the service addresses customer pain
points and improves their situation.

Pricing:
Pricing services can be complex and may involve hourly rates, subscriptions, or performance-
based fees. Marketers highlight the value of the service, often based on outcomes or
convenience.

In summary, while both products and services provide value to customers, they differ in
tangibility, ownership, delivery, quality assurance, customization, value proposition, and
pricing. Marketers must adapt their strategies accordingly to effectively market either
products or services.

Levels of Product
Potential Product

Augmented Product

Expected Product

Actual /Basic Product

9|Page
 Core Product

In marketing, the concept of "Levels of Product" is a framework that helps businesses and
marketers understand and structure their product offerings. This concept was introduced by
Philip Kotler, a renowned marketing expert. It consists of five levels, each representing a
different aspect of the product's value and functionality. These levels are often used to design
comprehensive marketing strategies and meet customer needs effectively. Here's a detailed
explanation of the five levels of product:

Core Product

The core product is the fundamental benefit or problem-solving aspect that customers seek
when purchasing a product. It addresses the core needs or desires of the customer. For
example, when buying a smartphone, the core product is communication and access to
information. Marketers must understand what the core benefit is for their target audience, as
it forms the foundation of the product offering.

Actual Product:

The actual product represents the tangible features and attributes of the product that
customers can see, touch, and evaluate. It includes physical characteristics, design,
packaging, branding, and any additional features. For a smartphone, the actual product
includes the physical device, screen size, camera quality, operating system, and design
elements.

Augmented Product:

The augmented product includes additional features, services, or benefits that enhance the
core product's value. These extras are not essential but add value and can differentiate a
product from competitors. For a smartphone, augmented product elements might include a
warranty, customer support, pre-installed apps, and access to software updates.

10 | P a g e
Expected Product:

The expected product represents customers' minimum expectations of a product. Failing to

meet these expectations can lead to dissatisfaction. It includes the basic features and benefits
that customers assume they will receive when purchasing a product in a particular category.
For a smartphone, customers expect it to have basic functionality, such as making calls,
sending texts, and connecting to the internet.

Potential Product:

The potential product represents future developments, innovations, or enhancements that a

company could introduce to stay competitive and meet evolving customer needs. It involves
anticipating and preparing for changes in customer preferences, technological advancements,
and market trends. In the smartphone industry, potential product features might include new
technologies like foldable screens, improved battery life, or advanced AI capabilities.

Understanding and managing these levels of product is crucial for developing effective
marketing strategies. It allows businesses to differentiate their offerings, add value to their
products, meet customer expectations, and stay ahead of competitors. Additionally,
considering the potential product level ensures companies remain innovative and adaptable in
a rapidly changing market landscape.

The concepts of Product Mix, Product Line, Product Length, Product Width, Product
Depth, and Product Consistency.

Product Mix:

Product mix refers to the complete set of products or services that a company offers to its
customers. It includes all the various product lines and individual products within those lines.
Example: An electronics company's product mix may consist of product lines like
smartphones, laptops, and tablets, with each line comprising multiple models and variations.

Product Line:

A product line represents a group of related products that share common characteristics or
serve a similar market segment. It's a way to categorize products within a company's product
mix. Example: In the automobile industry, a company might have a product line of SUVs,
within which there are different models with various features and price points.

Product Length:

Product length refers to the total number of products or models within a specific product line.
It measures the depth of the product line. Example: If a cosmetics company has 15 different

11 | P a g e
shades of lipstick as part of its lipstick product line, the product length of the lipstick line is
15.

Product Width:

Product width refers to the number of different product lines a company offers. It indicates
the diversity of product categories within a company's product mix. Example: A retail store
might have product lines for clothing, electronics, home decor, and groceries, indicating a
wide product width.

Product Depth:

Product depth measures the variations and options within each product line. It shows how
many choices are available to customers within a specific line. Example: A shoe brand's
product line for running shoes may have different variations in terms of sizes, colours, and
support types, indicating a deep product depth.

Product Consistency:

Product consistency assesses the relatedness of various product lines within a company's
product mix. It looks at how well the products fit together in terms of brand identity and
target audience. Example: A company known for eco-friendly products may have product
consistency if it expands into new product lines like reusable water bottles, organic clothing,
and environmentally friendly cleaning supplies.

Marketers use these concepts to strategically manage a company's product offerings, ensuring
that they align with customer preferences, market demands, and the overall business strategy.
Balancing product mix, line, length, width, depth, and consistency is essential to meet the
diverse needs of consumers while maintaining a strong brand identity.

12 | P a g e