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What exactly is a product?

Understanding what a product is

It is important to first understand what exactly a product is. The masses recognise a product as something tangible that can be bought in-store or online.

However, the term ‘product’ refers to a wider range of goods and services that extend beyond that description. Products can also be intangible, like mobile applications. Sometimes, products are used in conjunction with another product (e.g. straws used for cups) or offered as an add-on (e.g. extended warranties). Even you – the customer – can be a product: for social media platforms, the customer is the product because they ‘sell’ the audience’s attention and engagement to advertisers and marketers. [1]

‘The best way to predict the future is to create it.’ – Peter Drucker, Educator, Management Consultant [2]

What do you think a product is?

Before answering this question, use your existing knowledge to come up with a simple definition of a product, and post it into the comments section.

What is a product?

This is the starting question for product managers. In simple terms, a product is an item or service that an organisation sells as per the preferences and specifications of its customers. A product is developed through a process to provide value and hopefully exceed customer expectations. In this context, a product can be understood as a good, service, or even an idea (tangible or intangible). Typically, a product can be classified as physical, digital, or hybrid. Let’s take a quick look at these three general categories:

1. Physical products are tangible products that exist in the real world. Examples include:

  • consumer durables such as vehicles, upholstery, and electronics
  • perishable goods such as fruit and vegetables, meat, and beverages.

2. Digital products are intangible products that live in the digital space. Examples include: + services lie computer software packages + unique experiences such as education, music, computer software.

One advantage of selling digital products is that it can be much cheaper than manufacturing, distributing, and storing physical ones.

3. Hybrid products are a combination of both digital and physical: they are physical products that incorporate digital technologies to reach and serve clients better. For example, you can use a digital application like Uber to book a physical taxi service. Or you can use a physical smartwatch like Fitbit to track your health – which also has a digital application to enhance your Fitbit experience.

Hybrid products are no longer uncommon. Many of the more traditional products are now incorporating digital technologies to reach and serve clients better.

Keeping these three categories of products in mind, we can further segment these into:

  • Business products: These are developed by organisations to serve other organisations that require them for smooth operations and product creation.
  • Consumer products: These are the items an individual purchases for personal or household use.

References

  1. Product Pan. Product Mission; 2021. Available from: https://www.productplan.com/glossary/product-mission/
  2. AZ Quotes. Product Development Quotes; n.d. Available from: https://www.azquotes.com/quotes/topics/product-development.html
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Product Management Essentials

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