Product is an effect of business manufacturing activity or set of activities. Broadly it also include also services performed by company for its customers.
Different meanings of product
There are different definitions of the product, which depend on area where the term is used:
Other definitions apply to mathematics, biology, chemistry, etc.
Product is anything that can be offered on the market and is able to fulfil needs. Product can be tangible or intangible (service, computer application or even knowledge). Product don't have to be sold. Services of public administration are also products, even if they are free.
Product is a result of processes in the organization which is presented to the customer. In internal customer/supplier approach, one unit can present effects of its work as product (intermediate) to other unit.
Product is a deliverable of deliverables that contribute to project objectives. Similarly as in case of business definition, project can be tangible or intangible or mix of both (multiple products). But the product doesn't need to have market value, but only fulfil project objectives.
Product life cycle
Product life cycle is a time from its introduction to the market to its removal. According to the stage of the life cycle different product strategies should be used. Described in detail in: Product life cycle.
Analysis of products portfolio
Enterprise that produces many different products should observe and compare results of sales and potential of those products. Portfolio analysis helps in decision-making regarding investing in marketing or ceasing production. Key portfolio management methods are:
Classifications of products
Products can be divided due to their durability and materiality, they are:
- Durable products, e.g. products used for some time, do not wear out quickly, e.g. home appliances,
- Unstable products, consumed quickly, e.g. food, cleaning products,
- Services, which are intangible, and can not be owned.
According to purpose, products can be classified as:
- Consumer products that meet needs individuals, some groups of buyers and households. Purchased by the final purchaser and intended for personal use.
- Products supplies (industrial), which are bought by companies for further processing and manufacturing of goods and services.
Frequency of purchase
Consumer products are typically classified by consumers' purchasing habits:
- Frequently purchased products, often without thinking and comparing with other products, usually basic goods purchased on impulse or under urgency,
- Selectable products, usually bought after consideration, but still frequently (clothes, most of cars),
- Special products, that are have unique characteristics, with strong bran identity, special effort is required to buy them, e.g. particular brand of cars,
- Products not perceived, not known by customer, usually innovations.
- Materials and parts - industrial products after processing or as components become components of the product presented to the ultimate buyer,
- Investment goods, serve buyers in the implementation of production process or become an essential element in running the business,
- Products supply, become part of the product presented to the ultimate purchaser, or the final product. They may be material. For enterprise they are frequently purchased products (see: frequency of purchase).
Author: Slawomir Wawak