Product
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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:
- economics,
- business,
- project management.
Other definitions apply to mathematics, biology, chemistry, etc.
Economics
Product is a good or a service. Good is a tangible commodity that fulfils human needs and provides utility to the user. Service is an intangible commodity.
Business
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.
Project management
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
Durability
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.
Purpose
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.
Industrial products
- 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).
See also:
Examples of Product
- Physical Goods: This includes tangible items such as food, beverages, clothing, electronics, furniture, toys, and more. For example, Apple produces products such as the iPhone, iPad, and Macbook.
- Software Products: This includes computer programs, applications, and operating systems. For example, Microsoft produces the Windows operating system and Office Suite.
- Services: This includes services such as consulting, financial advice, legal advice, and more. For example, Deloitte provides accounting, consulting, and financial services to its clients.
- Digital Products: This includes digital items such as music, videos, images, ebooks, and more. For example, Amazon sells digital music and video downloads on its platform.
- Experiences: This includes experiences such as events, trips, and attractions. For example, Disney offers theme park experiences and Broadway shows.
Advantages of Product
Product is a tangible result of business activity, which offers a variety of advantages to the company. These include:
- Increased sales and profits. By producing a product, a company can reach more customers and increase its sales and profits. Through product marketing and advertising, companies can further increase their sales and profits.
- Improved customer satisfaction. By producing a quality product, companies can provide customers with a better experience and build brand loyalty. The product can also help customers to save time and money.
- Enhanced brand image. By creating a product, companies can create a positive image for their brand and increase their visibility. This can help to attract more customers and build customer loyalty.
- Increased efficiency. Producing a product can help companies become more efficient and reduce costs. This can also help them to reduce their environmental impact.
- Improved market share. By producing a product, companies can gain a larger market share and become more competitive. This can help them to gain a larger share of the market and increase their profits.
Limitations of Product
Product has its own limitations, which need to be taken into account during the production process. These limitations involve:
- Cost: There are certain costs associated with product production, such as materials, labor, and overhead costs. Companies need to make sure that the cost of producing a product is not higher than the projected sales revenue.
- Quality: The quality of a product is essential in order to ensure customer satisfaction. Products need to be tested and checked for any defects or errors before they are released onto the market.
- Time: The amount of time needed to produce a product is also a limitation. Companies need to carefully plan and organize their production processes in order to meet customer demands in a timely manner.
- Availability: The availability of resources is also a limitation. Companies need to make sure that they have enough materials and personnel to complete production within the set timeframe.
- Regulations: Regulations regarding product safety and quality may limit the type of products a company can produce. Companies must make sure that their products comply with the relevant regulations.
A product is an effect of business manufacturing activity or set of activities, and can also include services performed by a company for its customers. Other approaches related to product include:
- Product Lifecycle Management (PLM): PLM is a methodology that is used to track the entire lifecycle of a product from its conception to its eventual retirement or disposal. It involves the management of product design, development, production, and marketing in order to ensure the product meets customer needs and market demands.
- Product Development: Product development is the process of creating a new product or improving an existing product. It includes market research, concept testing, product design, prototyping, marketing, and manufacturing.
- Product Marketing: Product marketing is a process of introducing a product to potential customers. It includes market research, segmentation, positioning, product promotion, pricing, and product distribution.
- Product Costing: Product costing is the process of assigning costs to a product. It involves identifying the cost of material, labor, overhead, and any other costs associated with the production of a product.
In summary, product is an effect of business manufacturing activity or set of activities, and can also include services performed by a company for its customers. Other approaches related to product include Product Lifecycle Management (PLM), Product Development, Product Marketing, and Product Costing.
References
Author: Slawomir Wawak
