Products are at the heart of marketing. The product needs to exist for the other elements of the mix to happen.
What is a product? A product is:
"anything that is capable of satisfying customer needs"
This definition therefore includes both:
Physical products – e.g. trainers, games consoles, DVD players, take-away pizzas
Services – e.g. dental treatment, accountancy, insurance, holidays, music downloads
A product can be said to have three elements:
1, Core benefits
What the product does - the main functions of the product
E.g. washing machine – it cleans clothes Cinema – it shows a film you want to see
2. Tangible or physical element
What the product is made of; what it looks like; dimensions or duration E.g. 500g of ice-cream
A flat-screen, plasma television which is HDTV compatible
3. Augmented benefits
The extra elements which add to the perceived value of the product in the eyes of the consumer
Augmented benefits can be tangible (e.g. materials, weight, extra features) or intangible (e.g. brand name, after-sales service, reputation for reliability)
E.g. free installation, full money-back guarantee
Often the augmented benefits of a product are the key determinant of whether a customer decides to buy. Many successful businesses really understand this. A great example was cosmetics leader Elizabeth Arden. She certainly knew what she was selling. It wasn't pots of cream and cosmetics, it was much more than that, she understood what her customers where really buying from her... she said
"I don't sell cosmetics…I sell hope"
Products can be split into two broad categories:
Goods – physical products that you can touch and feel, e.g. food and clothing
Services – products that are non-physical – watching a film, having a hair-cut
It is important to appreciate that a service is still a product – even though there is nothing you can touch.
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