Classification of products
A product is a good or service that satisfies a customer's needs.
According to Philip Kotler, a product is:
'Anything that can be offered to a market for attention, acquisition or consumption that might satisfy a want or a need. It includes physical objects, services, persons, places, organisations and ideas'.
A product can be a tangible or visible item, such as a chair, that can be touched and seen, or intangible or invisible, such as a service like education or health services.
Services cannot be seen - what is provided is the skill or expertise of another person or group. However, the result of a service normally can be. For example, if a plumber unclogged a pipe, the water would then flow freely. In reality few services do not have a physical element (e.g. textbooks and desks at a school) and few goods come without a service element (e.g. delivery, after sales service and credit facilities) with a car.
Product is only one element of the marketing mix. For example, a firm may create value added for their products through promotion of the products virtues and branding, which may be complemented by suitable pricing.
It is extremely uncommon for a firm to sell as single product.
Can you think of any firm that sells a single good or service?
Firms will normally sell a range of products, which can be grouped or categorised in the following ways:
A product item is a specific version of a product e.g. brand/size/model.
A product line is a set of individual products that are closely related and marketed by the same organisation and intended for similar, but not identical buyers, e.g. P&G make laundry products such as Daz, Bold, Ariel and Ace and Cadbury make chocolate bars such as Flake, Dairy Milk, Crunchie and Time Out.
Line stretching - this may be through lengthening the product line either upwards into higher quality items or downwards into lower quality items, or in both directions at once. Audi has recently decided to produce a smaller versions of their cars - the A1 and A2 appealing to the family sector, rather than to the executive market. This is in response to BMW's one series and Mercedes A and B Class.
Some firms take the approach that they will use a different brand name when they line stretch. National Panasonic, sells its premium electronic equipment as Technics and Toyota markets its executive cars under the Lexus brand.
Line filling - gaps in the line are filled with new product offerings. The objective here is to differentiate the new products from existing products, otherwise the firm will be creating competition for its own brands. However, it may be that the firm is not concerned if the new product takes some sales from its existing brands, provided it takes an equal number from competitor brands. Detergent manufacturers, such as Lever Brothers and Procter and Gamble, are constantly attempting to line fill to create differentiation. Different methods of delivering detergent, such as tablets and gels, are ways of creating new products within a line.
Brand extension - extending an existing brand name within a product line. Confectionary manufacturers now use their premium chocolate brands to sell related products including drinks and ice creams. Customers can purchase Mars chocolate, ice creams and milkshakes.
Cadbury has extended its product line by producing new chocolate bars, such as 'Double Choc Dairy Milk'.
The product mix is the assortment of product lines that an organisation makes available to the customer. P&G not only produce laundry products, but also a significant variety of other lines including hair and beauty, baby care and pet nutrition products. The product mix is sometimes called the product portfolio.
The product mix can be described according to:
- Width - the number of different product lines on offer.
- Depth - the number of product items in each product line.
- Consistency - the closeness of relationships between different product lines.
Marketing managers will need to review the product mix periodically to ensure that the mix reflects the marketing objectives of the firm and that it has a coherence that can be recognised by the consumer. If a firm produces products that appear to have no common link or brand identity, consumers may be confused about what the firm represents in terms of quality and image.
Product mixes will develop over time in response to varying internal and external forces such as new technologies and competition. The mix may become messy and the firm may decide to reduce its product mix in number and coverage. Unilever, for instance, recently decided to reduce its number of brands from 1500 to 400 to allow it to concentrate its marketing activities on fewer high profile brands.
A product range describes the full list of available products made by any one firm, including every product and service offered by the firm within all of its product lines.