All about products: Meaning and significance
Hearing the word ‘product’, we often think of a tangible item that can be bought for a price. However, despite how simple it sounds, a product has various types and undergoes various stages. Let us explore!
image for illustrative purpose
When we think of a product, the first thing that comes to our mind is a tangible item that can be purchased against a price. However, in reality, apart from being a tangible good, a product can also be an intangible service. Simply put, it is anything and everything that can be offered in the market to meet a demand.
When it comes to the cost of the product, there are various factors that influence its price. Market scenarios, development and distribution, demand and supply, and targetted segment, all play a vital role in cost setting.
Important features of a product
Relevant to the market: It is important for a product to possess market relevancy. Catering to the consumer's demand and effectively providing the solution for it is what makes the product a ‘hit’.
Must speak for itself: The product must communicate its purpose to consumers. It should convey the 'why' and 'what' behind its development and the difference it will make to people's lives.
Flexible in nature: A product should be flexible in nature. It should evolve along with trends and change as per demands in order to uphold its significance.
Kinds of product
Consumer products: Consumer products are the ones that are meant for the ultimate consumption of the end consumer. The idea behind these products is to cater to the personal needs and desires of the public. They are further classified into:
a) Convenience products: These products have consistent and continuous demand and can be purchased with little effort. For example, medicines, toiletries, newspapers, and so on.
b) Shopping products: When it comes to shopping products, consumers invest a significant amount of time and effort purchasing these goods. They tend to compare the elements of different products in order to find the most suitable one. Examples of these products include electronics, furniture, jewellery, etc.
c) Specialty products: The purchase of these products demands substantial effort. Unlike regular consumer goods, specialty goods are often highly-priced and have limited demand. For example, artwork, paintings, sculptures etc.
Industrial products: Industrial products are intended for business use rather than personal consumption. Given they are not consumer goods, the demand for these products is often limited. Some examples of industrial products are raw materials, machines, tools, etc.
Product life cycle
Each product has a life cycle, which represents the stages it goes through, starting from product introduction to decline.
Introduction → growth → maturity → decline
Introduction: This phase of the product life cycle is one where the product is introduced in the market. Here, the demand is limited and the primary focus is to increase product awareness via promotion and advertising.
Growth: During the growth phase, the product becomes renowned and sales reach heights. Now the marketing and promotion efforts shift focus on building brand recognition and image. This ultimately leads to increased sales and higher revenue.
Maturity: Referred to as the most profitable stage, this phase is where the costs of production and marketing comes down. Competition tends to increase due to market saturation of the product, and profit margins begin to decline. This marks a crucial time for businesses to innovate and think of unique ways to capture market attention.
Decline: Finally, the product enters the decline phase, where the sales decrease due to market saturation and competition from alternative products. It is vital for the business to plan a revamp or introduce a next-gen product to restart the product life cycle and regain the interest of consumers.
