Product

Product is everything that a marketing organization offers to potential customers as viewed from the perspective of the organization. Product is often viewed as the first or most important of the 4 P's (controllable variables of the [Page 448]marketing mix) ahead of price, place, and promotion in the decision-making hierarchy. Product includes tangible things (goods) and intangible things (services), as well as ideas, opinions, or suggested actions about activities, causes, people, places, and even the organization itself. Some organizations prefer to think of their product as their offering to potential consumers and, therefore, use the word offering instead of product in their conceptual models and in-house communications. Success in an organization's product strategy and product design seems to occur when the organization is focused on the benefits customers receive when they acquire, use, or consume the product, not when the organization is focused on the features of the product.

A product has some value for what it inherently contains (an automobile is an assemblage of steel, rubber, plastic, and so on), but more important, the value comes from the function it performs (an automobile provides transportation) and the expectations created about its nonfunctional aspects (an automobile can secure the admiration of others). Charles Revson of Revlon Cosmetics is reputed to have said, “In the factory we manufacture lipstick; in the store we sell hope,” clearly suggesting that the value lay in the benefits expected by the purchaser/user, not in the physical components.

Professor Philip Kotler has made distinctions about various components of product that he calls the levels of the product—the core product, the actual product, and the augmented product. The core product level consists of the problem-solving aspects or the benefits the product provides (what it does). The actual product level includes elements of the product such as its design, brand, packaging, features, and quality level (how it does what it does). The augmented product level contains things that enhance the product's benefits and value to the user such as easy-to-understand instructions, warranty, delivery, installation, and after-sale service (that makes it more valuable).

Most organizations produce a number of products (see the entry for Product Classes) that may or may not be related to each other (see Product Mix) and pursue long-run success through a number of strategies involving the nature and direction of the growth of their collection of products (see Product Line Extension).