Ask anyone this question, and their answers will be different,
but they’ll all probably describe it as a physical item / tangible item you
find in a physical store or online. But in reality, the word product refers to
a much broader range of goods and services specially in today’s hi-tech world.
We can define a product in the following manner: Anything that is created / manufactured which addresses a user problem or need is called a product
When you view a product through this broad lens, you will see why it can include many new things we never included in the definition of a product. We will look at some interesting examples below, and discuss why it’s important for Product Managers (PMs) to understand the product they’re building.
A product can be categorized as follows:
When we try to imagine a generic “product,” many of us will think about some products which are tangible in nature, things which we can hold, touch and feel. Examples Car, Shoes, Clothes, Mobile Phone.
In today’s world many products can be digital in nature also. They can take the form of a service. A few examples:
Another interesting example would be home security packages. These include several different categories of product in a single solution:
Physical (for example, a Ring doorbell camera)
Digital (the recording and online storage of your camera feed)
Ongoing service (Ring automatically connecting your service to local police)
A product can be an input to another product: Think of the mobile phone. Touchscreen, Battery, buttons, speakers and many other electronic items are integrated together to build that one single phone
To the end buyer, the mobile phone itself is the product. But to the mobile phone manufacturer, each of the above item is a product and probably a different vendor for each of this product (sub-products).
You can also think of it this way. In many cases, a B2B (business to business) product serves as an input in what will become a B2C product.
Here is one more example. McDonalds buys large quantities of products from B2B companies, including:
But McDonalds is a B2C company, selling to end-user consumers. For those consumers, the products above are simply inputs in the final product sold to them. A Burger with French Fries and Coke
Add On Item as the real product: The inkjet printer is a great example of this type of product. Few years ago, many manufacturers began selling their printers at very low prices or even free in some cases. The catch over here was that after continuous usage of the printer, they would run out of ink. On selling the ink, company charges heavily and disproportionately. What the thought of a product (in this case Printer) was just a marketing tool, a way to enter into the lives of the consumer to make money by selling ink cat cartridges.
A Product can even be… YOU...As mentioned by Forbes, “If you’re not paying for it, then you are the product.”. Now this is very true in the case of the various social media apps out there today, like Facebook, Instagram, LinkedIn, to name a few.
These major social media giants don’t charge a penny from the consumer to use their platforms. Is the platform a product? Think again, you didn’t buy the platform, you are just using it for free. Then how are these social media companies making money, what are they selling?
The answer is that they are selling YOU, in other words they are selling your attention which they capture on their site. They sell this huge gamut of data and insights which they generated from your usage, to advertisers and marketing companies.
It’s not always very clear what product a business is selling. For a business to be successful, the Product Manager needs to have a thorough understanding of the value proposition of the product and the actual buyer for that product.
Ramandeep Singh Bakshi
Product Management Specialist