As shown in the fig each product item offered to customers can be viewed on three levels.
Therefore product planners need to think about products and services on three levels:

1). The core product is the core, problem solving benefits that consumers are really buying
when they obtain a product or service. It answers the question what is the buyer really buying?
2). The actual product may have as many as five characteristics that combine to deliver
core product benefits. They are:
a). Quality level.
b). Features.
c). Design.
d). Brand name.
e). Packaging.
3). The augmented

product includes any additional consumer services and benefits built around the core and actual products. Therefore, a product is more
than a simple set of tangible features. Consumers tend to see products as complex bundles of benefits that satisfy their needs. When
developing products, marketers must:

1). Identify the core consumer needs that the product will satisfy.

2). Design the actual product and finally

3). Find ways to augment the product in order to create the bundle of benefits that will best satisfy consumer’s desires for an experience. The product. For example, a Sony camcorder is an actual product. Its name, parts, styling, features, packaging, and other
attributes have all been combined carefully to deliver the core benefit—a convenient, high-quality
way to capture important moments. Sony must offer more than just a camcorder. It must provide
consumers with a complete solution to their picture-taking problems. Thus, when consumers buy a
Sony camcorder, Sony and its dealers also might give buyers a warranty on parts and workmanship,
instructions on how to use the camcorder, quick repair services when needed, and a toll-free
telephone number to call if they have problems or questions (augmented level).
Therefore, a product is more than a simple set of tangible features. Consumers tend to see
products as complex bundles of benefits that satisfy their needs. When developing products,
marketers first must identify the core consumer needs the product will satisfy. They must then
design the actual product and find ways to augment it in order to create the bundle of benefits that
will best satisfy consumers.

b) Product Classification

There are three basic types of product classifications. Durable products are used to over an
extended period of time. Nondurable products are more quickly consumed, usually in a single use
or a few usage occasions. 'Pure' Services are activities or benefits offered for sale which are
intangible, inseparable from the consumer, perishable in that they are experiential and do not result
in ownership of anything. Either consumer or industrial customers can buy each of these
products. Consumer products are sold to the final end-user for personal consumption.
Individuals and other organizations to use in their administrative or processing operations buy
business-to-business products. Industrial products are the most widely used of these products and
consist of consumables such as paper clips or raw materials that are converted to finished
products. Lets discuss these classifications in detail:

I. Consumer Products

Consumer products are those bought by final consumers for personal consumption. Marketers
usually classify these goods further based on how consumers go about buying them. Consumer
products include convenience products, shopping products, specialty products, and unsought products. These
products differ in the ways consumers buy them and therefore in how they are marketed

• Convenience products are consumer products and services that the customer
usually buys frequently, immediately, and with a minimum of comparison and
buying effort. Examples include soap, candy, newspapers, and fast food.
Convenience products are usually low priced, and marketers place them in many
locations to make them readily available when customers need them.

• Shopping products are less frequently purchased consumer products and services
that customers compare carefully on suitability, quality, price, and style. When
buying shopping products and services, consumers spend much time and effort in
gathering information and making comparisons. Examples include furniture,
clothing, used cars, major appliances, and hotel and motel services.

• Shopping products marketers usually distribute their products through fewer
outlets but provide deeper sales support to help customers in their comparison
efforts.

• Specialty products are consumer products and services with unique characteristics
or brand identification for which a significant group of buyers is willing to make a
special purchase effort. Examples include specific brands and types of cars, highpriced
photographic equipment, designer clothes, and the services of medical or
legal specialists. A Lamborghini automobile, for example, is a specialty product
because buyers are usually willing to travel great distances to buy one. Buyers
normally do not compare specialty products. They invest only the time needed to
reach dealers carrying the wanted products.

• Unsought products are consumer products that the consumer either does not
know about or knows about but does not normally think of buying. Most major
new innovations are unsought until the consumer becomes aware of them through
advertising. Classic examples of known but unsought products and services are life
insurance and blood donations to the Red Cross. By their very nature, unsought
products require a lot of advertising, personal selling, and other marketing efforts.

II. Industrial Products

Industrial products are those purchased for further processing or for use in conducting a business.
Thus, the distinction between a consumer product and an industrial product is based on the
purpose for which the product is bought. If a consumer buys a lawn mower for use around home,
the lawn mower is a consumer product. If the same consumer buys the same lawn mower for use
in a landscaping business, the lawn mower is an industrial product.
The three groups of industrial products and services include materials and parts, capital items, and
supplies and services. Materials and parts include raw materials and manufactured materials and
parts. Raw materials consist of farm products (wheat, cotton, livestock, fruits, vegetables) and
natural products (fish, lumber, crude petroleum, iron ore). Manufactured materials and parts
consist of component materials (iron, yarn, cement, wires) and component parts (small motors,
tires, castings). Most manufactured materials and parts are sold directly to industrial users. Price
and service are the major marketing factors; branding and advertising tend to be less important.
The demand for industrial products is derived from the demand for consumer products. This is
known as "derived demand." Capital items are industrial products that aid in the buyer's
production or operations, including installations and accessory equipment. Installations consist of
major purchases such as buildings (factories, offices) and fixed equipment (generators, drill presses,
large computer systems, elevators). Accessory equipment includes portable factory equipment and
tools (hand tools, lift trucks) and office equipment (fax machines, desks). They have a shorter life
than installations and simply aid in the production process.

The final group of business products is supplies and services. Supplies include operating supplies
(lubricants, coal, paper, pencils) and repair and maintenance items (paint, nails, brooms). Supplies
are the convenience products of the industrial field because they are usually purchased with a
minimum of effort or comparison. Business services include maintenance and repair services
(window cleaning, computer repair) and business advisory services (legal, management consulting,
advertising). Such services are usually supplied under contract.

III. Organizations, Persons, Places, and Ideas

In addition to tangible products and services, in recent years marketers have broadened the
concept of a product to include other "marketable entities” namely, organizations, persons, places,
and ideas. Organizations often carry out activities to "sell" the organization itself. Organization
marketing consists of activities undertaken to create, maintain, or change the attitudes and
behavior of target consumers towards an organization. Both profit and nonprofit organizations
practice organizational marketing. People can also be thought of as products. Person marketing
consists of activities undertaken to create, maintain, or change attitudes or behavior toward
particular people. All kinds of people and organizations practice person marketing. Ideas can also
be marketed. In one sense, all marketing is the marketing of an idea, whether it is the general idea
of brushing your teeth or the specific idea that Crest provides the most effective decay prevention.