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In general, a product is defined as a "thing produced by labor or effort" or the "result of an act or a process. " The word "product" stems from the verb "produce", from the Latin prōdūce(re) "(to) lead or bring forth. " Since 1575, the word "product" has referred to anything produced.
In marketing, a product is anything that can be offered to a market that might satisfy a want or need. In retail, products are called merchandise. In manufacturing, products are purchased as raw materials and sold as finished goods. Commodities are usually raw materials such as metals and agricultural products, but the term can also refer to anything widely available in the open market. In project management, products are the formal definition of the project deliverables that form the objectives of the project.
Goods, Services, or Ideas
Goods are a physical product capable of being delivered to a purchaser and involve the transfer of ownership from seller to customer.
A service is a non-material action resulting in a measurable change of state for the purchaser caused by the provider.
Ideas (intellectual property) are any creation of the intellect that has commercial value, but is sold or traded only as an idea, and not as a resulting service or good. This includes copyrighted property such as literary or artistic works, and ideational property, such as patents, appellations of origin, business methods, and industrial processes.
Product Classification: Tangible or Intangible
A product can be classified as tangible or intangible.
A tangible product is a physical object that can be perceived by touch such as a building, vehicle, or gadget. Most goods are tangible products. For example, a soccer ball is a tangible product .
An intangible product is a product that can only be perceived indirectly such as an insurance policy. Intangible data products can further be classified into virtual digital goods ("VDG"), which are virtually located on a computer OS and accessible to users as conventional file types, such as JPG and MP3 files. Virtual digital goods require further application processing or transformational work by programmers, so their use may be subject to license and or rights of digital transfer. On the other hand, real digital goods ("RDG") may exist within the presentational elements of a data program independent of a conventional file type. Real digital goods are commonly viewed as 3-D objects or presentational items subject to user control or virtual transfer within the same visual media program platform. Services or ideas are intangible.
Product Classification: By Use or By Association
In its online product catalog, retailer Sears, Roebuck and Company divides its products into "departments", then presents products to potential shoppers according to function or brand. Each product has a Sears item-number and a manufacturer's model-number. Sears uses the departments and product groupings with the intention of helping customers browse products by function or brand within a traditional department-store structure.
A product line is "a group of products that are closely related, either because they function in a similar manner, are sold to the same customer groups, are marketed through the same types of outlets, or fall within given price ranges. " Many businesses offer a range of product lines which may be unique to a single organization or may be common across the company's industry. In 2002 the US Census compiled revenue figures for the finance and insurance industry by various product lines such as "accident, health and medical insurance premiums" and "income from secured consumer loans. " Within the insurance industry, product lines are indicated by the type of risk coverage, such as auto insurance, commercial insurance, and life insurance.