The Importance of Defining Your Product

What is Your Product or Service

A bottle of Coca-Cola, the Internet, a haircut, a cup of coffee, a General Motors car, an IBM computer, Corel WordPerfect, a taxi ride, a Garth Brooks concert, and a daycare are all considered products.

A product is something that can be offered in an attempt to satisfy a want, need, interest, or desire. When the term "PRODUCT" is used, it generally refers to physical objects, services, persons, places, organizations and ideas.

Many people define their product as a physical state, however, products are actually made up of three items. The core product, the actual product, and the augmented product. These three items are described below.


The Core Product represents the "need" of consumers. In other words, the core product is the benefit(s) a consumer receives when purchasing a product. Theodore Levitt pointed out that buyers "do not buy quarter-inch drills; they buy quarter-inch holes." You must determine the needs hiding behind your product, and sell the benefits, not the features.

For example, don't sell the steak, sell the sizzle. In other words, what will you customers really buy or what benefit will your customers receive when purchasing your product. Below illustrates examples of the core product.

  • An individual buying a Cadillac is really buying luxury/comfort
  • An individual buying a fuel efficient car is really buying economy
  • An individual buying a bed is buying rest or sleep
  • An individual buying a vacation is really buying relaxation
  • An individual buying a book is generally buying knowledge
  • An individual buying products from a 7 11 store is buying convenience
  • An individual buying a stereo is really buying sound
  • An individual buying a fax machine is really buying communications
  • An individual buying a fitness product is really buying health.


The Actual Product is the physical result of the core product. Actual products may have as many as five characteristics: a quality level, features, styling, a brand name and packaging. Can you define your actual product in terms of these five characteristics?


The Augmented Product represents additional services and benefits associated with the actual product. For example, IBM's major success was due, in part, to its augmentation of the actual product - the computer. While competitors focused much of their attention on selling hardware to buyers, IBM discovered that customers required more sophisticated software and after sale services. Therefore, IBM sold a system, not just a computer (in the form of hardware, software and after-sale services). Now we see more and more computer companies providing augmenting products of their actual product.

Examples of augmented products may include such services as after sale service, warranties, installation, delivery, credit terms, speedy repairs, etc....

By understanding and defining the three items that form your product, you can better satisfy consumer needs as well as your business needs.

Important Questions Relating to Your Products and Services:

  • What is your actual product or service? Include quality, discounts, packaging, etc.
  • What benefit (s) will you provide your customers with by selling them your product? In other words, what benefits will your product provide to customers?
  • Will you provide additional services to your customers (IE Augmented Product)? If so, list these additional services. Will these services better satisfy your customer? Such services include, but not limited to, installation, delivery, warranties, guarantees, after sale services, extended credit terms, etc.....


Categories: Marketing