Last updated: August 2024
A live concert, shampoo, a fitness app. These are all examples of products —even though their similarities are few. A product is any item or service you sell to serve a customer’s need or want. Products can be physical or virtual. Physical products include durable goods (such as cars, furniture, and computers) and nondurable goods (such as food and beverages). Virtual products offer services or experiences (such as education or digital media). A product can also be a hybrid of the two, like a kitchen appliance with its own mobile app.
Product categorization is not a static concept, but one that evolves with the times. For example, software can be considered both a product and a service. Previously, software was purchased and installed on your computer using a physical medium (like a CD — remember those?). But most software today is delivered virtually through a subscription model. This is known as software as a service (SaaS).
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This evolution is part of what makes product development so exciting: Endless possibilities exist to create new offerings for all kinds of customers. But it helps to begin with a solid understanding of what makes up a product, which products exist today, and the essential role customer experience will always play. That is where this guide comes in.
Feel free to jump ahead to any section here:
Product characteristics
Types of products
Understanding the Complete Product Experience (CPE)
How to launch a new product
Product management resources
Characteristics of a product
Size, shape, performance, price, and functionality — these are just a handful of attributes customers might consider before purchasing your product. Product characteristics vary depending on the product type, industry standards, and consumer preferences. Businesses often prioritize a product's attributes based on their target markets and competitive landscapes.
Though product characteristics vary widely, a few basic ones are universal. A product is:
Intended for customers: This differentiates products from projects or anything else you might produce for your own use or enjoyment. Products are typically created to be sold and consumed by someone else, whether that is an individual consumer or a business.
Created to provide benefits to a market: Identifying and meeting a market need can be challenging. But at a base level, a product should provide some advantage to users.
Exchanged for value: The most typical value exchange is money — meaning products have a price and can be bought and sold. In some cases, products are offered in exchange for feedback, exposure, trade, or other forms of value.
In addition to basic characteristics, each product has desirable attributes from the customer's point of view. Common examples include:
Quality: Superiority of the product
Durability: Ability to withstand wear and tear
Functionality: How well it performs an intended purpose
Reliability: Consistency in performance and dependability over time
Design: Aesthetics, style, visual appeal
Usability: Ease of use/user friendliness
Safety: No risk or hazards from using the product
Compatibility: Ability to work with other products
Customers also consider other attributes (such as size, material, and packaging), especially when it comes to physical products. For larger-ticket product offerings — such as a car, laptop, or software suite — things like brand, price, warranty, customization, and customer support also factor into a customer's purchasing decisions.
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Types of products
You can classify products in ways beyond physical, virtual, and hybrid. Many products are split among three major customer categories: consumer, business, and industry. Consumer products are designed for individual and personal use, business products are used by businesses in their operations or production, and industry products are customized to meet the needs of a specific vertical (healthcare, for instance).
Understanding the differences among all three categories is key for product managers. It helps you craft better market strategies, design user-friendly products, choose the proper sales channels, and comply with regulations. Plus, it can guide your career path and help you specialize and advance.
Let's explore these differences in greater detail.
Consumer products
Consumer products, or business-to-consumer (B2C) products, are sold to end users and intended for personal use. The B2C product category is commonly broken down further by purchasing behavior, as different characteristics can influence how customers buy products. The table below explains the four major consumer product types by purchasing behavior:
Purchasing behavior | Description |
Convenience | Convenience products are purchased frequently and with little planning or effort. They are widely available, easy to obtain, and typically have a low price. Examples: Magazines, on-demand software and services |
Shopping | Shopping products are purchased less frequently than convenience products and have a higher price. Buyers compare attributes such as quality, style, and price before making a purchasing decision. Examples: Clothing brands, airline tickets |
Specialty | Specialty or niche products have features that appeal to a specific group of customers. This type of product requires more targeted promotion to reach the right people. Examples: Vertical market software for real estate or banking applications |
Unsought | Unsought products have little awareness or proactive demand among customers. Because customers do not perceive an immediate need for these products, the benefits must be directly promoted to generate interest. Examples: Life insurance, reference books |
Business products
Business products, or business-to-business (B2B) products, help other companies create their own products or operate their businesses. They can also be referred to as horizontal market products, as they are present in multiple industries and support a wide range of business needs. Business products include raw materials, equipment, supplies, business services, and software.
Business software (SaaS) is a major subcategory of B2B products. Examples include accounting, customer relationship management, human resource management, and product development software. These applications can be further categorized by the size of the company that uses them (for example, enterprise software).
The table below outlines purchasing behaviors that typically matter to B2B customers:
Purchasing behavior | Description |
Try before you buy | B2B customers often prefer to test products or services before making a purchase decision. Offering free trials, demos, or samples allows them to assess functionality and compatibility with their business needs. Example: An enterprise company starts a free trial of Aha! Roadmaps product management software. |
Customer reviews and testimonials | Feedback from other businesses or professionals who have firsthand experience with the product or service is valuable. Positive reviews and testimonials build credibility and trust, influencing purchasing decisions and perceptions of value. Example: A law firm considers purchasing legal research software based on positive reviews praising its comprehensive database and reliable customer support. |
Return policies and guarantees | B2B customers appreciate suppliers that offer flexible return policies, warranties, or guarantees to mitigate risks associated with purchasing products or services. This encourages confidence and reduces uncertainty during the buying process. Example: A technology hardware supplier offers a hassle-free return policy for defective components. |
Personalized sales | Understanding a customer's business context and offering customized solutions or recommendations enhances engagement and builds rapport with potential buyers. Example: A healthcare organization receives a product demonstration from a medical equipment supplier that addresses industry- and organization-specific challenges. |
Transparent pricing and contracts | Clear and straightforward pricing structures, along with transparent contract terms, foster trust and credibility —reducing the likelihood of misunderstandings or disputes later on. Example: An organization works with a vendor that provides detailed pricing breakdowns, service-level agreements, and transparent billing practices. |
Industry products
Industry products, or vertical market products, are specialized solutions designed to meet the needs of specific business sectors rather than catering to a large variety of use cases. These products are tailored to industry-specific requirements, regulations, and standards. They often include specialized features and integrations to optimize operations, boost efficiency, and ensure compliance.
Examples include:
Energy: Supervisory control and data acquisition systems monitor and control energy production and distribution.
Healthcare: Electronic health records systems streamline patient data management and ensure regulatory compliance.
Financial services: Risk management software helps financial institutions adhere to regulatory standards and manage financial risk.
Information technology: Network security solutions protect against industry-specific threats and ensure data compliance.
Developing industry products requires domain expertise, collaboration with industry stakeholders, and a keen understanding of emerging trends and challenges. Companies that specialize in vertical markets often invest heavily in research and development to stay ahead of the curve and address evolving industry needs.
Related:
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Understanding the Complete Product Experience (CPE)
Definitionally, a product is considered an item or service to sell. But it is much more than that in reality. A product encompasses customers' entire experience with your company — from the moment they recognize a need to the tools your team uses to support them. Aha! co-founder and CEO Brian de Haaff defines this concept as the Complete Product Experience (CPE) in Lovability, his 2017 book.
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Placing the CPE at the center of your product development process serves as a forcing function: It requires you to consider every touchpoint customers encounter as they use your offering and work with your team. This mindset will show your customers how much you care about their needs and wants — shifting your product from likable to downright lovable.
So, what other kinds of interactions influence people's experiences? The graphic below illustrates the key touchpoints your company has with its customers. Together, they form the Complete Product Experience.
Marketing: How potential customers find and evaluate your product, including through social media, reviews, and content
Sales: When prospects learn about the product from representatives and trials to determine whether it suits their needs
Technology: The core features customers pay for (such as software or physical items)
Supporting systems: Internal systems (such as billing and analytics) that enhance customer satisfaction
Third-party integrations: Ensure the product fits into the customer's life by working seamlessly with other tools.
Support: Activities that help customers achieve something meaningful with the product — from answering questions to in-person training
Policies: Rules that guide business operations, providing a framework for employees to be their best
Ultimately, your product is the summation of all touchpoints that form a relationship between your company and the customer. Creating a seamless experience requires having product, marketing, sales, and support teams work together to optimize each step of the customer's journey and create lasting joy.
Related:
What is the Complete Product Experience?
What is customer experience?
7 components of your complete product experience
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How to launch a new product
Product launches are exciting. This is the moment you have been working toward — and seeing everything finally come to fruition is a rewarding experience for the whole team.
But there is more to a product launch than you might think. Planning and delivering a new product (or even a new feature for an existing product) is complex. The launch is only one piece of the entire product development process: a massive body of work encompassing everything it takes to bring a new product to life. This includes the "active" building and launch activities as well as behind-the-scenes strategizing, planning, and analysis.
Different organizations identify different phases when it comes to developing a new product. We categorize product development into nine stages (and the launch stage is one of them). The graphic below illustrates the nine stages within a product development framework. This flowchart can be a helpful reference for folks, especially as you introduce the different phases of product development to your team.
For the sake of this guide, let's assume you have already completed the first seven stages and are gearing up for the actual launch. At this stage, you need to consider all the cross-functional activities required to support the launch —from marketing and promotions to customer support.
Here are some tips to get you on the right track.
Develop a product launch plan or a document that captures all the work you must complete to release the product to market. This is a comprehensive checklist that includes everything from design and positioning to marketing campaigns, training, and support. The beauty of a checklist? Once compiled, it can serve as a repeatable process for all future releases.
Build a go-to-market roadmap. Developed in close partnership with product marketing, a go-to-market roadmap visualizes all the work you want to accomplish for your launch and a timeline for completion. Use it to track details and dependencies across teams, deal with potential issues before they happen, and keep everyone in the know.
Focus on stakeholder alignment: Make sure all launch activities are visible to cross-functional teams and other stakeholders. Keep communication lines open through regular planning meetings, and use your go-to-market roadmap as a consistent touchpoint to help everyone stay aligned and in sync.
Publish an external product knowledge base. A knowledge base provides self-serve support documentation for customers. Beyond answering how to do something in your product, an excellent knowledge base functions as a great learning source for your users.
Develop an internal product wiki. This should include any documentation the cross-functional product team and other stakeholders need access to so they can plan, build, and deliver your product.
Use Aha! Roadmaps to create go-to-market roadmaps similar to this one.
Remember that a product launch is not a one-day event or even something that gets wrapped up in a week or two. Like any other stage in product development, it requires extensive preparation, planning, and team collaboration to deliver something valuable to market.
Additional resources:
How to test your product before launch
How to plan a marketing launch
Marketing calendar template
Product launch plan template
A better way to manage product launches
Secrets to a winning launch plan
Marketing strategy vs. go-to-market strategy
Pragmatic Institute: Where does product management belong in the organization?
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Product management resources
One guide can only do so much. If you want to go beyond the product basics, use these links and templates to get started.
Foundational concepts
What is the product development process?
What is product management?
What is a product portfolio?
What is the product lifecycle?
Product building
What is product development software?
Introduction to product plans
How to set product goals
How to set product initiatives
How to position your product
How to prioritize product ideas
A roadmapping guide for product teams
How to build a brilliant roadmap
How to adopt the Aha! Framework for product development
Career growth
What is the role of a product manager?
What are the types of product managers?
How to become a product manager
How to prepare for a product manager interview
Helpful templates
Product vision template
SWOT analysis template
Value proposition template
Competitive analysis template
Brainstorming session template
Product roadmap template
Strategic roadmap template
Product manager resume
FAQs about products
What are examples of products? A smartphone, a cup of coffee, a certification class, and a fitness app are all examples of products. Almost anything a business sells — whether physical or virtual — qualifies as a product. But it is important to remember that products represent the entire experience that customers share with your company, not just the item or service itself. Read more about the Complete Product Experience.
What are product roles? Behind every great product is a great team. The core product development team typically includes roles from six different functions: innovation, product management, project management, product marketing, engineering, and operations. Individual roles and job titles will vary within these groups. Read more about product roles.
What tools can you use to manage products? Product development teams use a wide range of tools to manage products — from ideas portals to roadmapping software and agile development tools. Since building products is such a complex process, it is common to have a full product tech stack or software suite. Read more about product development software.
