Sep 168 min read

Product Definition | What is a Product and how to spot products in your organization?

What is a Product? | TL;DR

Looking at what is happening in different organizations, we saw that the term “product” is tossed around with such ease that its true essence is getting lost. However understanding how your organization defines a product and what products your business is focused on is the foundation for success and satisfied users and customers.

We will embark on a journey to explore the various definitions put forth by marketing giants, unveil their common ground and share some questions that should help you in thinking about what products you have in your organization and our takeaways with our own product definition, which you might like or not.

If you are too lazy or don’t have enough time to read through it all here you can find the essence and outcome of this article

A product is a user-facing offering created by an organization to solve a specific user need or problem with the following key characteristics:

User Focus: It prioritizes solving a specific user need or addressing a well-defined user segment.
Distinct Identity: It possesses a distinct identity and value proposition, perceived by users as a separate entity within an organization’s offerings.
Lifecycle Management: It goes through a lifecycle with phases of development, growth, maturity, and potential decline. Dedicated product ownership and management ensure focused development and improvement throughout this lifecycle.
Continuous Improvement: It undergoes ongoing development and adaptation based on user feedback and market trends. Iteration and responsiveness are crucial for product success.
Market Orientation: It’s actively marketed or promoted as a distinct offering targeted at a specific user base. It contributes to the overall value proposition of the organization, even if not all products directly generate revenue.
Standalone Value: While products can have dependencies, a core product should offer standalone value to users. Features within a larger product wouldn’t be considered independent on their own.
User Perception: Users should perceive the product as a distinct offering with a unique value proposition. User research and feedback can help gauge this perception.

Unveiling the Definitions

Why do we need a Product definition?

The current trend focusing on product development, especially within the digital landscape, is increasing and having a big effect on how companies organize themselves and shape their ways of working. Often this is done around a product, product group, or product part, without really understanding if those are really products and if it is at all beneficial.

A clear definition of a product offers several advantages for organizations, here just a few:

Alignment and Efficiency: Without a unified understanding of what constitutes a product, different stakeholders, employees and teams might have conflicting views. This can lead to misaligned efforts, inefficient resource allocation, and missed opportunities. For instance, a marketing team might promote a feature as a standalone product, while the product development team views it as a component of a larger offering. A clear definition helps bridge these gaps.
Customer Focus: If internal teams lack a unified perspective on what products solve, they might struggle to effectively communicate value to customers. A clear definition ensures everyone is on the same page about the core purpose and value proposition of each offering, leading to a more customer-centric approach.

The Pitfalls of a Blurry Product Definition:

Imagine a company developing a new mobile fitness app. The marketing team enthusiastically promotes it as a revolutionary workout companion, while the development team views it as a data collection tool for future monetization efforts. This conflicting perception, stemming from a lack of clear product definition, can lead to:

Confused Messaging: Inconsistent messaging across departments creates a confusing picture for customers. They might struggle to understand the app’s true purpose and value proposition.
Misaligned Features: Development priorities might not align with user needs. The app might be overloaded with data collection features that users don’t find valuable, neglecting core functionalities crucial for a great workout experience.
Missed Opportunities: The company might miss out on valuable user feedback by focusing on internal goals unrelated to the app’s core purpose as a fitness companion.

A clear product definition acts as a guiding light, ensuring everyone within the organization is working towards the same objective: creating a product that solves a user need and delivers value.

What Definitions exist in Literature?

If you start researching a bit, you will find the following definitions around what a product is:

Kotler is a highly influential marketing scholar known as the Father of Modern Marketing. His definition is: “A product is any offering that can satisfy a need or want, such as one of the 10 basic offerings of goods, services, experiences, events, persons, places, properties, organizations, information, and ideas.”
William J. Stanton was a marketing professor and author known for his books on sales force management and marketing fundamentals. Stanton, another prominent figure in marketing, defines a product as “a bundle of utilities that satisfies consumer needs or wants.” This definition emphasizes the functional aspect of a product, focusing on its ability to provide utility or value to the consumer.
Theodore C. Levitt: A pioneer of marketing thinking and scholar known for his “marketing myopia” concept, Levitt broadly defines a product as “the entire complex of tangible and intangible things offered to a market by a seller.” This definition encompasses not just the core offering but also the accompanying features, services, and experiences that contribute to the overall customer experience.

While the above definitions may seem distinct at first glance, a closer examination reveals a common thread: products exist to fulfill customer needs and wants. Kotler’s extensive list emphasizes the diverse ways this need fulfillment can occur, while Stanton underlines the utility aspect, and Levitt highlights the holistic customer experience.

To summarize we can agree upon a first definition: a product is anything that fulfills a customer need or want. It can encompass tangible or intangible goods, services, or a combination of both, along with the associated features, functionalities, and experiences that contribute to its overall value proposition.

This first definition is pretty broad and it won’t help us really with starting a conversation on which product we have in our organization as almost everything falls into this definition. So how can we narrow it down?

One Approach To Spot Your Products

In this section we will try to build a small guide that should help you in creating a common understanding within your organization around what a product is. The first step is to narrow down the definition.

The following questions should help you to identify which products your organization has. Obviously this questions are only a start and you will need to explore more to understand the product definition within your organization.

Narrow down your Product Definition

To narrow down your product definition, we need to ask ourselves a couple of questions. For this we will use Google as our company, where we want to spot which products we have.

The Questions

Applying the Questions to Google Products

Let’s use the seven questions we defined to analyze some examples within Google, differentiating between products and non-products:

1. Does your organization create it to provide it to users and customers?

This question helps differentiate between internal tools and user-facing products. While internal tools like employee time tracking software might be crucial for Google’s operations, they wouldn’t be considered products in this context.

2. Does it have a Lifecycle (Introduction, Growth, Maturity, Decline)?

Products evolve over time, going through stages of introduction, growth, maturity, and decline. Google products like Gmail or Search perfectly illustrate this lifecycle.

3. Is the core purpose of it to solve a users and customers problem or need?

At its heart, every successful product addresses a user need. Google Drive offers accessible storage, Gmail facilitates communication, and Search helps users find information – all addressing fundamental user needs.

4. Will it be constantly improved or adapted until it’s end of Lifecycle?

Ongoing improvement is characteristic of most successful products. Google products are continuously updated with new features and functionalities based on user feedback and market trends.

5. Does it contribute to the overall value proposition of the organization?

While not all products directly generate revenue (like Google Search, which is primarily ad-supported), they contribute to the organization’s value capture strategy. Google Search attracts users to the platform, ultimately leading to engagement with other revenue-generating products like Google Ads or cloud services.

6. Can it function independently or is it heavily reliant on other offerings within the organization?

While products can have dependencies, a core product should offer standalone value. Features within a larger product wouldn’t be considered independent on their own. For instance, Google Docs’ spell check feature is valuable, but it wouldn’t be offered as a separate product to users. It relies on the functionalities of the entire Google Docs application.

7. Is it perceived by your users and customers as a product that your company offers?

Users clearly perceive Google’s core offerings (Search, Gmail, Drive, etc.) as distinct products. These products offer specific functionalities and cater to specific user needs.

Examples of Non-Products

By applying these questions, we can differentiate between internal tools, features within a broader product, and standalone user-facing products with their own lifecycle and value proposition. Here are some examples of what wouldn’t be considered products according to our definition:

Internal Tools: While crucial for operations, tools like employee time tracking software or internal communication platforms are not user-facing offerings and wouldn’t be considered products that your organization creates, improves etc. Imagine using slack within your company, this is per se a product made by slack, however for your organization it’s an internal tool to support operations within your company.
Features within a Product: Individual features within a larger product wouldn’t be considered standalone products. For instance, Google Docs’ spell check feature is valuable, but it wouldn’t be offered as a separate product to users.
Marketing Campaigns: Marketing campaigns are designed to raise awareness and promote existing products, not to solve user needs on their own.

Building on our initial definition and the filtering questions, we can refine our understanding of a product within the context of an organization:

A product is a user-facing offering created by an organization to solve a specific user need or problem with the following key characteristics:

User Focus: It prioritizes solving a specific user need or addressing a well-defined user segment.
Distinct Identity: It possesses a distinct identity and value proposition, perceived by users as a separate entity within an organization’s offerings.
Lifecycle Management: It goes through a lifecycle with phases of development, growth, maturity, and potential decline. Dedicated product ownership and management ensure focused development and improvement throughout this lifecycle.
Continuous Improvement: It undergoes ongoing development and adaptation based on user feedback and market trends. Iteration and responsiveness are crucial for product success.
Market Orientation: It’s actively marketed or promoted as a distinct offering targeted at a specific user base. It contributes to the overall value proposition of the organization, even if not all products directly generate revenue.
Standalone Value: While products can have dependencies, a core product should offer standalone value to users. Features within a larger product wouldn’t be considered independent on their own.
User Perception: Users should perceive the product as a distinct offering with a unique value proposition. User research and feedback can help gauge this perception.

This definition emphasizes the user-centric nature of products and the importance of a strategic approach to their development and management. It goes beyond simply offering something to the market but focuses on creating value for users while aligning with the organization’s goals.

It allows for a clearer understanding of products within an organization. It helps differentiate between internal tools, features, and standalone user-facing products that can be strategically managed for optimal success.

TheRevolutionaryMind