MSME Product Development Basics: What are Products?

We often think of products as tangible items such as toothpaste, candies or computers but a product can also be a service such as hairstyling, massages or plumbing services or even ideas and events such as what a wedding planner offers or when a marathon is set up.  A product is much broader than what it appears to be – and understanding the true nature of a product can lead tovaluable insights about what would make consumers buy.


  • A restaurant is not just selling food. It is offering a dining experience, including the quality of service, the ambiance of the place and the level of comfort it provides.
  • Donuts are not just snacks. They can be gift items or “pasalubong” that tell your family that you think about them even on regular days.
  • Having a gym membership may not be so much about exercising but rather about communicating to oneself and to others that one is interested in self-improvement and wellness.


The common denominator in the above three examples is that “product” refers to much more than just a physical object or a service. You don’t just evaluate a restaurant based on the quality of its food – although that is a big part of it.  Your experience is also enhanced by how well you are treated by the food servers, how fast the food is served, the lighting, the decors, the music and so much more.


Even a donut, when viewed as a product, can be far more complex than simply the sugary treat that it is.  Do you buy it from a food kiosk?  Is it served to you hot on a plate in a diner?  If you take it out, does it come with beautiful packaging that makes it look like a gift, or is it simply handed to you in a thin plastic or paper bag?


Successful entrepreneurs know that products are more than just physical goods or services. A product is an experience.


For example:


Yellow Cab Pizza Co. uses expensive Vespa scooters for its fleet of delivery vehicles.   It could have cut on its initial capitalization costs by simply choosing far cheaper scooters — some costing just a third of the price — but doing so would have diluted the experience that consumers will get upon seeing a classic Italian scooter rolling up their driveways to deliver their pizza!


A product therefore is not just a tangible item, but rather the set of tangibles and intangibles that make up the customer’s total experience. The product itself need not even be something that is literally or directly sold to consumers.


(Excerpted from Product Development for Micro Enterprises by Arturo Ilano, an upcoming publication by SERDEF.)


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