I. Product Concept
Product refers to the factors and means that satisfy people’s needs and desires through exchange. It includes tangible and intangible products provided to the market that can meet certain needs and desires of consumers, including five levels of content:
(1) Core product refers to the basic utility and benefits of the product. For example: The basic utility of a refrigerator is refrigeration and preservation.
(2) Formal product refers to the form in which the core product is realized or the specific form of satisfaction of a certain demand of the target market. Specifically, it includes quality, style, characteristics, trademarks, and packaging.
(3) Expected product refers to a set of attributes and conditions closely related to the product that consumers expect to obtain when purchasing the product. For example: Bath centers should provide consumers with towels, soap, and shampoo.
(4) Extended product refers to the sum of various benefits that consumers obtain when purchasing formal products and expected products, including product instructions, quality assurance, installation, maintenance, delivery, and technical training.
(5) Potential product refers to the existing product, including all additional products, that may develop into the final product in the future.
II. Product portfolio concept
1. Basic concepts
(1) Product line: a group of products that are closely related in technology and structure and can meet the same needs. For example: a bicycle factory has two product lines, men’s bicycles and women’s bicycles.
(2) Product items: each specification of products listed on each product line. For example: the men’s bicycle series has three models of 24 inches, 26 inches, and 28 inches, and it has 3 product items.
(3) Product portfolio: the combination or structure of all product lines and product items provided by an enterprise to the market, or the business scope and structure of the enterprise. It includes 4 variables:
1) Product portfolio width: the number of product lines in the product portfolio.
2) Product portfolio depth: the number of product items contained in a product line.
3) Product portfolio length: the total number of product items in the product portfolio.
4) Product portfolio correlation: the degree to which each product line is related to each other in terms of end use, production conditions, distribution channels or other aspects.