What Are Products and Solutions? (With Characteristics)
By Indeed Editorial Team
Published November 7, 2022
The Indeed Editorial Team comprises a diverse and talented team of writers, researchers and subject matter experts equipped with Indeed's data and insights to deliver useful tips to help guide your career journey.
Companies create products to satisfy the demands of their customers, which requires a deep understanding of their customers' needs. These products usually offer a solution to an existing problem by providing an innovative way to address it. Learning more about products and the potential solutions they can offer may help you better understand how to market a new good or service. In this article, we discuss what products and solutions are, outline their characteristics and their differences, and discuss the importance of understanding these concepts.
What are products and solutions?
Products and solutions refer to the tangible and intangible items and services companies create as a new way to solve a problem and meet their customers' demands. To develop a product, companies might first understand what problem the product aims to solve and how customers can understand that the product offers a solution to that specific problem. It's important then for companies to create products based on functionality, design, usability, and the overall user experience.
There are different categories of products, including convenience, specialty, shopping, and unsought goods. You can only consider a product as a solution when it effectively fulfills a customer's demand or requirement.
Characteristics of a product
Products possess characteristics that make it easy for consumers to recognize them and determine their purpose. These features also aim to appeal to the company's customers and encourage them to make a purchase. Regardless of the industry and their type, products share similar features, such as:
Products come with a unique name to ease identification. This is typically part of their trademark, which means another product can't use the same name. Product names can influence a company's marketing strategy and affect the overall impact of a brand on consumers. A product's name can affect its market appeal, brand potential, and visibility.
Products often have a distinct price that the company or retailer set. This is usually visible on the company's website or on a price tag. The price of a product depends on several factors, including its material composition, manufacturing process and costs, availability, selling location, and market demand.
Companies typically document the core functionality of their product and describe its features, uses, and benefits. You can usually find this information on the website of company or product, in the product's manual, or on the packaging. Product documentation enables users to understand how to use the product and employ it to solve a problem.
This comprises a product's colours, packaging, and manufacturing material. While a product's design typically refers to its outward appearance, it may also describe how customers can use it. Both elements combined can differentiate a product from those designed by other companies.
Products can also be repeatable, which means the manufacturer can produce large quantities of the same item. This characteristic can make the product available to several customers simultaneously. For instance, computer applications are products that people can regularly download and use.
Well-defined usage requirements enable customers to understand if they have the means to use a product. It might also allow them to know if they can use the product for a specific purpose. For instance, suppose a customer wants to buy antivirus software for their computer and tablet. Here, before buying the app, they can check if their computer possesses the required capabilities and also if the app works on tablets.
Characteristics of a solution
Sometimes, companies use the terms solution and product interchangeably, as by doing this, they can promote their goods and services as a solution to a problem. For instance, a software manufacturer may present a package of products and services as a solution. This may comprise software, hardware, and services that help a customer with an issue, such as protecting their computers from malware. Here are several characteristics of solutions that may help you differentiate this term from products:
Based on a standard product
Solutions are often based on a standard product because, without the product, the solution cannot exist. This means that creating a product comes from the desire to provide a solution to a problem. Manufacturers can modify, enable, or disable the features of a product depending on the requirements of its intended users and how these features can help customers solve a problem.
Unique marketing approach
Businesses often market their solutions by placing them at the centre of common challenges that organizations and individuals encounter. This marketing approach is ideal for convincing customers of the effectiveness of a solution. For instance, they can promote accounting software by stating that it can help accounting professionals save time by generating annual income statements in three steps.
Products vs. solutions
Here are various differences between a product and a solution:
Concept of value
The value of a solution often differentiates it from a product. While a solution effectively addresses a client's issue, a product is only a potential solution to a problem. A customer may purchase a product because they believe it can solve the problem they're experiencing. This means products only possess potential value.
Solutions differ from products because of their changing documentation. While the features and benefits of a product stay the same unless the company upgrades them, the documentation or method of presentation for solutions can change depending on the market. The way one organization uses a good to solve its problems may differ from another, which is the reason it's necessary to tailor documentation of solutions for varying consumer requirements.
Products often come with a published or suggested retail fixed price. Solutions are different because of their non-standard pricing. This means that a solution's total value may vary depending on several factors, such as the list price of the standard product or products that the company included in it. It might also consider the number of additional features or components it offers and the customizations the provider added to meet the requirements of a specific group of consumers.
For instance, two companies purchasing a domain name may not pay the same amount of money to the provider. One company can choose to go for additional features, such as a secure sockets layer (SSL) certificate, while another company may not opt for these. What each one pays depends on the inclusions of the solution they purchased.
Importance of understanding goods and solutions
Gaining a deeper understanding of products and solutions is important because you can:
Increase a company's sales
Customers are often willing to spend money on what they consider useful. They're more likely to splurge on an item that provides value rather than one with limited use. Developing solutions that target consumers' specific pain points is a common approach that companies use to make their offerings more attractive to consumers.
Develop your creativity
Creating solutions and products can encourage you to be creative. This can happen if you're developing a product that another company already offers or if you're trying to create a totally new product. Product creation involves conducting research about the company's target market and using the data you collected to determine the most effective way to meet consumer demands while making a profit.
Improve your credentials
Recruiters and hiring managers often prefer job candidates with skills such as creativity, problem-solving, communication, and analysis. These are skills you may likely gain or develop when working on goods and solutions. You may become an asset for any company you work for and enjoy higher chances of working on complex tasks that come with better pay. There's typically a demand for people with this set of skills in many industries.
Enhance an organization's public image
Working and creating a product that meets customers' expectations may improve a company's sales and their reputation. If waste management or environmental pollution is a challenge for a particular community, developing a product that's useful and recyclable may be a powerful public relations resource. This may attract customers to the product because of its environmental benefits.
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