Product definition: What it is and how to build one customers love
Last updated: April 2025
A product is more than what you sell — it is the complete experience a customer has with your company. This guide breaks down what defines a product, the different types, and how product managers can shape offerings that deliver tangible value.
A product is anything — physical or digital — that provides value to customers in exchange for something of value in return. This includes goods, services, software, or experiences. Whether you are buying a bottle of shampoo, subscribing to a fitness app, attending a live concert, or anything in between, each one is considered a product.
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).
Product strategy starts with a clear product definition. No matter where you are in the product lifecycle, knowing what you offer and why it matters is foundational to success.
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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 definition: What is a product?
A product is a tangible or intangible item that solves a need or delivers a desired outcome for a customer. It can be sold, licensed, or exchanged for value. Products may take many forms, including physical goods, software applications, services, or hybrids.
Examples of products
To understand the variety of products that exist, consider these examples:
Physical product: A reusable water bottle
Digital product: A video editing app
Hybrid product: A smart home device with a companion mobile app
Service product: A monthly meal delivery subscription
Experience product: A ticket to a concert or sporting event
Each of these offers a solution, benefit, or experience that someone is willing to pay for. That is what makes it a product.
Product characteristics and what customers look for
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.
Different types of products and who they are for
Products come in many forms — and who they are built for matters just as much as what they do. As a product manager, understanding the differences between consumer, business, and industry products can shape how you design, deliver, and transform your product.
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, this knowledge can guide your career path and help you specialize and advance.
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:
Purchasing behavior | Description |
Convenience | Purchased frequently and with little planning or effort Examples: Magazines, on-demand services |
Shopping | Higher price, purchased with more consideration Examples: Clothing, airline tickets |
Specialty | Niche appeal, often more expensive Examples: Banking applications, vertical market software |
Business products
Business products, or business-to-business (B2B) products, help companies operate or create their own offerings. These include raw materials, equipment, services, and software — including SaaS tools for project management, accounting, or customer support. Buying decisions often hinge on trial access, positive reviews, and clear pricing.
B2B customers typically take a more deliberate approach to purchasing. Key considerations include:
Free trials and demos: Businesses want to validate functionality and fit before buying.
Social proof: Reviews and testimonials from other organizations help build trust.
Clear pricing and contracts: Transparent terms reduce friction and support long-term relationships.
Flexible return policies: Warranties or guarantees help reduce perceived risk.
Personalized sales: Buyers expect vendors to understand their specific needs and offer tailored solutions.
Industry products
Also known as vertical market products, these are tailored solutions built for specific industries. They often include features, integrations, and compliance standards that reflect the unique needs of a sector. Developing these products requires domain expertise and close collaboration with industry stakeholders.
Examples include:
Energy: Control systems for power distribution
Healthcare: Electronic health records software
Finance: Risk and compliance management tools
IT: Network security for regulated environments
Whether you are building for individuals, businesses, or specialized industries, your product must solve a real problem in a way that your audience understands and values.
Why product definition matters
Getting your product definition right is critical. It shapes how you position what you are offering, what customer problem you are solving, and how your team builds and delivers value. Strong product definition helps everyone — from product managers to marketers — stay aligned on what you are trying to build and why it matters.
What is the Complete Product Experience?
Definitionally, a product is 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. Thinking about the full experience (and not just the product itself) helps teams build more lovable and differentiated solutions. 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:
From idea to launch: What happens after defining a product?
So, how do you move from defining a product to delivering something customers love? This is where the real work starts. Most product managers follow a disciplined development approach to guide the journey from idea to launch.
We use a 10-stage framework that covers every phase of product development — from identifying an opportunity to delivering a complete product experience.
Here is a brief overview of what comes next:
Monitor: Stay alert to shifts in customer behavior, market trends, and emerging opportunities.
Explore: Investigate the problem space. Interview customers, dig into data, and define where real needs exist.
Define: Craft a clear problem statement and early solution concept. Align on why the product matters.
Evaluate: Assess feasibility and potential value. Test your riskiest assumptions.
Plan: Set goals, prioritize what to build, and define how the work will unfold.
Build: Translate ideas into working functionality. Collaborate closely across teams.
Deliver: Bring the product to market. Coordinate a go-to-market plan and make sure internal teams are ready.
Launch: Announce what is new. Support customers as they begin using your product.
Measure: Track results. Evaluate performance against goals and gather feedback.
Improve: Iterate based on what you learn. Ship enhancements and continue evolving the experience.
If you are assessing a product idea today, you are likely focused on the first few stages — especially exploring the problem your customers face and defining how you will solve it. But it helps to understand the full picture. Each stage builds on the last and brings you closer to delivering something meaningful to customers.
Helpful resources for product managers
Explore these guides and templates to build your product knowledge and sharpen your craft. Each one is grounded in real experience and made to help you move forward with confidence.
Foundational concepts
Product building
Go-to-market planning
Career growth
Product management templates
FAQs about products
A product is an item or service offered to a customer to solve a problem or fulfill a desire. It can be physical, digital, or a blend of both — but it always involves a value exchange.
Products can be anything that solves a problem or fulfills a need. Common examples include digital tools like productivity apps, physical items like headphones, hybrid products like smartwatches, and services like ride-sharing or meal delivery.
Product teams rely on purpose-built tools to support every stage of development, from strategy through launch and beyond. The Aha! suite includes:
Aha! Roadmaps for setting strategy and building visual plans
Aha! Discovery for leading research and interviews
Aha! Ideas for collecting and analyzing customer feedback
Aha! Whiteboards for early concepting and collaborative planning
Aha! Knowledge for sharing product documentation
Aha! Develop for managing engineering work
A successful product solves a real problem, delivers consistent value, and provides a great experience. It aligns customer needs with business goals — then evolves based on feedback and performance.
