Three roles of a product

Created: April 28, 2023
Updated: August 10, 2023

People often say, “People buy products to solve a problem,” and that’s oversimplistic.

Product’s aren’t just for solving problems

Saying “a product is for solving a problem” is a neat, catch-all bucket that makes it easy to describe why a person buys something.

It allows us to say things like, “people buy water to solve the problem of hydration.” It works to (sort of) explain why people buy a category of product (like bottled water) but it’s bad at explaining more nuance:

  • But why do people buy Fiji Water over Dasani?

  • Why do lawyers carry Perrier into a client meeting but not a giant Gatorade?

The reason is status. I use the word status to mean: showing membership to a group (sometimes I call this a status group).

Every product has three elements

  • Functional - the problem-solving part

    • The human tendency to avoid pain
  • Fun - the fun part

    • Also known as hedonic goods in the language of Economics

    • The human tendency to seek pleasure

  • Status - the part that signals or justifies the buyer’s identity

    • The human tendency to seek social connection, membership to a group, and achieve a high standing in that group.

Products don’t need to score highly on every element

Some examples

  • Garbage bags

    • Highly functional

    • A better brand may signify a marginally higher status

    • Very low hedonism

  • Vintage watches

    • Moderately functional (we have watches in our phone, computer, various cheaper watches)

    • Low hedonism

    • High status

      • Signified high-class appreciation, wealth, etc.