It's actually pretty easy to do (you'll have to pretend that the red circle is your product image since I didn't have a real one to work with).
1. Made a circle with the elliptical marquee and filled it with red (for the product image, you would select and copy it to a new file)
2. Duplicated the layer and desaturated it
3. Added omni lighting effect to the red circle to define the light direction and make it a 3D ball
4. Distorted the desaturated layer (Edit > Transform > Distort) until it was placed where I wanted the shadow to be
5. Selected the distorted grayscale circle with the magic wand and filled it with a black to white gradient
6. Used gaussian blur on the distorted shadow until it looked like a shadow
7. Added a layer underneath and filled with black to white gradient
8. Added a drop shadow to the red circle and moved it to its own layer. Blurred, distorted and moved it until it was behind and to the left of the red circle
9. Added texture to the red ball and blurred slightly
10. Burned in the bottom of the red ball until it blended in with its shadow
That's about it...
