Rocket

The Kerbal X can achieve an orbit around Kerbin

The Kerbal 2 is only capable of a sub-orbital flight

A rocket is a vertical launched craft. Usually it uses rocket engines to propel it forward and doesn't utilise the lift of wings or winglets. If any it only uses control surfaces to help steering in an atmosphere. The main purpose of a rocket is to reach space and an orbit or at least a sub-orbital flight.

With various stages rockets can dump dry mass and get more efficient, while a plane usually doesn't stage.

Rockets are build in the Vehicle Assembly Building and then launched on the launch pad.