A product is anything that satisfies a need or wants of customers. Product is the core element of marketing activities.
- Tangible Products – Physical goods (sugar, tea, books, shoes, clothes, TV, car, etc.)
- Intangible Products – Service product (bank, transport services, saloon, doctor, engineer’s service, etc.)
A product can also be called a “bundle of utilities” because consumers purchase utilities of products, not physical products but utilities attached to the product.
Levels of Product
There are five levels of product:
- Core: Fundamental benefits. (A website that designs the logo for the business)
- Basic/Actual Product: What they actually received. (Available of different pre-made designs combining letters, symbols, or images)
- Expected Product: Set of attributes. (Logo is perfectly designed according to the slogan of the company)
- Augmented Product: Added benefits beyond the consumer’s expectation and consumers will be delighted. (Looks of logo on various banners, leaflets, polo-shirts, and business cards before actually printing)
- Potential Product: All possible augmentation of the product in the future. (Free designs of unlimited logos for business subscription and more additional updates regarding logo designing)
Types of Product
Consumer Product (Personal and Household Consumption)
- Convenience Goods: Convenient for consumers, frequently purchase, low price, marketing consideration. (rice, soap, pens, toothpaste, etc.)
- Shopping Goods: Purchased sometimes but not frequently, higher price, comparing the goods in terms of price and quality. (clothes, furniture, watches, smartphones, etc.)
- Specialty Goods: Generally they are unique products like Rolex watches, Rolls Royce cars, and other luxury items which are expensive and not necessary to buy. (exotic perfumes, famous paintings, high-end gadgets, expensive cars, etc.)
- Unsought Goods: May not know about the product, if also knows consumer does not think of buying. (insurance, fire extinguishers, electric cycle, etc.)
Industrial Product (Manufacturing Purposes)
- Raw Materials and Parts (sugarcane, corn, wheat, steel, plastic, etc.)
- Capital Goods (buildings, machines, vehicles, equipment, tools, etc.)
- Operating Supplies (stationery, furniture, papers, oil, machines lubricant, etc.)
Product Life Cycle (Sales History of a Product in Different Periods)
- Introduction Stage: First-time customers are introduced to the new product and have little-to-no competition for a product in the market.
- Growth Stage: Growing demand for the product, an increase in production, and expansion in its availability by the company. Some new companies will also start to produce similar products.
- Maturity Stage: The most profitable stage, is the time when the costs of producing and marketing decline, and the demand for the product is very high in the market. Many companies will have started to sell similar products.
- Decline Stage: Increased competition as other companies will also gain profits, the product may lose market share and begin its decline. The initial producer of the product will start innovation or produce new products and will again start the introduction stage.
New Product Development Process
New products include original products, improved products, modified products, and new brands that the firm introduces in the market.
- Idea Generation: This part of the process involves brainstorming different ideas and suggestions regarding new products or ways that you can enhance a current product.
- Idea Screening: Determining which ideas you should be discarding and which ones are worth pursuing depending on the different market factors.
- Concept Development and Testing: This is basically a detailed description of the product. E.g., price, features, benefits, target market, size & dimensions, etc.
- Marketing Strategies and Business Analysis: Evaluation of the promotion, pricing, and positioning of your new product. Business analysis involves reviewing the profit projections, expected costs, and sales forecasts for the product.
- Product Development and Testing: This involves producing a product that is perfectly finished as per the concept developed and is ready to market.
- Test Marketing: This involves launching the finished product to a sample market so that you can see how the product performs under the specified marketing strategies.
- Commercialization: This involves selling the product on a larger scale to all customers and continuing the sales and further marketing activities.
Branding involves using identification features on the product so that buyers can easily recognize it. (It could be a name, term, sign, symbol or design, or combination of them)
Objectives of Branding
- Product identification
- Promotion (advertisement, personal selling, publicity, etc.)
- Product image and goodwill
- Quality assurance
- Legal protection (All trademarks are brands but all brands are not trademarks. Registered brand is a trademark)
- Consumer welfare
Types of Brand
- Ownership Based: Manufacturer’s Brand, Distributor’s Brand, Licensed Brand
- Product-Line Based: Individual Brand, Family Brand
It is goodwill gained by that brand.
- Brand equity is the goodwill that a brand has gained over time.
- Brand equity is the added value endowed to products and services with customers.
- It is the result of brand loyalty.
There are five stages of positive brand equity
- Brand awareness
- Brand recognition
- Brand trial
- Brand preference
- Brand loyalty
It refers to the activities of designing and producing the container or wrapper for a product.
Functions of Packaging
- Product differentiation
Levels of Packaging
- Primary Packaging: It provides immediate containment to the products. It acts as an envelope for the product.
- Secondary Packaging: It helps the primary packaging for transportation or display. This packaging is thrown away after opening and using the product.
- Shipping Packaging: It is designed to identify transport and store the products. It is the bulk packaging that holds secondary packages for shipments.
Essentials of Good Packaging
- Functional and convenience
- Easy to remove
- Brand reinforcement
- Environmentally friendly
Medical care, insurance, banking, repair shops, travel, hotel, advertising agency, consultancy, beauty parlors, barber, etc. They all fall under the service product.
Characteristics of Service Products
- Intangibility: Cannot be touched, seen, or heard, but only can be felt.
- Variability: The same service can differ from person to person, i.e. customized service.
- Inseparability: The service cannot be separated from the service provider.
- Perishability: Service cannot be stored or preserved, it vanishes soon after it is delivered.
Service Product Marketing Strategy
- People Strategies: Internal Marketing (Employee, Manager, Professionalism, Politeness, etc.)
- Physical Evidence Strategies: External environment of the marketing (Land, Building, Location, Decoration, Cleanliness, etc.)
- Process Strategies: Service-providing process (Order Delivery, Table Serving, Speed, Timely, Accuracy, etc.)
Product Line Strategies
A product line is a group of closely related products. Examples are mentioned below:
- Biscuits: Glucose, Coconut, Salted, Cracker, etc.
- Electronic: TV, Radio, Refrigerator, Computer, etc.
- Soap: Detergent, Shampoo, Bathing Soap, Medical Soap, etc.
- Service: Hospital, School, Hotel, Bank, etc.
- Product Line Length Strategy: Line expansion strategy (adding a similar set of products), Line contraction strategy (removing a similar set of products).
- Product Line Modernization: Product lines are modified to suit modern styling, trends, and preferences, and re-launched.
- Line Featuring: Certain items in a product line are given special promotional attention.
Product Mix Strategies
The product mix is a set of all product lines and items that a particular seller offers.
- Product Width: The number of product lines that a company has. (Biscuits, Electronics, Soap, Auto, i.e., Product Width – 4)
- Product Length: The total number of products in all product lines combined. (Biscuits – 4, Electronics – 3, Soap – 5, Auto – 2, i.e., Product Length – 14)
- Product Depth: The number of product variations in an individual product line. (Biscuits – Glucose, Coconut, Salted, Cracker, i.e., Product Depth in Biscuits – 4)
- Product Consistency: Shows how closely product lines are interrelated in the context of their goal, production process, and distribution channels. (Shampoo & Soap, Noodles & Chowmin are consistent with each other)