TOPIC 8.

PRODUCT STRATEGIES
Introduction
 A product may be defined as anything that can be offered to a
market for attention, acquisition, use, or consumption that
might satisfy a want or need. Products include more than just
tangible goods.
 Broadly defined, products include physical objects, services,
events, persons, places, organizations, ideas or mixes of these
entities.
 Services are a form of product that consists of activities,
benefits, or satisfactions offered for sale that are essentially
intangible and do not result in the ownership of anything.
 Whenever consumers make purchase decisions they do not buy
products but buy benefits that can be functional (relating to the
practical purpose a product serves) or the Psychological (relating
to how a product makes one feel).
 Products, Services, and Experiences

 Product is a key element in the overall market offering. Marketing-mix

planning begins with formulating an offering that brings value to target
customers.
 This offering becomes the basis upon which the company builds
profitable relationships with customers. A company's market offering
often includes both tangible goods and services. Each component can be
a minor or a major part of the total offer.
 At one extreme, the offer may consist of a pure tangible good, such as
soap, toothpaste, or salt-no services accompany the product. At the
other extreme are pure services, for which the offer consists primarily
of a service e.g. doctor's exam or financial services.
 To differentiate offers, beyond simply making products and delivering
services, firms are creating and managing customer experiences with
their products or services. Firms are recasting their traditional goods
and services to create experiences that are memorable.
Levels of Product and Services
 Each product item offered to customers can be viewed on three levels:
Diagram showing levels of a Product:
 Levels of a Product

1. The core product is the core, problem solving benefits that

consumers are really buying when they obtain a product or service.
It answers the question what is the buyer really buying? It represents
the heart of the product, the main reason for its existence and
purchase.
2. The actual product /Tangible product may have as many as five
characteristics that combine to deliver core product benefits. It is
essentially the means by which the marketer puts flesh on the core
product, making it a real product that clearly represents and
communicates the offer of the core product. The tools used are:
quality level, product features, design specifications, brand name
and packaging.
3. The augmented product represents add on or extras which do not
themselves form an element of the product but may be used by
producers to increase products benefits or attractiveness.
Levels of a Product
3. The augmented product - It includes any additional
consumer services and benefits built around the core and
actual products. Product differentiation is done at this
level. Product augmentation leads the marketer look at
users total consumption system.
4. The Potential Product. This defines the product in terms
of its possible evolution. It considers what the product
could be and should be in the future.
When developing products, marketers must: 1). Identify the
core consumer needs that the product will satisfy. 2). Design
the actual product and finally 3). Find ways to augment the
product in order to create the bundle of benefits that will
best satisfy consumer’s desires for an experience.
Product Classification
There are three basic types of product classifications.
 Durable products are used over an extended period of time.
Nondurable products are more quickly consumed, usually in a
single use or a few usage occasions. Either consumer or
industrial customers can buy each of these products.
 Consumer products are sold to the final end-user for personal
consumption.
 Industrials products are bought by individuals and organizations
for use in their administrative or processing operations.
 Industrial products are the most widely used of these products
and consist of consumables such as paper clips or raw materials
that are converted to finished products. Product classification
in detail:
Consumer Products

 Consumer products are those bought by final consumers for

personal consumption. Usually classified based on how
consumers go about buying them. Consumer products include
convenience products, shopping products, specialty
products, and unsought products. These products differ in
the ways consumers buy them and therefore in how they are
marketed.
 Convenience products are consumer products and services
that the customer usually buys frequently, immediately, and
with a minimum of comparison and buying effort e.g. soap,
candy, newspapers, and fast food. They are usually low
priced and placed in many locations to make them readily
available.
Consumer Products
 Shopping products are less frequently purchased products that customers
compare carefully on suitability, quality, price, and style. To buy these
products, consumers spend much time and effort in gathering information and
making comparisons e.g. furniture, clothing, used cars, major appliances, and
hotel and motel services. Usually distributed through fewer outlets to provide
sales support to help customers in their comparison efforts.
 Specialty products are products with unique characteristics for which a
significant group of buyers are willing to make a special purchase effort e.g.
specific brands of cars, high-priced photographic equipment, designer clothes,
and the services of medical or legal specialists. A Lamborghini is a specialty
product that buyers are usually willing to travel great distances to buy one.
 Unsought products are products that the consumer either do not know about
or knows about but does not normally think of buying. Most major new
innovations are unsought until the consumer becomes aware through
advertising e.g. life insurance and blood donations to the Red Cross. By their
very nature, unsought products require a lot of advertising, personal selling,
and other marketing efforts.
 Industrial Products

 Industrial products are those purchased for further processing or for

use in conducting a business. The distinction between a consumer
product and industrial product is based on the purpose for which the
product is bought. If a consumer buys a lawn mower for use around
home, the lawn mower is a consumer product. If the same consumer
buys the same lawn mower for use in a business, the lawn mower is
an industrial product.
Three groups of industrial products include materials and parts, capital
items, and supplies/ services.
1. Materials and parts include raw materials and manufactured
materials and parts. Raw materials consist of farm products.
Manufactured materials and parts consist of component materials and
component parts. Most manufactured materials and parts are sold
directly to industrial users. Price and service are the major marketing
factors; branding and advertising tend to be less important.
Industrial Products

2. Capital items are industrial products that aid in the

buyer's production or operations, including installations
and accessory equipment. Installations consist of major
purchases such as buildings and fixed equipment.
Accessory equipment includes portable factory equipment
and tools and office equipment.
3. Supplies and services include operating supplies and
repair and maintenance items. Supplies are the
convenience products of the industrial field because they
are usually purchased with a minimum of effort or
comparison. Business services include maintenance and
repair services and business advisory services.
 Organizations, Persons, Places, & Ideas
 Marketers have broadened the concept of a product to include other
"marketable entities” namely, organizations, persons, places, and
ideas.
 Organizations carry out activities to "sell" the organization itself.
Organization marketing consists of activities undertaken to create,
maintain, or change attitudes and behavior of target consumers. Both
profit and nonprofit organizations practice organizational marketing.
 People can also be thought of as products. Person marketing consists of
activities to create, maintain, or change attitudes or behavior toward
particular people. All kinds of people and organizations practice person
marketing.
 Ideas can also be marketed. All marketing is the marketing of an idea,
whether it is the general idea of brushing your teeth or the specific
idea that crest provides the most effective decay prevention
Individual Product Decisions

These decisions are about product attributes, branding, packaging, labeling, and product
support services. Marketers make individual product decisions for each product including:
product attributes decisions, brand, packaging, labeling, and product-support services
decisions.
 Product Attributes: Product attributes deliver benefits through tangible aspects of the
product including features, and design as well as through intangible features such as
quality and experiential aspects. A brand is a way to identify and differentiate goods
and services through use of a name or distinctive design element, resulting in long-
term value known as brand equity. The product package and labeling are also
important elements in the product decision mix, as they both carry brand equity
through appearance and affect product performance with functionality. The level of
product-support services provided can also have a major effect on the appeal of the
product to a potential buyer.
 Individual Product Decisions - Branding

 Branding is the set of activities designed to create a brand and position it in

the minds of consumers.
 A brand is a name, term, sign, symbol, or design, or a combination of these,
that identifies the maker or seller of a product or service.
 Consumers view a brand as an important part of a product, and branding can
add value to a product. Branding helps buyers in many ways.
 Brand names help consumers identify products that might benefit them.
 Brands also tell the buyer something about product quality. Buyers who always
buy the same brand know that they will get the same features, benefits, and
quality each time they buy.
 Branding also gives the seller several advantages. The brand name becomes the
basis on which a whole story can be built about a product's special qualities.
 The seller's brand name and trademark provide legal protection for unique
product features that otherwise might be copied by competitors.
 Branding also helps the seller to segment markets.
 Individual Product Decisions - Packaging

 Packaging involves designing and producing the container or

wrapper for a product.
 The package may include the product's primary container
(the tube holding Colgate toothpaste); a secondary package
that is thrown away when the product is about to be used
(the cardboard box containing the tube of Colgate); and the
shipping package necessary to store, identify, and ship the
product (a corrugated box carrying six dozen tubes of
Colgate toothpaste).
 Labelingprinted information appearing on or with the
package is also part of packaging.
Functions of Package
Traditionally, the function of the package was to contain
and protect the product. Increased competition and
confusion on retail store shelves means that packages must
now perform many sales tasks:
 attracting attention,
 describing the product,
 communicating the brand and its benefits;
 protecting the product from damage and contamination
during shipment, as well as damage and tampering once
it’s in retail outlets;
 preventing leakage of the contents;
 presenting government-required warning and information
labels
Labeling

 Labels may range from simple tags attached to

products to complex graphics that are part of the
package.
 They perform several functions. At the very least, the
label identifies the product or brand, such as the name
Sunkist stamped on oranges.
 The label might also describe several things about the
product, who made it, where it was made, when it was
made, its contents, how it is to be used, and how to
use it safely.
 Finally, the label might promote the product through
attractive graphics.
Product Support Services
 Customer service is an element of product strategy. A
company's offer to the marketplace usually includes some
services, which can be a minor or a major part of the
total offer.
 Product support services are services that augment actual
products. More companies are using product support
services as a major tool in gaining competitive advantage.
  A company should design its product and support services
to profitably meet the needs of target customers.
 The first step is to survey customers periodically to assess
the value of current services and to obtain ideas for new
ones.
References
1. Bearden O. W. et al (2004): Marketing Principles and
Perspectives, McGraw Hill, Irwin, New York.
2. Boyd Harper W, Walker C, Orville Jr, Mullins W. John,
and Larréché Jean-Claude (2002): Marketing
Management, A Strategic Decision Making Approach;
4th Edition, McGraw-Hill, Irwin.
3. Brassington Frances and Pettit Stephen (1997):
Principles of Marketing; Financial Times Pitman
Publishing.
 Kotler Philip and Armstrong G. (1994): Principles of
Marketing, 6th Edition, Prentice Hall, New Jersey.