This article introduces you to fundamental product concepts, beginning with a broad definition of “product”. After this, we will see how marketers classify the products they deal with and, this is usually a vital step in designing your marketing strategy. The unit also takes you through the elements that make up a product.
Table of Contents
THE MEANING OF A PRODUCT
Let us start by asking you to name any three “products” off-head. You are most likely to consider things like cola, shoes, cars. . or three other similar products.
Indeed, you might not think of games reserves, WEMA Treasure account, or the popular TV comedy – “Papa Ajasco”. This is because when we are on the buying end of an exchange, we often think of products as tangible objects, that is, things we can actually touch and possess. Football teams, transport companies, TV programmes etc. provide an intangible service for our use or enjoyment, not for our own.
Hence, from the marketing point of view, a product is defined as anything offered for sale for the purpose of satisfying a need or want on both sides of the exchange process. In this regard, a product includes a tangible object that marketers refer to as a good, as well as an intangible service (such as an ideas, a place, an event, an organization etc), or any combination o f tangible objects and intangible services.
Quite often, most products consist of a bundle of attributes that can be heavy on the tangible side, or heavy on the intangible side, or anywhere in between.
PRODUCT LEVELS
As illustrated in the Figure below, products can be viewed under five levels. Each of these levels adds more customer value, and the five constitute a customer value hierarchy. The most fundamental level is the core benefit i.e. the fundamental service or benefit that the customer is really buying. For instance, the core benefit enjoyed by a guest in a hotel is “rest and sleep”.
Figure 8.1: Levels of a Product
At the second level, the marketer has to turn the core benefit into a basic product. In the hotel example, such things as a bed, bathroom, towels, table, chair, dresser and closet are the basic products enjoyed by a guest in the hotel. In the third level, the marketer prepares an expected product i.e. a set of attributes and conditions buyers normally expect when they purchase a product. For instance, hotel guests expect a clean bed, fresh towels, working lamps, and a relatively quiet environment.
At the fourth level, the marketer prepares an augmented product that exceeds customer expectations.
In this wise, a hotel can include a remote-controlled TV. Set, remote-controlled air conditioner, fresh flowers, rapid check-in, express checkout, and fine dining and room service. You need to understand that in the developed countries, however, competition takes place mostly at the expected product level.
At the fifth level, is the potential product, which consists of all the possible augmentations and transformations the product might undergo in the future.
The foregoing description of the different layers of a product should make it clear that a product is definitely more than a simple set of tangible features. Consumers actual y want to see products as a complex bundle of benefits that satisfy their needs. The facts, as of today are that most competition takes place at the product augmentation level. This is why successful firms add benefits to their offers. Such benefits not only satisfy the customers, they are also delighted.
ELEMENTS OF A PRODUCT
Elements that make up a product include attributes, branding, packaging, labelling, and product support services. Certain decisions along these lines are often made concerning the development and marketing of individual products. Each of these elements applies to all categories of products. However, the way marketers handle them can vary significantly from one product to another.
Actual y, one of the primary goals of marketers is to differentiate their products from competing ones by developing unique strategies for each product element. We shall be taking a closer look at each of these elements.
PRODUCT ATTRIBUTES
The development of a product necessarily involves the consideration of the benefits that the product will offer. Such benefits are communicated and delivered by product attributes like quality, features and design. The degree of consideration given to these attributes has far-reaching implications on consumers’ acceptance of the product.
PRODUCT QUALITY
Quality is one of the marketing manager’s strategies of placing the product in the mind of the prospect or the consumer (i.e. positioning). Whenever a product is being developed, the issue of quality comes under two dimensions: level and consistency. In the first case, the marketing manager must choose the quality of a product to perform its functions, such as overall durability, reliability, precision, ease of operation, and repairs, as well as other valued attributes. The second consideration for quality is in respect of consistently delivering the targeted level of quality to consumers. Hence, there should be no defects in the products being offered to the market. In addition, no variations should be spot ed in them.
It is realization of the need for high levels of quality consistency that firms At up quality control units. General y, good quality control measures involve preventing defects before they occur, through better product design and improved manufacturing process.
In recent times, many business enterprises have embraced “Total Quality Management (TQM) as an important tool to constantly improve product and process quality in every facet of their activities. Such companies are gradual y turning quality into a potent strategic weapon for gaining an edge over competitors by offering products and services that bet er serve customers’ needs and preferences for quality.
PRODUCT FEATURES
Another important product attributes are the features of particular production processes. A product can be offered with varying features. A model without any extras (a “stripped-down” model) is usual y the starting point. The company can simultaneously create higher-level models by adding more features. Consider an automobile-manufacturing plant for example.
A “stripped-down” model of the vehicles being produced will contain no extra features like air-conditioners, headrests, alloy rims, car stereo etc. However, the higher models which contain any one or combinations of these extras features are fast becoming a competitive tool for differentiating the company’s products from competitors. What is general y needed here is some high degree of innovativeness backed by a sound and efficient marketing research unit.
PRODUCT DESIGN
The process of designing a product’s style and function concerns creating that is attractive, easy, safe, and inexpensive to use and service. It should also be simple and economical to produce and distribute.
Just like product features, product design can be one of the most powerful competitive weapons in a company’s marketing arsenal.
For instance, good designs can attract attention, improve product performance, cut production costs, and give the product a strong, competitive advantage in the target market.
B R A N D I N G
A forward-looking marketing manager will usually consider the issue of branding, as part of his strategic plans. But what is a brand?
A brand is a name, term, sign, symbol or design, or a combination of these, which is intended to identify the products or services of one seller or group of sellers and to differentiate them from those of competitors. Therefore, a brand identifies the maker or seller of a product. It is a seller’s promise to deliver consistently, a specific set of features, benefits, and services to buyers.
We must observe that the term branding includes brand names, brand marks and trademarks.
A brand name is narrower in meaning and is concerned with that part of a brand that can be vocalized (i.e. utterable or pronounceable). A brand name is defined as a brand or part of a brand consisting of a word, let er, group of words or letters, comprising a name, which identifies the goods or services of a seller or group of sellers and distinguishes them from competitors. Examples here include Coca Cola, Pepsi Cola, Peugeot, Toyota, Panadol, and Bacchus.
Brandmark is that part of a brand which can be recognized but is not utter able or pronounceable, such as symbols, designs or distinctive colouring or lettering. Examples. Lion head (for Peugeot).
A trademark is a brand or part of a brand that is given legal protection because it is capable of exclusive appropriation. A trademark usually protects the seller’s exclusive rights to use the brand name and/or brand mark.
Branding is now an important issue in product strategy that can be viewed from two sides. On the one hand, developing a branded product requires a great deal of long-term marketing investment, especially for advertisement, promotion and packaging. Hence, some manufactures usually find it convenient and cheaper to make the product and let others do the brand building. This strategy is common with Taiwanese manufactures who make substantial proportion of the world’s clothing, consumer electronics, and computers that are sold under non-Taiwanese brand names.
On the other hand, many manufacturers have come to realize that the power lies with the companies that control the brand names. For example, brand name clothing, electronics, and computer companies can replace their Taiwanese manufacturing sources with cheaper sources in Malaysia. It is however regret able that the Taiwanese producers can do very little to prevent the loss of sales to less expensive suppliers.
General y, branding adds value to consumers and society since it leads to higher and more consistent product quality. It also increases the degree of innovativeness in the business world by giving producers some incentives to look for new features that cannot be easily copied by competitors. In this sense, branding can be said to result in more product variety and choice for consumers. Final y, branding increases shoppers’ efficiency by providing sufficient information about products and where to find them.
Apart from the above, branding has been observed to confer specific advantages on both the buyer and the seller.
(i) Brand names inform the buyer about product quality. For instance, a buyer who purchases the same brand knows that he will obtain the same quality each time he buys.
(ii) Brand names also increase the shopping efficiency of the buyer.
Since different products have their particular brand names, a buyer will find it easy to pick his choice from the pack instead of just aimlessly going through nameless products.
(iii) Brand names also assist in calling customers’ attention to new products, especially when backed by aggressive promotional activities…
(i) Brand names make it easier for sellers to receive and process orders, as well as track down problems. For example, a contract for the supply of vehicles will usually be specific about the particular model needed.
(ii) The sellers’ brand name and trademark instantly give legal protection for unique
product feature that otherwise might be copied by competitors.
(iii) Branding allows the seller attract loyal and profitable sets of customers.
(iv) Through branding, the seller is able to segment his markets and by so doing cater for the needs of the various segments in the market.
PACKAGING
Packaging has to do with the activities of designing and producing the container or wrapper for a product. The package may comprise of the fol owing:
(a) the product’s primary container (e.g. the bottle holding bennylin cough a syrup);
(b) a secondary package, that is thrown away when the product is about to be used (i.e. the
card box containing the bottle of Bennylin cough syrup); and
(c) the shipping package necessary to store, identify and ship the product (e.g. a
corrugated box carrying larger volumes of the product).
In today’s business, several factors have made packaging an important marketing tool. For instance, the increase in self-service dictates that the package must necessarily perform many sales tasks such as attracting attention, describing the products, as well as making the sale. In actual fact, innovative packaging can offer a company an advantage over competitors.
Labelling, which consists of printed information appearing on or with the package, should be seen as part and parcel of packaging. Labels may range from simple tags attached to products to complex graphics that are part of the package. They often perform at least two functions. In the first place, the label identifies the products or brand. Secondly, it may contain some useful information about the product such as its content, expiry date, direction for use etc.
PRODUCT–SUPPORT SERVICES
Another important element of product strategy is customer service. What a firm offers in the marketplace usually includes some services, which may be a minor or major part of the total offer. These are known as product-support services since they augment actual products.
Good customer service has its positive points. For instance, it costs less to keep the goodwill of existing customers than it does to attract new ones or win back lost customers. Firms that provide high-quality service usually have the opportunity to charge more, grow faster and make more profits.
It is in this sense that many are now setting up strong customer service operations to handle complaints and adjustments, credit service, maintenance service, technical service, and consumer information. A well-staffed and equipped customer service department should be able to effectively coordinate all the firm’s services, create consumer satisfaction and loyalty, and helps the firm to further be ahead of its competitors.
