Product decisions are an essential aspect of the marketing mix and involve a series of strategic choices made by a company to develop and manage its product offerings. These decisions encompass various aspects of the product, including its design, features, branding, packaging, and positioning.
Product design refers to the physical appearance, structure, and functionality of the product. It involves determining the shape, size, color, materials, and overall aesthetics to create a product that meets the needs and preferences of the target market. The design should not only be visually appealing but also align with the brand image and deliver a positive user experience.
Product features are the specific characteristics and functionalities that the product offers. These features should be aligned with customer needs and provide unique benefits or advantages over competing products. Companies need to conduct market research to identify the features that are most valued by customers and ensure that their product provides them.
Branding involves creating a distinct identity for the product through the use of a brand name, logo, tagline, and other brand elements. The branding decision should consider the target market and the desired brand image. A strong brand identity helps differentiate the product, build customer recognition and loyalty, and influences purchase decisions.
Packaging refers to the physical container or wrapper that holds the product. It serves multiple purposes, including protecting the product, providing information, and attracting customers. The packaging design should be visually appealing, convey relevant product information, and align with the brand image. Additionally, it should consider practical aspects such as convenience, functionality, and environmental sustainability.
Product Line and Product Mix
Product line refers to a group of related products that are sold under the same brand. Companies make decisions about the number of product lines, the range of products within each line, and how they are positioned in the market. A well-planned product line and product mix enable companies to cater to different customer segments, maximize market coverage, and capitalize on economies of scale.
Product positioning involves defining the product’s unique value proposition and how it is positioned in the minds of customers relative to competing products. This decision considers factors such as price, quality, features, and target market preferences. Effective product positioning helps differentiate the product and create a favorable perception among the target audience.
Product Life Cycle Management
Products go through various stages in their life cycle, including introduction, growth, maturity, and decline. Companies need to make decisions about managing the product at each stage. This may involve investing in product development and marketing during the introduction phase, expanding distribution during the growth phase, and implementing strategies to extend the product’s life cycle during the maturity phase.
Product Quality and Warranty
Product quality is a critical decision as it influences customer satisfaction, brand reputation, and repeat purchase behavior. Companies need to establish quality standards, implement quality control processes, and ensure consistent product performance. Additionally, decisions about product warranties and after-sales support are important in providing customer confidence and addressing potential product issues.
Product Innovation and Development
Companies need to continually innovate and develop new products to stay competitive and meet changing customer needs. Product innovation decisions involve identifying opportunities, conducting research and development, and introducing new products or product improvements to the market. This decision-making process includes assessing market potential, conducting feasibility studies, and managing the product development process.
Product Decisions Concept and Classification
Product decisions refer to the strategic choices made by a company regarding its product offerings. These decisions involve various aspects of the product, including its design, features, branding, packaging, and positioning. Product decisions play a crucial role in shaping the product’s appeal, value, and market success. They are influenced by factors such as customer preferences, market trends, competition, and business objectives.
Product decisions can be classified into several categories based on different perspectives.
Product Line Decisions
Product line decisions involve determining the range of products that a company offers under a specific brand or product category. These decisions include choosing the number of product lines, the breadth and depth of each line, and the relationship between the products within the line. For example, a company may offer multiple lines of smartphones, each catering to a different customer segment or price point.
Product Mix Decisions
Product mix decisions pertain to the entire portfolio of products offered by a company across different product lines. These decisions involve managing the combination of products in the company’s portfolio to meet customer needs, achieve market coverage, and optimize resource allocation. It includes decisions on adding or removing products from the mix, adjusting the product assortment, and balancing the profitability and growth potential of different products.
Product Design Decisions
Product design decisions focus on the physical appearance, structure, and functionality of the product. They include choices regarding the product’s shape, size, color, materials, features, and user interface. Product design decisions aim to create a product that is visually appealing, user-friendly, and aligned with customer preferences and market trends.
Branding decisions involve establishing and managing the brand identity of the product. They include decisions on brand name, logo design, brand positioning, brand personality, and brand associations. Branding decisions aim to create a distinct and recognizable brand image that resonates with the target market, builds customer trust and loyalty, and differentiates the product from competitors.
Packaging decisions pertain to the design and functionality of the product’s packaging. They include choices on packaging materials, size, shape, color, labeling, and information provided on the packaging. Packaging decisions aim to create attractive and informative packaging that protects the product, enhances its shelf appeal, communicates its value, and aligns with the brand image.
Product Positioning Decisions
Product positioning decisions focus on defining how the product is perceived in the minds of consumers relative to competing products. These decisions involve determining the unique value proposition of the product, its target market, and the key messages and positioning strategies to communicate that value. Product positioning decisions aim to create a favorable perception among the target audience and differentiate the product from competitors.
Product Development and Innovation Decisions
Product development and innovation decisions involve the process of creating new products or improving existing products. These decisions include identifying market opportunities, conducting research and development, managing the product development process, and introducing new products to the market. Product development decisions aim to meet changing customer needs, capitalize on emerging trends, and maintain a competitive edge.
Product Quality and Warranty Decisions
Product quality and warranty decisions focus on ensuring that the product meets or exceeds customer expectations. These decisions include establishing quality standards, implementing quality control processes, and offering warranties and after-sales support. Product quality decisions aim to build customer trust, enhance brand reputation, and minimize the risk of product failures or defects.
Levels of Product
The concept of levels of product refers to the different layers or dimensions of value that a product offers to customers. A product is not just a physical object but encompasses various additional elements that enhance its value and meet customer needs. The levels of product help marketers understand and design products that deliver superior customer value. The levels of product can be classified into five distinct levels: Core product, Generic product, Expected product, Augmented product, and Potential product.
The core product represents the fundamental benefit or value that customers seek when they purchase a product. It addresses the underlying need or problem that customers aim to solve. For example, the core product of a smartphone is the ability to stay connected and communicate with others conveniently.
The generic product refers to the basic features and functions that customers expect from a product category. It is the minimum set of attributes required for a product to be considered as part of that category. For instance, the generic product of a smartphone includes features such as voice calls, text messaging, internet browsing, and multimedia capabilities.
The expected product represents the attributes and features that customers typically expect from a product in a given market. These are the characteristics that customers consider as standard or normal for a product category. For example, customers expect a smartphone to have a high-resolution camera, long battery life, user-friendly interface, and access to popular applications.
The augmented product encompasses the additional features, services, and benefits that go beyond customer expectations and differentiate a product from competitors. These are value-added elements that enhance the overall customer experience. Examples of augmented product include warranty, after-sales service, technical support, free software updates, and loyalty programs offered by smartphone manufacturers.
The potential product represents the future possibilities and innovations that a product or product category may offer. It includes ideas, enhancements, and technological advancements that are not currently available but have the potential to be introduced in the future. For instance, in the context of smartphones, potential product features could include holographic displays, advanced artificial intelligence capabilities, or seamless integration with Internet of Things (IoT) devices.
To better illustrate these levels of product, let’s consider the example of a laptop:
The core product of a laptop is the ability to perform computing tasks, such as browsing the internet, creating documents, and running software applications.
The generic product features of a laptop include a keyboard, display screen, processor, memory, storage, and an operating system that allows users to perform various computing tasks.
Customers expect a laptop to have features like a high-resolution display, long battery life, sufficient storage capacity, fast processing speed, connectivity options (such as Wi-Fi and Bluetooth), and a reliable operating system like Windows or macOS.
The augmented product for a laptop could include additional features such as a backlit keyboard, touchscreen display, biometric security (e.g., fingerprint scanner), pre-installed software or applications, extended warranty, and technical support services.
The potential product of a laptop may include futuristic innovations like foldable screens, seamless integration with virtual reality or augmented reality technologies, enhanced battery life through advanced energy-efficient technologies, or voice-activated user interfaces.
Understanding the levels of product allows marketers to identify opportunities for differentiation and create value-added offerings that meet and exceed customer expectations. By considering each level, companies can develop comprehensive product strategies and deliver superior customer experiences in the marketplace.
Product Strategies refer to the deliberate and coordinated plans and actions taken by a company to develop, position, and manage its products in the market. Product strategies play a crucial role in achieving business objectives, meeting customer needs, and gaining a competitive advantage. Here are some key product strategies that companies often employ:
Product differentiation strategy involves creating unique and distinct features, benefits, or attributes in a product to set it apart from competitors. This strategy aims to position the product as superior or offering something that competitors don’t have. Differentiation can be achieved through product design, technology, performance, quality, packaging, branding, or customer service. By differentiating their products, companies can attract customers and command premium prices.
Product Line Extension
Product line extension strategy involves adding new products or variations to an existing product line to cater to different customer segments, needs, or preferences. This strategy allows companies to leverage the existing brand equity, distribution channels, and customer base. For example, a company that offers soft drinks may introduce new flavors or variations to target specific market segments and increase market share.
Product Portfolio Rationalization
Product portfolio rationalization strategy involves assessing and optimizing the company’s product portfolio by eliminating underperforming or low-profit products and focusing resources on high-potential or strategic products. This strategy helps streamline operations, reduce costs, and allocate resources more effectively. It ensures that the company’s product offerings align with its business objectives and target market demands.
Product innovation strategy involves developing new products or making significant improvements to existing products to address changing customer needs, technological advancements, or market trends. It can involve incremental improvements, breakthrough innovations, or disruptive innovations. Product innovation allows companies to stay relevant, attract new customers, and differentiate themselves in the market.
Product positioning strategy involves defining the desired perception and positioning of the product in the minds of target customers relative to competitors. It entails determining the unique value proposition, target market segment, and key messages to communicate. Effective product positioning helps differentiate the product, create a competitive advantage, and influence customer preferences and purchase decisions.
Product pricing strategy involves determining the appropriate pricing levels for products based on factors such as cost, competition, value, and market dynamics. Pricing strategies can include premium pricing, penetration pricing, price skimming, or value-based pricing. Pricing decisions should consider the product’s positioning, target market’s price sensitivity, and profitability objectives.
Product Lifecycle Management
Product lifecycle management strategy involves managing a product throughout its lifecycle, from introduction to growth, maturity, and decline. It includes continuous monitoring of market trends, customer feedback, and product performance to make timely adjustments and decisions. Companies may invest in product development and marketing during the introduction and growth stages, implement strategies to extend the maturity phase, and manage the decline phase through product phasing out or replacement.
Product Branding and Packaging
Product branding and packaging strategy involve creating a distinctive and appealing brand identity and packaging design that resonates with the target market. Branding and packaging decisions should align with the product’s positioning, target customer preferences, and brand image. Effective branding and packaging strategies enhance product recognition, differentiate it from competitors, and influence customer perceptions and purchase decisions.
Product Service and Support
Product service and support strategy focus on providing excellent customer service, technical support, warranties, and after-sales services. Companies aim to ensure customer satisfaction, build loyalty, and maintain long-term relationships. Effective service and support strategies contribute to a positive customer experience, word-of-mouth referrals, and repeat purchases.