Product

Product Marketing Definition

To understand the role of product in the marketing mix, it is crucial to clearly define the term 'product' and explore the different types of products and services available.

Products & Services

Products or services are a company's offerings to the market. The goal of any marketing mix strategy is to create value for the customer, which in turn brings the company monetary profit. The core element of value creation is the product itself.

A product can be a pure tangible good such as bread or chocolate, with no additional service attached. Similarly, there are pure services, such as a dentist appointment, consultancy advice, or an x-ray, with no accompanying products. Between these two extremes are combinations of goods and services that companies turn into customer experiences. For example, Starbucks has turned the action of 'quickly grabbing a cup of coffee' into a personalised brand experience for customers.

Product Levels

Now that we understand what products are, let's look at the levels of products and services. The three distinct levels are depicted in Figure 1 and are as follows:

1. Core customer value: In this first product level, marketers must decide how a product can benefit consumers or solve a problem.

2. Actual product: This is where the core benefit is converted into a real, physical product by incorporating product features, packaging, branding, and quality.

3. Augmented product: The final stage is creating an augmented product by adding accompanying services and benefits on top of the core benefits. It might include after-sales services, technical support, warranty, or product returns or refunds.

Figure 1. Product Levels - StudySmarter

Product Classifications

Products can also be classified into various categories based on their functions and characteristics.

Consumer Products

Consumer products are products and services bought for personal consumption. Consumer products can be further divided into a few categories, as shown in Table 1 below.

Table 1. Consumer Products - StudySmarter

Industrial Products

Industrial products are purchased for further processing and can usually be found in business-to-business (B2B) environments. They include:

• Materials and parts - such as raw materials or components.

• Capital items - such as installations of equipment.

• Supplies and services - such as office supplies or maintenance supplies.

Product Strategy

An essential part of product decision-making in the marketing mix is to decide on individual products, product lines & mix. These decisions can add significant value to customers and make up a company's product strategy.

Product & Service Decisions

The first decision to make is about product attributes. Product attributes are vital as they help communicate a product's benefits to customers. Product attributes consist of:

• Product quality - is a deciding factor in achieving customer satisfaction (as influenced by product performance).

• Product features - are used to differentiate a product from competitors.

• Product style & design - create added value for customers based on their need and want.

The next step after product attribution decisions is branding. Branding can add more customer value by differentiating it further from the competitors. It also helps to strengthen brand relationships with customers.

Packaging is another critical factor in positioning and differentiating a product, especially in today's crowded marketplace. Unique and innovative packaging can create a competitive edge that helps the business generate more sales. Labelling and logos displayed on packaging further add to the brand's positioning. For example, logos can reinforce customer recall and can add personality to the product.

Finally, support services can make or break the entire customer experience. Marketers must carefully consider the services they want to offer alongside the product.

Product Line & Mix Decisions

As part of the product strategy, marketers also consider product line and product mix decisions.

When making product line decisions, marketers have to consider the product line length and the number of products in the product line. To do this, marketers have to thoroughly analyse which products are performing well and eliminate those not adding to the line's overall performance. There are two ways to expand a product line:

• Product line filling: Add more products to the current range.

• Product line stretching: Add more products beyond the current scope.

When a company develops multiple product lines, it has a product mix.

Regarding the product mix, a company has four crucial decisions to make:

• Product mix length - number of products within each product line.

• Product mix width - number of different product lines available.

• Product line depth - number of varieties available in each product line.

• Product mix consistency - how closely each product line is related.

Product Strategies Examples

Let's consider Procter & Gamble (P&G) as an example of product line strategies. P&G offers a wide range of product lines in food, hair care, oral care, and home care, among many others. To fill its hair care product line, the company could develop a new type of shampoo or conditioner that uses a different formula and add it to its current hair care product line. From another product strategy point of view, P&G could consider stretching its hair care line downward or upward. For instance, the company could develop a more affordable version of one of their shampoos targeted at young adults (stretching downward) or introduce a more expensive version of the shampoo targeted at people willing to spend more on exclusive hair care products (upward stretching).

Regarding its product portfolio, P&G offers a variety of product lines in food, hair care, baby care, etc. (mix width) and several brands within each line (mix length). For example, within its hair care line, a variety of brands like Pantene, Aussie, or Head & Shoulders are available for customers. Within Head & Shoulders, there are quite a few shampoo variations available. Let's consider its 'Supreme' product line, which involves the 'Supreme Anti-Frizz' and 'Supreme Colour Protect' Shampoos, signifying the depth of the product mix. Regarding the product mix consistency, its product lines are all consumer products sold through large retail outlets. However, each product line performs a different function for consumers.

Product for Marketing Mix

As briefly mentioned before, branding is a vital part of product decision-making in the marketing mix. How can marketers build strong brands? There are four main steps:

• Brand positioning: it is essential to have a clear positioning strategy for a brand so that consumers understand the offering. Brands can be positioned in three ways:

  • Based on product attributes - this is the lowest level of positioning whereby products are differentiated based on quality, style, or features.

  • Based on product benefit - this is the second level of positioning whereby products/brands are associated with the benefits they provide to consumers.

  • Based on beliefs and values - this is the highest level of positioning whereby brands connect with customers on an emotional level.

• Brand name: finding a suitable brand name can be tricky but can ultimately increase the success of a product. There are a few qualities that brand names should follow:

  • It should convey the benefits or features of the product,

  • It should be easy to recognise and pronounce,

  • It should be unique,

  • It should be extendable,

  • It should be translatable to different languages,

  • It should be legally protectable (i.e. finding a brand name that does not already exist).

• Brand sponsorship: there are four sponsorship options available for manufacturers. They include:

  • Being a manufacturer's brand,

  • Being a store brand,

  • Licensing,

  • Co-branding.

• Brand development: similarly, there are four brand development options (see Figure 2 below). They include:

  • Line extension - involves extending the current brand name by introducing new flavours, new sizes, etc., to the current product offering.

  • Brand extension - involves extending the brand name to suit a new product.

  • Multibrands - involves creating unique brand names for different products.

  • New brands involve creating a new brand name for a new product category.

Figure 2. Brand Development - StudySmarter