Product Decisions

Product Decisions: Product Differentiation and USP

A product's unique selling points are features that differentiate it from its competitors. In other words, it is what the business can offer but others can't. For instance, a product can be cheaper, safer, faster, chicer, more friendly, or visually appealing.

Product Attribute Decisions

One of the primary decisions marketers have to make involves decisions about product attributes. Product attributes are the characteristics and defining features of a product. They are individual product decisions and are as follows:

• Product quality decisions - The quality of a product is crucial for its marketing. It plays a key role in positioning as products can be positioned based on their high quality (e.g., high-performance luxury cars or high fashion clothing made from the best quality fabrics). Product quality is also essential for providing value to customers - a high-quality product can be a value-adding feature that results in customer satisfaction.

• Product feature decisions - Another element of product attributes are the product's features. Product features are crucial for differentiation. Adding additional features makes a product stand out from similar products offered by competitors. So, how do marketers know which product features to add? Through market research. Of course, adding a random product feature will not automatically guarantee success. However, market research can help companies gain insight into what customers actually want and need regarding a product, leading to higher customer satisfaction.

• Product design decisions - Similarly to product features, product design can help marketers differentiate their offerings from competitors. For example, a functional design can make it easier for customers to use a product, leading to fewer complaints, returns, etc. On the other hand, product style can capture customers' attention.

Individual Product Decisions

Now that we have covered product attribute decisions let's look into other individual product decisions. Individual product decisions refer to decisions marketers must make about one particular product or service. They include decisions about the product's attributes, branding, packaging, and the additional services attached to the product (see Figure 1 below).

Product Decisions: Branding

After product attributes, the following key decision marketers must make involves product branding. Should we use the same logo? Will we use the same brand name? We will cover the answer to these questions in more detail later in the explanation, but for now, let's look at the importance of branding.

The brand name, logo, slogan, etc., are key features that help customers identify a product. Branding can add more customer value by further differentiating a product from the competitors. It also helps strengthen customer relationships as customers attach meaning and develop emotional connections with brands.

Product Decisions: Packaging and Labeling

Another product decision marketers must make includes packaging. What kind of packaging will we use to make our product stand out? Can we use a particular type of packaging to differentiate our product from similar products on the supermarket shelf?

However, due to the nature of today's competitive environment - high competition and numerous similar product offerings - packaging plays an essential role in product differentiation. Marketers can differentiate packaging based on:

• Functionality - Relates to the convenience of removing the packaging and using the product. Functionality is especially relevant when using online distribution channels. Customers do not want to receive dozens of boxes and plastic wrappers when shopping online.

• Design - Some brands might add quirky or colorful designs to their packaging to grab customers' attention. For example, certain chocolate and tea products are packaged in colorful boxes with floral designs.

• Branding - A Starbucks cup is recognizable (Starbucks logo on a white paper cup) due to the branding on its packaging.

• Safety - Food products are packaged in ways that avoid spillage or contamination.

Another essential product decision element is labeling. Most brands add logos and labels to their products, which adds to their branding. For example, Nike labels its products with its iconic check mark, adjusted to fit each product's size. On the other hand, food and beverages legally have to be labeled with an ingredient list. These regulations are in place to protect customers.

Product Decisions: Additional Services

Finally, additional services also play an essential role in product decisions.

Companies often pair support services with products to increase the value they bring to the customer. Support services can be of significant value, like helping a company integrate a new software system into its operations after purchasing a new software. On the other hand, support services can be minor, like offering free returns on products purchased online. Support services like post-sales communications can help a brand strengthen its customer relationships.

Product Line Decisions

The next element marketers must consider when creating a product strategy includes product line decisions.

One key consideration in product line decisions involves product line length. We can quantify the length of a product line by examining the number of products in one particular product line. Marketers must assess product line length from time to time to see whether any adjustments need to be made.

A product line may be too long with certain products that do not bring the company much revenue. This is often due to products being saturated or reaching the end of their life cycle. In this case, the marketer must evaluate which products to remove from the product line. On the other hand, a product line may be too short. Short product lines are those with the potential to bring the company additional profit. Marketers might consider adding new products to increase sales and revenue if a short product line is performing well in the market.

There are two methods for extending a product line (see Figure 2 below):

1. Product line filling - Filling means adding more products to the current product line or range. For example, offering different beverage flavors or producing the same shirt in a different color.

2. Product line stretching - Stretching involves adding more products beyond the existing range. For example, if Apple decided to release a budget version of its MacBook Pro, it would be an example of a downward product line stretch. However, if shampoo manufacturer Head & Shoulders decided to sell a luxury version of their shampoo, it would be an upward product line stretch.

Product Mix Decisions Example

Finally, let's take a closer look at product mix decisions. Many companies, particularly larger retailers, have multiple products and product lines. The collection of these product lines is known as a product mix.

We can explore a company's product mix based on four different categories:

1. Mix width - refers to the number of product lines a company has. For instance, Coca-Cola has three main product lines: soft drinks, Minute Maid, and mineral water.
2. Mix length - refers to the number of products within each product line. For example, Coca-Cola offers various products like Coca-Cola Zero or Diet Coke in its soft drinks product line and Glaceau Smartwater and Dasani within its mineral water product line.
3. Product line depth - refers to the number of varieties available in each product line. For example, Coca-Cola offers cherry, vanilla, and lemon flavored Coca-Cola, in addition to its original flavored beverages.
4. Product line consistency - refers to how closely each product line is related. We refer to consistency in terms of the actual product line itself, its distribution, production, etc. Following the previous example, Coca-Cola's product line is consistent as all of its brands offer a type of beverage.

As a result, marketers have to make various types of product decisions. Through product decisions, marketers can add value to customers and strengthen customer relationships through their offerings. However, it is also essential to periodically review product decisions to minimize the risks of losses or losing out on potential profit.