In last Lesson we discussed the concept of the marketing mix elements.
We had a detailed view
about the classification of the product today we will continue with same
topic i.e. Product.
A. Individual product decisions
We will focus on the important decisions in the development and
marketing of individual products
and services. These decisions are about product attributes, branding,
packaging, labeling, and
product support services. Companies have to develop strategies for the
items of their product
lines. Marketers make individual product decisions for each product
including: product attributes
decisions, brand, packaging, labeling, and product-support services
decisions. 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.
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
a) Product Attributes
Developing a product or service involves defining the benefits that it
will offer. These benefits are
communicated to and delivered by product attributes such as quality,
features, style and design.
i. Product Quality
Quality is one of the marketer's major positioning tools. Product
quality has two dimensions—
level and consistency. In developing a product, the marketer must first
choose a quality level that will
support the product's position in the target market. Here, product
quality means performance
quality—the ability of a product to perform its functions
beyond quality level, high quality also can
mean high levels of quality consistency. Here, product quality
means conformance quality—freedom
from defects and consistency in delivering a targeted level of
performance. All companies should
strive for high levels of conformance quality.
ii. Product Features
A product can be offered with varying features. A stripped-down model,
one without any extras, is
the starting point. The company can create higher-level models by adding
more features. Features
are a competitive tool for differentiating the company's product from
competitors' products. Being
the first producer to introduce a needed and valued new feature is one
of the most effective ways
How can a company identify new features and decide which ones to add to
its product? The
company should periodically survey buyers who have used the product and
ask these questions:
How do you like the product? Which specific features of the product do
you like most? Which
features could we add to improve the product? The answers provide the
company with a rich list
of feature ideas. The company can then assess each feature's value
to customers versus its cost to the
company. Features that customers value little in relation to costs
should be dropped; those that
customers value highly in relation to costs should be added.
iii. Product Style and Design
Another way to add customer value is through distinctive product
style and design. Some companies
have reputations for outstanding style and design. Design is a larger
concept than style. Style simply
describes the appearance of a product. Styles can be eye catching or
yawn producing. A sensational
style may grab attention and produce pleasing aesthetics, but it does
not necessarily make the
product perform better. Unlike style, design is more
than skin deep—it goes to the very heart of a
product. Good design contributes to a product's usefulness as well as to
Good style and design can attract attention, improve product
performance, cut production costs,
and give the product a strong competitive advantage in the target market
Perhaps the most distinctive skill of professional marketers is their
ability to create, maintain, protect, and enhance brands of their
products and services. 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. For example, most
consumers would perceive a bottle of White Linen perfume as a
high-quality, expensive product. But the same perfume in an unmarked
bottle would likely be viewed as lower in quality, even if the fragrance
were identical. Branding has become so strong that today hardly anything
goes unbranded. 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.
A brand is a name, sign, symbol, or design, or a combination of
these that identifies the
maker or seller of a product or service.
ii. Brand equity
is the value of a brand, based on the extent to which it has high brand
loyalty, name awareness,
perceived quality, strong brand associations, and other assets such as
patents, trademarks, and
channel relationships. Powerful brand names command strong consumer
preference and are
powerful assets. Perhaps the most distinctive skill of professional
marketers is their ability to
create, maintain, protect, and enhance brands. Measuring the actual
equity of a brand name is
difficult. However, the advantages of having it include:
1). High consumer awareness and loyalty.
2). Easier to launch brand extensions because of high brand credibility.
3). A good defense against fierce price competition.
4). It is believed to be the company’s most enduring asset.
Customer equity tends to aid
marketing planning in assuring loyal customer lifetime value.
iii. Selecting The Brands Name:
Selecting a brand name is an important step. The brand name should be
carefully chosen since a
good name can add greatly to a product’s success. Desirable qualities of
a good brand name
1). It should suggest something about the product’s benefits and
2). It should be easy to pronounce, recognize, and remember.
3). It should be distinctive.
4). It should translate easily into foreign languages.
5). It should be capable of registration and legal protection. Once
chosen, the brand name
must be protected.
iv. Sponsorship options for Branding:
A manufacturer has four sponsorship options:
1). A manufacturer’s brand (or national brand) is a
brand created and owned by the
producer of a product or service (Examples include IBM and Kellogg).
2). A private brand (or middleman, distributor, or store brand)
is a brand created and
owned by a reseller of a product or service.
3). A licensed brand (a company sells it’s output under
another brand name).
4). Co-branding occurs when two companies go together
and manufacture one product
(General Mills and Hershey’s make Reese’s’ Peanut Butter Puffs cereal).
Combined brands create broader customer appeal and greater brand equity.
It may allow a company to expand its existing brand into a category it
might otherwise have
difficulty entering alone. But at the same time there are certain
disadvantages of combine branding
Complex legal contracts and licenses are involved.
Coordination efforts are often difficult.
Trust is essential between partners. It is often hard to come by.
At one time manufacturer’s brands were the most popular and profitable.
Today, however, an
increasing number of private brands are doing well. Though hard to
establish and maintain,
private brands can yield higher profit margins. “The
battle of the brands” (the competition
between manufacturer’s and private brands) causes resellers to have
advantages, and they charge
manufacturer’s slotting fees (payments demanded by retailers
from producers before they will
accept new products and find “slots” for them on the shelves). As store
brands are improving in
quality, they are posing a stronger threat to the manufacturer’s brands.
This is especially true in
v. Branding Strategy:
A company has four choices when it comes to brand strategy.
1). Introduce line extensions. Existing brand names are
extended to new forms, sizes, and
flavors of an existing product category. A company might introduce line
extensions as a low-cost,
low-risk way of introducing new products in order to:
a). Meet consumer desires for variety.
b). Meet excess manufacturing capacity.
c). simply command more shelf space.
a). An overextended brand might lose its specific meaning.
b). Can cause consumer frustration or confusion.
2). Introduce brand extensions. Existing brand names are
extended to new or modified
product categories. Advantages include:
a). Helps a company enter new product categories more easily.
b). Aids in new product recognition.
c). Saves on high advertising cost.
3). Introduce multibrands. New brand names are
introduced in the same product
category. Advantages include:
a). They gain more shelf space.
b). Offering several brands to capture “brand switchers.” The company
flanker or fighter brands to protect its major brand.
c). It helps to develop healthy competition within the organization.
a). Each brand may only obtain a small market share and be unprofitable.
4). Introduce new brands. New brand names in new
categories are introduced.
a). Helps move away from a brand that is failing.
b). Can get new brands in new categories by corporate acquisitions. Some
are now pursuing mega brand strategies.
Drawbacks can include:
a). Spreading resources too thin.
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).
Labeling, printed information
appearing on or with the package, is also part of packaging.
Traditionally, the primary function of the package was to contain and
protect the product. In
recent times, however, numerous factors have made packaging an important
Increased competition and clutter on retail store shelves means that
packages must now perform
many sales tasks—from attracting attention, to describing the product,
to making the sale.
Companies are realizing the power of good packaging to create instant
consumer recognition of
the company or brand. Developing a good package for a new product
requires making many
decisions. First, the company must establish the packaging concept,
which states what the package
should be or do for the product. Should it mainly
offer product protection, introduce a new
dispensing method, suggest certain qualities about the product, or
something else? Decisions then
must be made on specific elements of the package, such as size, shape,
materials, color, text, and
brand mark. These elements must work together to support the product's
position and marketing
strategy. The package must be consistent with the product's advertising,
pricing, and distribution.
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
e) Product Support Services
Customer service is another 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. Later in the
chapter, we will discuss services as products in themselves. Here, we
discuss product support services—
services that augment actual products. More and more companies are using
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. For example, Cadillac holds regular
focus group interviews with
owners and carefully watches complaints that come into its dealerships.
From this careful
monitoring, Cadillac has learned that buyers are very upset by repairs
that are not done correctly
the first time.
Once the company has assessed the value of various support services to
customers, it must next
assess the costs of providing these services. It can then develop a
package of services that will both
delight customers and yield profits to the company.