Session 1: Meaning and Importance of Product

 

Session 1: Meaning and Importance of Product

A product is anything offered to the market to satisfy a need or want, which can include tangible goods, services, experiences, places, and ideas. According to Philip Kotler, a product satisfies a need or want, while William Stanton views it as a combination of tangible and intangible attributes. Products are created to address customer needs and typically consist of both physical elements and psychological aspects like brand, image, and warranty.

Components of a Product

1.    Core Product: The fundamental function or benefit a product provides (e.g., Dove soap's moisturizing ability and fragrance).

2.    Associated Features: Additional elements that enhance the product’s appeal, such as fragrance or color.

3.    Brand Name: The identifier that differentiates a product from competitors.

4.    Logo: A symbol representing the brand, aiding in recognition and recall.

5.    Package: Protects the product, provides information, and boosts its aesthetic appeal.

6.    Label: Offers written details about the product, like its ingredients, features, and instructions.

Characteristics of a Product:

• Core element of the marketing mix.
• Includes both goods and services.
• Offers both tangible and intangible benefits.
• Drives customer satisfaction through its features and services, not just ownership.

Importance of Product:

• The product is central to all marketing activities.
• It is the starting point for planning marketing strategies.
• The main goal of marketing is to satisfy customer needs through quality products.
• Low-quality products have limited market longevity.

Product Levels: Marketers develop a product through four stages:

1.    Core Benefit: The fundamental purpose (e.g., a car’s convenience).

2.    Generic Product: The basic, unbranded version of the product (e.g., unbranded rice).

3.    Branded Product: Identified by a specific company brand.

4.    Differentiated Product: The product is distinguished from competitors (e.g., Knorr’s soups).

5.    Customized Product: Tailored to meet individual customer specifications.

6.    Augmented Product: Improved or enhanced features not expected by the customer.

7.    Potential Product: Future advancements and refinements.

Factors Influencing Product Mix:

1.    Market Demand: Determines the viability of producing a product.

2.    Cost: Lower-cost products may be introduced to compete with higher-priced ones.

3.    Production Quantity: Large-scale production may lead to expanding the product line.

4.    Advertising and Distribution: The addition of new products should align with existing marketing efforts.

5.    Residual Use: By-products can be used to develop new products.

6.    Competitor’s Actions: Firms may adjust their product lines based on competitor moves.

7.    Full Utilization of Marketing Capacity: New products may be introduced to fully utilize marketing resources.

8.    Goodwill: A company’s reputation can help ease the introduction of new products.

Product Terms/Decisions:

• Product Mix: The total range of products offered by a company, including breadth, depth, and consistency.
• Product Line: A group of closely related products.
• Product Positioning: The way a product is presented to meet specific customer needs.
• Product Repositioning: Changing a product to better suit a particular customer segment.
• Product Differentiation: Modifying a product to make it more attractive through quality, design, and support services.
• Product Diversification: Expanding the product range, either in depth or width.
• Product Modification: Altering the physical or packaging aspects of a product to meet changing demands.
• Product Standardization: Limiting the number of variations to ensure consistent quality.
• Product Elimination: Discontinuing products that are no longer viable or profitable.