A companyâ€™s product is what it has to sell. Under the marketing concept philosophy, a product is viewed as a reservoir of satisfactions that accrue to its owner either from possession or use. These satisfactions are often more than functional and fulfill other needs such as aesthetic gratification, convenience, social status, psychological well being and so forth.
Prior to the adoption of the marketing concept philosophy the technological or engineering dimensions of a product were the primary focuses. Today, however, products are designed and marketed with a strong emphasis on the unique attributes and benefits (relative to price) which the physical product represents. Primary attention is placed on consumersâ€™ needs and wants at the planning and development stage. For example, Revlon does not just sell cosmetics; it also sells the promise of beauty and glamour. IBM sells more than technologically advanced office products; it also sells communication technologies plus reliability. In air travel, budget airlines, such as Peoles Express, are marketing transportation at lowest cost per-air mile while competitors are selling transportation plus convenience and personal comfort at a higher price.
A product is the companyâ€™s main link with the consuming public. In the marketing mix under the marketing concept philosophy, product is the critical element. A poorly conceived product, no matter how well it is promoted, priced, or distributed, will fail in the long run. The task of developing products and product lines and positioning them in the market place to maximize consumersâ€™ satisfaction is called merchandising.
Merchandising: The essence of product policy is forecasting all the dimensions of the environment along with consumer desires to determine the types of products the various market segments desire and then integrating these forecasts with an analysis of the firmâ€™s existing and non-existing marketing strengths, skills, resources.
A policy of product differentiation involves modifying particular product attributes with the goal of tapping a new market segment or enlarging demand in a current segment. Another rationale for this policy is to make a product more unique and less of a substitute for competing products as in the case of breakfast cereal manufacturers who promote such attributes as â€œmore fiber and less sugarâ€ â€“ ideas in vogue for the prevention of diseases as well as good nutrition.
Market segmentation recognizes the fact that markets are not homogeneous. It makes more marketing sense to talk about submarkets. Automobile manufacturers use this policy by producing sub-compacts, compacts, and mid-size, luxury models. Another example is in the food industry where the manufacturers of condiments, canned vegetables, and coffee produce institutional size packages. Here again the result is to broaden or deepen the product line.
Planned obsolescence is another product policy where the goal is to introduce, usually with superficial or minor variations, in order to get current owners to purchase the new model. The college textbook industry focuses on revisions every two or three years to reduce the impact of the used book market. Laundry detergent manufacturers introduce â€œnew and improvedâ€ versions periodically.
Product positioning strategy refers to the manner in which the product is targeted at specific consumer segments either through the intrinsic attributes of the product or through the image created for the product through promotion. The key product variables, e.g. style, durability, versatility, and package are paramount in matching product with a particular market segment. Giletteâ€™s â€œRight Guardâ€ was originally positioned as a deodorant for men but later was repositioned as a deodorant for the family. â€œTrading upâ€ is a strategy used to enhance the productâ€™s image to appeal to a more affluent and quality conscious market segment. Sears and JC Penney have done this by adding more expensive clothing lines carrying the name of a well known designer or celebrity.
For examples, some travelers will stay only at motels or hotels which have indoor swimming pools and/or saunas.
Product design, packaging and materials are three of the more important aspects of product strategy. Product design begins with marketing research. Emphasis should be on consumer needs; production requirement should not dominate. Packaging in this era of self selection for the product because aside from protecting the product it (1) gives information, (2) promotes,(3) often reduces selling costs, and (4) facilitates the use of the product. For example, Campbell Soup produces a single serving size can and many of the cans used to package products such as soups or chili have pull-off lids to eliminate the need for can openers.
Finally, a strategy related to all of them is benefit segmentation. This involves identifying a particular market segment which is highly sensitive to the presence of one or more key product attributes.