As with all areas of business, decision-making in marketing is crucial. 'Product' is one of the 4Ps of the marketing mix. As a result, marketing managers must make countless decisions regarding the product or service they are trying to sell. What are the critical product mix and product line decisions? And how can we ensure that marketers make the appropriate decisions? Read along to learn all about product decisions. Show Product Decisions DefinitionLet's first examine the definition of product decisions. Product decisions are decisions to be made about the product or service a company wants to sell. These decisions are vital to creating a successful marketing mix to meet the company's objectives. Before we discuss the technical aspects of product decisions, let's quickly take a look at some examples of the types of decisions marketers might make. While making product decisions, marketers consider: 1. The core benefit of the product. For example:
While the core benefit stays more or less the same, customers' wants and needs can change over time, and thus the business must be prepared to adapt accordingly. 2. The nature of the product and service. The nature of Starbucks coffee is its ingredients, type of coffee, and cup size.
The nature of the product is what constitutes the product and should be developed according to the customer's needs and wants. 3. Augmented features. These extra services come with the product, such as guarantee, installation, customer support, and maintenance. Besides product quality, augmented features play an essential role in turning a new customer into a regular one. Product Decisions: Product Differentiation and USPA 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.
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:
For example, Apple is known for its innovative and high-performance MacBooks. However, this product attribute is only part of the company's success, as many other tech companies offer similar products. The MacBook's sleek design and user-friendliness (ease of use) differentiate the product from its competitors. 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). 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. Check out our explanations of brand management and brand awareness to find out more about the importance of branding. Product Decisions: Packaging and LabelingAnother 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? The primary function of packaging is to hold a product and protect it from damage. 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:
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 ServicesFinally, additional services also play an essential role in product decisions. Support services are additional services that customers benefit from when purchasing a product. 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 DecisionsThe next element marketers must consider when creating a product strategy includes product line decisions. A product line is a group of related products that function similarly and are sold to the same customer segment. 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):
Using the product life cycle Marketers can develop their product decisions by determining which stage a product is in during its life cycle. For example:
Marketers can use the extension method to maximize sales during the product life cycle. An extension strategy is a change in marketing activities to avoid decreasing sales. Some examples of extension methods:
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. A product mix is a company's portfolio of all the different product lines they offer. We can explore a company's product mix based on four different categories:
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. Product Decisions - Key takeaways
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