Chapter 08 - Setting Product Strategy

 




When marketers develop their marketing plan, they give considerable weight to the product strategy which is one of the most important aspects of the marketing plan. Since every marketer’s ultimate objective is to reach their target markets with their offerings with high quality and value to satisfy customers’ requirements. The “Product (offering) can be described as any kind of a thing that can satisfy customers’ needs and wants. That offering can be product, service, experience, information, organization etc. At this point, marketers focus on product concept rather than the production concept which concentrates on the enhancement of quality, features, innovations etc. These enhancements will vary based on the type of offer and its features.

 

Five levels of a product

Any kind of offering has different levels of its creation with value additions. When marketers develop the product, they initially start with the core product and then add features and value additions based on the customer preferences. At a certain stage, marketers try to exceed the expectations of the customers and sometimes go beyond that level and will develop a product which has all the transformations in future.




Marketers must decide at which level they are going to offer the product to their customers. If it is a new product, then initially they can introduce the product to the market at the expected product level which has the attributes the customers usually expected. If it is an existing product but need to have a strategy to sell it more, then the company can develop the product to the Augmented level or the last level which is potential level to deliver the product with exceeded customer expectations and future transformations in the product. Because customers’ needs and wants are changing rapidly due to different reasons. Hence, marketers need to periodically examine the requirements of the customer and customize the offerings as required in order to beat the competition in the market. Marketers usually do not offer their products only to retail customers, but they offer their products to business customers also (B2C and B2B). It is then crucial to pay attention to both retail and business customers and their requirements to construct a solid product strategy to meet those requirements accordingly.

 

How customers differentiate products and services

Products

Services

Product form

Ordering ease

Features

Delivery

Packaging

Installation

Quality

Customer consulting

Durability etc.

Maintenance and repair etc.

 

 

Before constructing the product strategy, it is important to understand the present situation of the product portfolio. Marketers can use Boston Matrix (BCG Matrix) to understand the exact position of their product portfolio and to take decisions on where to invest, what to avoid, and how to develop the portfolio. After identifying the exact position of the product portfolio, marketers can develop a distinct marketing strategy to move their product portfolio to profitable positions.

 


When developing the product strategy, product packaging is should also be considered as an important factor since it is a factor that is used by customers to differentiate the products. The marketers consider the packaging as the fifth P of marketing mix since it has a greater impact on the product. Most of the time, packaging will be the main identification tool of the product for the customer over the competitors’ offerings. Some customers are willing to pay more for packaging since they feel the convenience, appearance, prestige etc. of successful packaging.

 

However, marketers must concentrate on developments and innovations regarding product features rather than increasing the quantity of the products to increase sales and profits. Because todays’ customers expect something more than a product for their money.

 

My opinion on packaging materials and waste

According to the marketers’ point of view, packaging is the 5th element of marketing mix since it has a greater impact on the product’s promotional activities. Handy, convenient, and durable packaging will attract more customers to the product, and it helps the customers to identify the product from competitor products. Most of those packaging was made of polyethylene, plastics, or paper and 99% of those packaging was dumped as garbage at the end of the day. This is a critical issue in terms of environmental pollution because, polyethylene and plastics increase the environmental pollution and lead to lot of health issues in the society. However, packaging is essential to protect the product from any external damages or contaminations. Companies invest huge amount of money on packaging material since it is essential to promote and protect their products. Anyway, due to critical environmental issues persist in the society, companies need to re-think of their packaging items and their materials and try to use environmental-friendly materials for packaging as a part of their corporate social responsibility towards the society. Because packaging cannot be eliminated from the product and there are some products which need special attention on packaging and company cannot go beyond the framework to use environmental-friendly options. Hence, in some countries, companies take different approaches to mitigate this issue.

 

 

Example

Environmental pollution is a critical issue in Sri Lanka due to the high usage of plastics and polyethylene packages. The government has taken several steps to mitigate the problem, but the issue is alive. One leading tea producing company has taken the initiative to reduce the environmental pollution by using their packages. Since, they produce Ceylon Tea to the market they need to follow certain standards when packing their products. Hence, they cannot eliminate using polyethylene to reduce pollution. Instead of that, they asked their customers to recycle their tea packets by using them to grow some plants like vegetables which are useful for daily use, as a home garden. They introduced this via TV channels and other social media channels by using celebrity characters like cricketers, actresses and modelers as a part of their Corporate Social Responsibility towards the society.




 

References

1.      Avgeropoulos, I. (n.d.). Marketing Planning: Setting Product Strategy (PPT) Chapter 8 - Setting Product Strategy.pptx (sharepoint.com)

 

 

 

Comments

Post a Comment

Popular posts from this blog

Chapter 06 - Identifying Market Segments and Targets, Positioning

Image
  Success of a business can be derived from implementing the correct marketing strategy at the correct time to the correct set of customers with the desired value to them. To construct a good marketing strategy marketers should be able to identify their distinct target market through number of customer segments in the market. Identifying the correct target market segment is not an easy task. Because different individuals have different requirements and perceptions on their needs. We are in the 20 th century, and it is further difficult to understand the real requirements of the customers with the development of new technology and different generations in society. Example The family lives of our parents or grandparents were totally different from ours. During their era, they had limited requirements and they fulfilled them with the available products and services at that time, but they enjoyed their lives. But today, we are in an environment where everyone’s life is complex and the
Read more

Chapter 04 - Creating Customer Value, Satisfaction and Loyalty

Image
  We are living in a digital era, in which almost everything is digitalized. Rapid developments in technology do immense innovations and conversions to the old-fashioned processes and procedures to develop new versions of products and services to make the customers feel comfortable and have a n ew experience. The latest version of marketing is to create customer value through the organization’s products and services. Customers always expect a product or service that gives them their desired perceived value for their money. Sometimes they use their past experiences to measure the quality of the marketers’ offerings. That so-called perceived value may depend on person to person based on their buying behavior and other individual factors . As marketers, their new assignment is to identify the real requirements of the customers and tailor-made their existing product line with the expected value to satisfy the customers’ needs.      Different ways to add value to the customer  
Read more

Chapter 10 - Managing Retailing, Wholesaling, and Logistics

Image
  Any kind of business transaction involves different parties who add values to the product or service at the end of the process. The number of parties will vary based on the industry. In some industries, the producer directly contacts the customer to do the transaction. But in most instances, one more intermediary will take part in the process to add value to the offerings if the producer does not have the possibility to do so. Hence, the role of marketing intermediaries is significant in the process of meeting the producer and the end customer.   Marketing intermediaries Agents Distributors Wholesalers Retailers   In this chapter I mainly focus on the roles of wholesalers and retailers and their future with the development of seamless transactions.   Retailers The duty of the retailer includes all the activities involved in selling goods or services directly to the end customers for their personal, but not for business use. The main transaction ends at this poi
Read more