We encounter goods and services on a daily basis, but it is unlikely that ordinary consumers have thought at least once about which path they go, from the idea and purpose of their creation, to production, transportation, advertising and promotion. For the marketer, the role of the product in marketing is of great importance, since this is the central object of his work, what every person needs in one form or another. All the most important aspects of the product are described in more detail in this article.
What is a product?
A product in marketing is, on the one hand, a means to satisfy human needs, on the other hand, a product created for sale. But, contrary to popular belief, this is not at all what came off the assembly line. This is a whole process, involving several important steps and huge marketing efforts by a marketer.
Product creation steps
The first step is to create a plan. The marketer conducts an analysis of the market and consumer needs and determines the functions of the product in marketing, what he could satisfy and what benefits to give the buyer.
The second step is the implementation of the idea. This is all about the implementation of goods - the purchase of materials, production, packaging, delivery, marketing methods, etc.
The third step is the use of a marketing mix. This is working with the market, competitors, flexible pricing, effective means of sales promotion, promotion policy (advertising, promotions, POS materials, etc.)
The main thing to keep in mind is that no matter how effective these steps may be, a product will not be successful if it does not fulfill its main function - satisfying human needs, which occurs due to some of its most important properties.
Consumer properties of the goods
Every marketer should know that a product in marketing is not only the product itself, but primarily the benefits that the consumer receives with the purchase:
- Functionality - whether the product carries useful functions for the consumer - quality or quantity, breadth of use, advantages during storage, transportation, delivery, etc.
- Demand - whether the product meets market demand, season, style or fashion.
- Reliability and durability - how long the product will last uninterruptedly, what service life it has, whether it is suitable for troubleshooting and repair, whether it has guarantees and after-sales service.
- Ergonomics is the convenience and comfort of its use, compliance with taste, visual, power and other physiological perceptions of a person.
- Aesthetics - compliance with the standards of society, style, fashion, sociocultural significance.
- Profitability - correspondence of price and quality.
- Environmental friendliness - safe use for the consumer and others.
These are the key features of the product in marketing, which allow the consumer to tip his choice in one direction or another. But not only the benefits and advantages form the demand, a lot depends on its varieties.
Product classification
Let's look at the principles by which a product is divided in marketing. These are several different classifications, the first of which is according to the duration of use:
- short-term - those that are consumed often and quickly (food, household chemicals);
- long-term - those that are consumed for a long time and are rarely purchased (real estate, clothing, jewelry, household appliances);
- services - household, transport, legal and others.
When creating a product, it is extremely important to understand which category it belongs to. For example, in the case of a short-term product, it is important to take into account physiological characteristics, taste or smell, but not necessarily fashion or durability. While for long-term use, longevity, warranty and product quality in marketing are key points.
Another classification divides goods by demand, these are:
- everyday goods - are purchased often, without hesitation and special efforts (food);
- pre-demand goods - are also purchased quite often, but after comparison with other goods (clothing);
- goods of exclusive demand - single samples, in the absence of which the buyer does not purchase others on the market, because they have no analogues;
- passive demand goods - those that may not be needed by the consumer, or he is not aware of their existence, but with proper promotion, demand arises for them;
- special demand goods - great efforts are made to search for and purchase them.
In addition to this classification, the structure of the product in marketing includes materials, components, raw materials, semi-finished products, various kinds of services, additional goods and much more, which helps to create a finished product and is partially included in its price.
And, of course, speaking of classification, one cannot fail to mention the following concept.
What is a new product?
A new product in marketing is a product with completely new properties for either an individual company or the entire market. Its classification has 6 categories:
- World novelty products - what is first released on the world market. The most obvious example is Apple, which launched the first iPad tablets on the market.
- A new product line is what is first produced on a company-wide scale. A fairly common situation in many industries, where the range is updated from time to time. For example, a toy company decided to produce clothes for children as well.
- The expansion of the product line is what updates or supplements an existing product - new flavors of chips, new packaging of yogurt, new packaging volumes of washing powder.
- Product update - improving the characteristics of existing products or adapting them to certain conditions. For example, a car manufacturing plant launches a new model, with a more advanced engine and automatic transmission. Or a company engaged in the production of ski clothing in the summer produces uniforms for tourists and hiking equipment.
- Repositioning - changing the position of a product or its target audience. For example, a design change towards a more youthful one in order to sell it to young people.
- Cheaper product - due to cost reduction, modification and improved production and (which is not the best option) the use of cheaper materials.
This concept of product in marketing allows you to maintain and strengthen market positions, occupy a new niche, exploit existing capacities and technologies, increase profits, expand your target segment and increase brand awareness.
But not only the introduction of a new product allows the company to take a leading position in the market. There are many other important steps.
Assortment policy
In order to take its rightful place in the market, it is important to determine the right product range. High quality product in marketing is far from the only requirement. Produced and marketed product must satisfy the demand and needs of customers, have a competitive price and a wide selection. Here are the basic requirements for the range:
- latitude - how many groups a given category of goods has (for example, the assortment of a dishware store includes plates, pans, pans, sets, etc.);
- depth - these are variations within groups (for example, the assortment group "pots" includes stewpots, ladles, ducklings, saucepan for fondue, etc.)
- saturation shows how many of these variations are quantitative;
- harmony - how much the products complement each other.
A complete product definition in marketing cannot do without a deep ABC assortment analysis. With its help they determine proportionally which product brings the greatest profit, and on the basis of these calculations form the optimal trading assortment.
Work with competitors
In addition to the correct set for sale, it is important to adequately assess your real market position. This is the essence of the product in marketing, it is considered in a complex - quality, breadth, competitiveness.
In order to assess whether a product is competitive, you must first analyze the market for similar products and firms that produce them. Then evaluate your strengths and weaknesses, identify product flaws, analyze your prices and competitors. As a result, a plan is drawn up on how to correct deficiencies, what to offer new or how to stand out among competing firms, what cost will be optimal and due to which costs can be reduced.
Marketing mix
In marketing, a product is understood as a complex of price, sales, assortment and promotion, or a marketing mix. About the assortment policy we described above.
To set prices, the most expensive method is used (based on the costs of production and sale of goods). Often, manufacturers use the price as a competitor, and vary it with discounts, promotions and other bonus programs. And very rarely in the case of exclusive goods, the manufacturer sets the price at his discretion.
Sales policy implies the search for optimal, efficient and economical sales channels, work with intermediaries, the creation of retail chains, distributors and more.
And, finally, the promotion includes all direct and indirect work with the consumer, from attractive packaging to the creation of the image and image of the company, direct advertising and bonuses for customers.
Product life cycle
A product in marketing is an ever-changing concept. Therefore, the marketer must clearly understand that even with the greatest efforts and investments in promotion, sooner or later each product has its ups and downs. In other words, your life cycle. It consists of 5 phases:
- product development - starting from the idea that appears in the head, ending with the creation of a business plan and promotion strategy;
- the creation and implementation of a product is a phase that often causes losses to the creator, because the consumer does not yet know the product, and it takes a lot of investments to test it on the market - production, rental, transportation, advertising, etc.
- product growth - at this phase, the efforts made bear fruit, and the consumer recognizes the product, which is accompanied by an increase in sales and profits;
- product maturity - a period of saturation when a large number of consumers are familiar with the product, and when the manufacturer has the maximum profit and practically does not spend money on maintaining the position of the product and its competitiveness;
- the recession stage is a glut of the product, consumers want something new, so profits are reduced, and the manufacturer is looking for ways to return to the peak of sales - creating a new product, promotion costs, promotions, etc.
Having gone through these stages, the product will not always be able to return again to the peak of sales. This is partly the job of the marketer - to be able to revive a product in a market where demand for it has disappeared.
How to occupy high positions in the market
There are a lot of marketing strategies for promotion , and there are an incredible number of factors that affect demand. This is price and quality, service, after-sales service, bonuses and discounts, a good assortment, compliance with fashion, style and much more.
The most common method of attracting customers is pricing, while a sharp drop in value does not always increase demand. For example, a surge in sales for essential goods will, on the contrary, cause a sharp increase in prices.
Another effective tool is advertising. But do not forget that it should be targeted to the target customer (for this you need to clearly understand who your audience is represented), be placed in the right place and at the right time.
Discounts, promotions, special offers, a bonus program are another effective tools for creating a rush demand for a product.
Often in marketing, a product is understood as a brand. Many consumers are willing to overpay only for the brand, because it is the guarantor of quality or demand. In this case, it is important not only to create a quality product, but also to ensure the image and recognition of the company.
Speaking of quality. This is also a very effective method of promotion, because a durable, worthy product will always find its consumer.
Much depends on the assortment, seller, seasonality, time and place of sale, number of offers, positive reviews and much more.
Instead of a conclusion
Everything that we buy, starting from food, and ending with the services we use, is a product. It has certain characteristics that affect our choice when buying - ergonomic, aesthetic, functional, economic and others. We acquire them, based on our own preferences, breadth of assortment, fashion, benefits, savings, durability. In many respects, the demand for a product determines the stage that a product passes on the market - introduction, growth, maturity or decline. This is the essence of the product in marketing.
The task of a marketer is using key marketing tools (sales, price, assortment and advertising) to promote a product on the market and ensure high sales and profits on it. If all these funds are weighed and correctly applied, the product will be more likely to occupy high positions in the market, which means it will last longer and become more competitive.