| Product | | Price |
| Promotion | | Place |
| Product
Levels | | Product Life Cycle | | Branding
| | Talk Topic | | Bottom of Page |
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What is a "Product?" |
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A product
is anything offered for attention, acquisition, use, or consumption that might satisfy a
want or need. Products can be physical objects,
services, persons, places, organizations, and ideas. |
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You will sometimes hear the
phrase "goods & services," which is just another way of saying
"product." |
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A Sony CD player, a Supercuts
haircut, a Billy Joel concert, a GMC truck, advice from an attorney, and a Hawaiian
vacation are all products. |
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Services are products that
consist of activities, benefits, or satisfactions that are offered for sale. |
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Goods are physical, tangible products; services are
intangible products.
Services do not result in the ownership of anything
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A product exists on three
basic levels: |
| Product planners need to think about the product on three levels: 
The core product -- what is the buyer really
buying? The core product refers to the use, benefit, or
problem solving service that the consumer is really buying when purchasing the product,
i.e. the need that is being fulfilled.
The actual product
is the tangible product or intangible service that serves as the medium for receiving core
product benefits:
Quality refers to product performance.
Features include
combinations of product attributes.
Styling refers to the
design, aesthetic, or ergonomic aspects.
The Brand
name helps consumers position and identify the product.
Packaging protects and
promotes.
The augmented product
consists of the measures taken to help the consumer put the actual product to sustained
use, including installation, delivery & credit,
warranties, and after-sale
service. |
An automobile offers personal transportation (core
product), has many different features and attributes (actual product), and may include a manufacturer's warranty or
dealer's discounted service contract (augmented
product). |
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A product,
therefore, is more than a simple set of tangible features. Consumers tend to see
products as complex bundles of benefits that satisfy their needs. |
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Augmentations soon become expected benefits.
For example, hotel guests now expect cable TV, trays of toiletries, and other
amenities in their rooms.
This means that competitors must search for
still more features and benefits to distinguish their offers.
As companies raise the prices of their
augmented products, some competitors can go back to the strategy of offering a more basic
product at a much lower price.
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Today, most
competition takes place at the product augmentation
level. Successful companies add benefits to their offers that not only will satisfy,
but also will delight the customer. |
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However, these
augmentations cost money, and the savvy marketer has to ask whether consumers will pay
enough to cover the extra cost. |
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Market segments that
are price-sensitive may look for simpler offerings in order to save money. Remember
the adage "keep it simple?" Well, sometimes that's the best way to
establish a unique presence in the marketplace -- just ask Tom Boudette at Motel 6! |
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| The "KISS" Method -- Keep
It Simple,
Stupid! |
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The
Product Life Cycle Concept |
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A product has a
finite life. We would be hard-pressed to identify any product older than five years
that exists today in its original form. Although many simple products appear to
change little, if at all, closer scrutiny would show that at least one aspect of the
product has changed over time. |
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It is a generally
accepted statement that 90% of the products we use today did not exist in their current
form five years ago. Similarly, 90% of the products we will be using five years from
now do not currently exist. Whether this statement is entirely accurate or not, we
can all identify products that have changed from their original form and/or content.
And, with today's rapid changes in technology, almost every product will undergo some sort
of modification during its lifetime. |
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This idea is
demonstrated by the Product Life Cycle (PLC)
concept, which shows the path a typical new product takes from its inception to its
discontinuation. The PLC can be applied to specific industries
(e.g. transportation), product classes
(e.g. automobiles), product forms (e.g.
station wagons), or a particular brand (e.g.
the Ford Taurus). |
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Of course,
manufacturers want to establish the appearance of offering a long-standing,
consumer-tested product; as this evokes trust and promotes routine purchase behavior.
Perhaps the best way to achieve this is through the use of brands.
So, even though the product may have changed, the brand tends to remain constant. |
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Companies view a brand as an
important part of a product, and branding can add value to a product. |
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Branding has become a major issue
in product strategy. On the one hand, developing a branded product requires a great
deal of long-term marketing investment, especially for advertising, promotion, and
packaging. |
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On the other hand, most
manufacturers eventually learn that the power lies with the companies that control the
brand names. For example, brand name clothing, electronics, and computer companies
can replace their Taiwanese producers with cheaper sources in Malaysia and
elsewhere. The Taiwanese producers can do little to prevent the loss of sales to
less expensive suppliers. |
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Japanese and South Korean
companies, however, have not made this mistake. They have spent heavily to build up
brand names, such as SONY, Panasonic, JVC, Goldstar, and Samsung. Even when these
companies can no longer afford to manufacture their products in their home countries,
their brand names continue to command customer loyalty. |
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Companies that develop brands
with a strong consumer franchise are insulated from competitors' promotional strategies.
Thus, companies around the world invest heavily to create strong national or even
global recognition and preference for their brand names. |
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Most consumers would perceive a bottle of White
Linen perfume as a high-quality, expensive product. But the same perfume in an
unmarked bottle would likely be perceived as lower in quality, even if the fragrances were
identical.
Manufacturers often find it easier and less
expensive simply to make the product and let others do the brand building. For
example, Taiwanese manufacturers make a large amount of the world's clothing, consumer
electronics, and computers, but these products are exported and sold under non-Taiwanese
brand names.
Consumers are loyal to brands,
not to producers. Those who control the brands, control the market.
Powerful brand names have consumer franchise -- they command strong customer
loyalty. A sufficient number of customers demand these brands and refuse
substitutes, even if the substitutes are offered at somewhat lower prices.
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Brands provide recognizable symbols: |
A brand
is a name, term, sign, symbol, or design, or a combination of these, intended to identify
the goods or services of one seller or group of sellers, and to differentiate them from
those of competitors. In other words, a brand identifies the maker or seller of a
product.
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"Engineered like no other car in the world"
Mercedes buyers value safety, high performance, and
prestige.
Consumers might visualize a Mercedes as being a wealthy,
middle-aged business executive.
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Perhaps the most distinctive
skill of professional marketers is their ability to create, maintain, protect, and enhance
brands. |
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A brand is a seller's promise to
deliver consistently a specific set of features, benefits, and services to buyers.
The best brands convey a warranty of quality. |
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A brand can deliver four levels
of meaning: A brand first brings to mind certain product attributes. For example, Mercedes suggests
such attributes as "well engineered," "high prestige,"
"expensive," and "high resale value." The company may use one or
more of these attributes in its advertising for the car, providing a positioning platform
for other attributes.
Customers do not buy attributes, they buy benefits. Therefore, attributes must be
translated into functional and emotional benefits. The attribute
"durable" could translate into the functional benefit, "I won't have to buy
a new car every few years." The attribute "expensive" might translate
into the emotional benefit, "The car makes me feel important and admired."
A brand also says something about the buyer's values. A brand marketer must identify the
specific groups of buyers who values coincide with the delivered benefit package.
A brand also projects a personality.
Motivation researchers sometimes ask, "If this brand were a person, what kind
of person would it be?" The brand will attract customers whose actual or
desired self-images match the brand's image. |
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Brands provide endearing, and enduring, corporate images: |
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A powerful brand has high brand equity, or "the value of a brand, based
on the extent to which it has high loyalty, name awareness, perceived quality, strong
personality associations, and other assets, such as patents, trademarks, and customer
relationships." |
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Successful brands have established
recognizable images that allow consumers to readily identify and distinguish the product
from all others, often from a considerable distance. Consider, for example, how far
away you can be and still recognize the Coca-Cola
"disk" or the Kodak "K"
logos. 
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Successful images are those that can withstand
the test of time. This "timeless" characteristic helps to implant and
reinforce the image in the mind of the consumer, and provides continuity. The
implication is that the brand has been around for a long time, and can, therefore, be
trusted to deliver consistent quality. |
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The Morton Salt company has recognized the
value of a corporate symbol. The company is currently celebrating 150 years of
existence, and is using their famous Umbrella Girl to promote this fact (even though she
has only been around since 1914). In fact, the company believes the Umbrella Girl
provides such a recognizable symbol that they have updated her look periodically to keep
pace with changing consumer styles. Even though the Umbrella Girl has changed, she
still carries the same overall look and "feel" -- "When it rains, it
pours." 
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| My how she's changed . . . Over the years, the ageless Morton Umbrella Girl has been given new
dresses and hairstyles to keep her fashionable. First appearing in 1914, she has
been updated in 1921, 1933, 1941, 1956, and 1968. |
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Copyright ©1997 Morton
International, Inc. All rights reserved.
®Registered trademark Morton International, Inc.
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If you had been put in a time
capsule in, say 1921, and emerged today, one of the first things you might do is visit a
grocery supermarket. Do you think you would recognize the Morton Salt brand of
today, based on your image of the product in 1921? |
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