Summary
Highlights
A product is anything offered to the market to satisfy a need or want, encompassing goods, services, events, persons, places, organizations, and ideas. Services are intangible activities, benefits, or satisfactions offered for sale that do not result in ownership. Most modern products are a hybrid of tangible and intangible elements. The word 'service' also refers to activities performed by sellers to aid in product exchange.
Products can be understood at three levels: the core product (the basic benefit or problem-solving service), the actual product (the tangible features, design, quality, brand name, and packaging), and the augmented product (additional services and benefits like warranty, support, and accessories).
Products are broadly classified into consumer products (bought by final consumers for personal consumption, categorized into convenience, shopping, specialty, and unsought products) and industrial products (purchased for further processing or use in business, including materials and parts, capital items, and supplies and services).
Marketers have broadened the concept of offerings to include organizational marketing (creating positive attitudes towards an organization), person marketing (building a personal brand), place marketing (attracting people to a specific location), and idea marketing (social marketing to influence behavior for societal well-being).
Developing a product involves defining its attributes (features, benefits, uses, quality, style, design). Branding identifies and differentiates products. Packaging involves designing the container and can serve primary, secondary, and tertiary functions. Labeling provides information about the product, its use, and its ingredients, and also promotes the brand.
A company's product mix is defined by its width (number of different product lines), depth (number of items within each product line), and overall mix (all products and items offered).
Services have four key characteristics: intangibility (cannot be physically touched), inseparability (produced and consumed simultaneously, requiring customer-provider interaction), variability (quality depends on who provides it and when/where), and perishability (cannot be stored for later use).
Service marketing involves external marketing (company to customers, making promises), internal marketing (company to employees, enabling promises), and interactive marketing (employees to customers, delivering promises). This model ensures that promises made are promises kept, leading to customer satisfaction.
Branding strategies include generic brands, manufacturer brands (owned by the producer, building customer loyalty and prestige), and private/store brands (owned by retailers or wholesalers, offering value and bargaining power).
Further branding strategies include individual brands (different names for different products, e.g., Pringles by Kellogg's), family brands (multiple products under one brand name, e.g., Mr. Clean products), and combination brands (mixing manufacturer/private and family/individual brands, e.g., Kellogg's Raisin Bran).
Brand equity is the differential effect knowing the brand name has on customer response and actions. High brand equity comes from positive consumer perceptions, willingness to pay a price premium, and leads to greater profitability. Brand value is the total financial value of a brand.
Companies employ several brand development strategies: line extension (extending an existing brand into new forms in the same product category), brand extension (extending an existing brand name to a new product category), multi-branding (offering multiple brands in the same product category to appeal to different segments), and new brands (creating a new brand name for a new product category or when existing brands are declining).
Effective brand management requires continuous communication of brand positioning, customer-centric training for employees, and regular auditing of brands to assess strengths and weaknesses, adapt to customer preferences, and respond to competitors.