BUS203: Principles of Marketing

With every product, regardless of where it is in its lifecycle, there are certain key decisions that must be made, perhaps repeatedly. These decisions include specifying product features, package design, branding decisions, establishing related services, and legal considerations. Although these decision areas are discussed separately, it should be noted that they all interact with one another, and are monitored and modified when necessary throughout the life of the product.

Product Features In a functional sense, the key question is: "Does the product do what the consumer wants it to do?" Does it get clothes clean? Does it quench your thirst? Does it save you money? Some of these questions can be answered only through product research, but consumer research provides more answers.

While the development of ultra-high-speed photographic film was a research breakthrough, how the consumer perceives this benefit can be answered only by the consumer. It is possible that the product benefit is so great that it overwhelms the consumer or it is not believed by the consumer. Several new toothpaste manufacturers have recently come out with products that partially restore decayed tooth areas. They have intentionally kept this innovation very low-key because they feared the consumer would not believe it.

Product features include such factors as form, color, size, weight, odor, material, and tactile qualities. A new car can offer thousands of alternatives when one considers the exterior and interior options. The smell of fresh bakery products or a good Italian restaurant has clearly enticed many a customer. The product must also be aesthetically pleasing. When the entire product is put together, it must create an appealing, visually attractive and distinctive need-satisfier.

Packaging With the increased importance placed on self-service marketing, the role of packaging is becoming quite significant. For example, in a typical supermarket a shopper passes about 600 items per minute, or one item every tenth of a second. Thus, the only way to get some consumers to notice the product is through displays, shelf-hangers, tear-off coupon blocks, other point-of-purchase devices, and, last but not least, effective packages. Common uses of packaging include protection, communication, and utility/ease of use.
Considering the importance placed on the package, it is not surprising that a great deal of research is spent on motivational research, color testing, psychological manipulation, and so forth, in order to ascertain how the majority of consumers will react to a new package. Based on the results of this research, past experience, and the current and anticipated decisions of competitors, the marketer will initially determine the primary role of the package relative to the product. Should it include quality, safety, distinction, affordability, convenience, or aesthetic beauty? For the automobile oil industry, the package has become more important to promote than product performance. To a lesser extent, this is also true for products such as powdered drinks, margarine, soft drinks, perfumes, and pet foods. In the case of Pringles, made by Procter & Gamble, a package had to be designed that would protect a very delicate product. It also faced the uncertain response of retailers which have never stocked stacked potato chips before. Recall the many shapes and sizes ketchup containers have taken during the last twenty years.
Clearly delineating the role of the product should lead to the actual design of the package: its color, size, texture, location of trademark, name, product information, and promotional materials. Market leaders in the dry food area, such as cake mixes, have established a tradition of recipes on the package. However, there are other package-related questions. Do the colors complement one another? Are you taking advantage of consumer confusion by using a package design similar to that of the market leader? Can the product be made for an acceptable cost? Can it be transported, stored, and shelved properly? Is there space for special promotional deals? Finally, various versions of the product will be tested in the market. How recognizable is the package? Is it distinctive? Aesthetically pleasing? Acceptable by dealers?

Branding Any brand name, symbol, design, or combination of these constitutes a branding strategy. The primary function of the brandis to identify the product and to distinguish it from those of competitors. In addition, from the perspective of the buyer, it may simply be consistent quality or satisfaction, enhance shopping efficiency, or call attention to new products. For the seller, selecting a brand name is one of the key new product decisions, and reflects the overall position and marketing program desired by the firm. It is through a brand name that a product can: (1) be meaningfully advertising and distinguished from substitutes, (2) make it easier for the customer to track down products, and (3) be given legal protection. Also, branding often provides an interesting carryover effect: satisfied customers will associate quality products with an established brand name.

Before going any further it is necessary to distinguish several terms:

As was the case with product design and packaging decisions, branding requires a systematic effort at generating alternative brand names, screening them, and selecting the best alternative. However, before this process begins, a more basic decision must be made. What is the basic branding strategy to be employed? Three viable options are available.

First, a strict manufacturer's branding policy can be followed. This would mean that the producer refuses to manufacture merchandise under brands other than his own, although he may sell seconds or irregulars on an unbranded basis.

Second, an exclusive distributors brands policy could be followed. In this case, the producer does not have a brand of his own but agrees to sell his products only to a particular distributor and carry his brand name (private brands).

The final opinion is a mixed brand policy, which includes elements of both extremes and leads to the production of manufacturer's as well as distributor's brands. For example, Firestone sells some tires under their own brand names and some under private labels.

For most companies, both brand names and trademarks are vital in the identification of products. The design process should be guided by research; often the advertising agency is brought in to help. Brand names are mandatory if the manufacturer or distributor intends to use mass advertising. Brand names also make word-of-mouth advertising effective. Without them, repeat purchases of a particular product would be virtually impossible. Product identification through the brand name is a most important element in the product plan.

Related Services Behind every product is a series of supporting services, such as warranties and money-back guarantees. In many instances, such services may be as important as the product itself. In fact, at times it is difficult to separate the associated services from the product features. Consequently, companies must constantly monitor the services offered by the company and its competitors.

Based on the results of data-gathering devices such as customer surveys, consumer complaints, and suggestion boxes, the product manager can determine the types of services to offer, the form the service will take, and the price charged. For example, consumers are very reluctant to purchase a stereo that can be serviced only by sending it to the factory, and paying the postage and a high service fee. Maytag, however, has been very effective in selling their appliances with service contracts and local repair. Banks are still uncertain as to whether they should charge the customer for checks, ATM (automated teller machine) use, safety deposit boxes, and overdrafts. An industrial customer might be keenly interested in related services such as prompt delivery, reliable price quotations, credit, test facilities, demonstration capabilities, liberal return policies, engineering expertise, and so forth.

Although there are a wide range of supportive services, the following are most prevalent: