We encounter goods and services every day, but it is unlikely that ordinary consumers have thought at least once about what path they go through, from the idea and concept of their creation, to production, transportation, advertising and promotion. For a marketer, the role of a product in marketing is of great importance, since it is the central object of his work, something that every person needs in one form or another. About all the most important aspects of the product 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 something that came off the assembly line. This is a whole process that involves several important steps and a huge effort of the marketer to promote.
Product creation steps
The first step is to create a vision. The marketer analyzes the market and consumer needs and determines the functions of the product in marketing, how it could satisfy and whatbenefits give to the buyer.
The second step is the execution of the idea. It's all about bringing the product to life - purchasing materials, manufacturing, packaging, shipping, marketing methods, etc.
The third step is to use the marketing mix. This is work with the market, competitors, flexible pricing policy, effective means of sales promotion, promotion policy (advertising, promotions, POS materials, etc.)
The main thing to remember is that no matter how effective these stages are, the product will not be successful if it does not fulfill its main function - the satisfaction of human needs, which occurs due to some of its most important properties.
Consumer properties of 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 has useful functions for the consumer - quality or quantity, breadth of application, advantages in storage, transportation, delivery, etc.
- Demand - whether the product corresponds to market demand, season, style or fashion.
- Reliability and durability - how long will the product last, how long does it last, is it suitable for fault detection and repair, does it have warranties and after-sales service.
- Ergonomics is the convenience and comfort of its use, compliance with the taste, visual, strength and other physiological perceptions of a person.
- Aesthetics - compliance with the standards of society, style, fashion, socio-cultural significance.
- Economy - value for money.
- Sustainable - safe use for the consumer and others.
These are the key features of the product in marketing, which allow the consumer to incline his choice in one direction or another. But not only benefits and advantages form demand, a lot depends on its varieties.
Classification of goods
Let's look at the principles by which a product is divided in marketing. These are several different classifications, the first of which is by duration of use:
- short-term - those that are consumed frequently and quickly (food, household chemicals);
- long-term - those that are consumed for a long time and infrequently purchased (real estate, clothing, jewelry, household appliances);
- services - household, transport, legal and other.
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 consider physiological characteristics, taste or smell, but not necessarily fashion or durability. While for durable use, durability, warranty and product quality are the key points in marketing.
Another classification separates goods by demand, these are:
- consumer goods - purchased often, without hesitation and much effort (food);
- goodspre-demand - also purchased quite often, but after comparison with other goods (clothing);
- exclusive goods - single samples, in the absence of which the buyer does not purchase others on the market, because they have no analogues;
- goods of passive demand - those that the consumer may not need, or he does not know about their existence, but with the right promotion, demand appears for them;
- speci alty items - hard to find and buy.
In addition to this classification, the product structure in marketing includes materials, components, raw materials, semi-finished products, various services, additional goods and much more, which helps to create a finished product and is partly included in its cost.
And, of course, speaking of classification, one cannot fail to mention the following concept.
What is the new product?
A new product in marketing is a product with completely new properties either for a single company or for the entire market. Its classification has 6 categories:
- Products of world novelty - what is released for the first time on the world market. The most obvious example is Apple, which launched the iPad for the first time on the market.
- New product line - something that is released for the first time on the scale of one company. A fairly common situation in many industries, where the assortment is updated from time to time. For example, a toy company decided toalso produce clothes for children.
- Extension of a product line - something that updates or complements 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 releases a new model with a better engine and automatic transmission. Or a ski clothing company makes hiking and hiking gear during the summer.
- Repositioning - changing the position of a product or its target audience. For example, changing the design towards a more youthful one in order to sell it to young people.
- Reducing the cost of the product - occurs through cost reduction, modification and improvement of production and (which is not the best option) the use of cheaper materials.
This concept of a product in marketing allows you to maintain and strengthen your position in the market, 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 a worthy place in the market, it is important to determine the right product range. High qualityproduct in marketing is not the only requirement. The product produced and sold must meet the demand and needs of customers, have a competitive price and a wide selection. Here are the main requirements for the range:
- breadth - how many groups this product category has (for example, the assortment of a dishware store includes plates, pans, pots, sets, etc.);
- depth is variation within groups (for example, the assortment group "pots" includes stewpans, ladles, ducklings, fondue pots, etc.)
- saturation shows how many of these variations are in quantitative terms;
- harmony - how products complement each other.
A complete definition of a product in marketing cannot do without a deep ABC analysis of the assortment. With its help, it is determined proportionally which product brings the greatest profit, and based on these calculations, the optimal trading assortment is formed.
Working with competitors
In addition to the right set to sell, 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 the firms that produce them. Then evaluate your strengths and weaknesses, identify product flaws, analyze your own and competitors' prices. ATas a result, a plan is drawn up on how to correct the shortcomings, what to offer new or how to stand out from competing firms, what will be the best cost and how to reduce costs.
Marketing mix
In marketing, a product is understood as a complex of price, sales, assortment and promotion or marketing mix. We talked about the assortment policy above.
To set prices, the cost method is most often used (based on the costs of production and sale of goods). Often, manufacturers use the price, like that of a competitor, and vary it with the help of discounts, promotions and other bonus programs. And very rarely, in the case of exclusive goods, the price is set by the manufacturer at its discretion.
Sales policy involves the search for optimal, efficient and economical distribution channels, work with intermediaries, the creation of retail chains, distributors and more.
And, finally, promotion includes all direct and indirect work with the consumer, from attractive packaging to creating the image and image of the company, direct advertising and bonuses for customers.
Product life cycle
Product in marketing is a constantly 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, its life cycle. It consists of 5 phases:
- product development – starting from an idea thatappears in the head, ending with the creation of a business plan and promotion strategy;
- Creation and implementation of a product is a phase that often causes losses to the creator, since the consumer does not yet know the product, and it takes a lot of investment in testing it on the market - production, rental, transportation, advertising, etc.;
- product growth - in 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 is a period of saturation when a large number of consumers are familiar with the product, and when the manufacturer has maximum profit and practically does not spend money on maintaining the position of the product and its competitiveness;
- decline stage - product glut, consumers want something new, so profits are declining, and the manufacturer is looking for ways to return to peak sales - new product creation, promotion costs, promotions, etc.
After going through these stages, the product will not always be able to return to the peak of sales again. This is part of the job of a marketer - to be able to revive a product in a market where demand for it has disappeared.
How to get a high position in the market
There are a lot of marketing promotion strategies, and there are an incredible number of factors that affect demand. These are price and quality, service, after-sales service, bonuses and discounts, a good assortment, fashion, style and much more.
The most common method of attracting buyers is pricing, withit is not always a sharp decrease in cost increases demand. For example, for essential goods, a surge in sales will, on the contrary, cause a sharp increase in prices.
Another effective tool is advertising. But do not forget that it should be targeted at the target buyer (for this you need to clearly understand who your audience is), be placed in the right place and at the right time.
Discounts, promotions, special offers, bonus program - another effective tool to create an excessive demand for the product.
Often in marketing, a product is understood as a brand. Many consumers are willing to overpay only for the brand, because it is a guarantee 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.
By the way, about the 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 we buy, from food to the services we use, is a commodity. It has certain characteristics that influence our choice when buying - ergonomic, aesthetic, functional, economic and others. We purchase them based on our own preferences, breadth of assortment, fashion, benefits, economy, durability. Much of the demand for the productdetermines the stage that the product goes through in the market - introduction, growth, maturity or decline. This is the essence of the product in marketing.
The task of a marketer is to use the key marketing tools (sales, price, assortment and advertising) to promote the product to the market and ensure high sales and profits on it. If all these funds are weighed and applied correctly, the product will have a better chance of occupying a high position in the market, which means that it will last longer and become more competitive.
