According to Kotler and Armstrong a product can be defined as “anything that can be offered to a market for attention, acquisition, use or consumption that might satisfy a need or want” (Kotler et al, 2010)
According to Philp Kotler there are 5 Product levels as follows illustrating the example of a hotel service
1. Core Product
This is essentially the reason a consumer purchases a product or service
In the case of a hotel the core product or benefit would be relaxation and rest
2. Basic Product
This constitutes the physical makeup or dimensions of a product or service
In the case of a hotel it would include a bed, towels, pillows etc.
3. Expected Product
These are features a consumer expects upon buying a product or service and marketers must aim to exceed these expectations.
In the case of a hotel a customer would expect a clean room, adequate customer service and generally a peaceful ambiance
4. Augmented Product
These are features a product or service provider can instil to its basic product to exceed customer expectation and entice customers over competitors
In the case of a hotel it could be a great room view and facilities, catered breakfast etc.
5. Potential Product
This includes all possible future augmentations a product may experience.
In the case of a hotel it could be providing child nanny services, renovated luxury rooms etc.
The stages in product development are as follows:
1. Idea Generation
This is the initial stage in the product development process that capsules the entire innovation of the basic product.
A negative in this stage would be it is hard to identify new ideas of customer need satisfaction that hasn't already been tapped and unrealistic aspects can be set for the product.
A positive in this stage would be commercialising on new opportunities and gaining an edge in an un-tapped market
2. Idea Evaluation
At this stage bad product or service ideas are filtered out from the masses according to market viability standards.
A negative in this stage would be a great idea might be side lined due to budget constraints
A positive in this stage would be reducing costs by minimising possible deviations so as to closely conform to potential customer needs.
3. Concept Testing
In this stage focus group testing is carried out to test viability and figure out customer reaction of the product being generated.
Negative- If the focus group isn't diverse enough, a negative response from a small range of potential customers can lead to the products demise before its introduction.
Positive- The feed-back generated through this process could help marketers' re-structure their product design or features to better suit customer needs
4. Business Analysis
At this stage a business will find out how profitable a potential product could be.
Negative- It is a time-consuming process that involves a large amount of data and is considerably resource driven
Positive- The potential selling price can be determined from this stage by analysing competitor and market data which can help portray a picture of the future potential of the business
5. Product Development
In this phase the company will finally decide to introduce the product and will initiate the whole creation process on a small scale.
Negative- There are various external influences that can affect the development process such as manufacturer delays, sub-par quality inspection etc.
Positive- This process helps marketers to get an idea of the final product that is going to be sold
6. Test Marketing
The product that has been developed will be introduced to the market on a small-scale basis within this stage.
Negative- If the product fails at this stage, the costs of production and distribution must be borne by the company and it is a time-consuming process
Positive- It reduces the risk of failure that a large-scale production process would entail
This stage is initiated after a successful test marketing launch wherein a large-scale production process is put into motion.
Negative- Even after massive testing, a product can still fail unexpectedly due to unforeseen circumstances
Positive- sales and profits start picking up and production can be increased to achieve economies of scale
8. Review of Market Performance
It is important for the organisation to constantly monitor a products performance which is what this stage achieves
Negative- The changes communicated would lead to greater costs for the business
Positive- Adequate changes to the product can be made on the basis of this feedback
The categories of consumer adoption to products are as follows:
Innovators ideally purchase the latest developments and wish to be among the first to experience its offerings. With respect to company buyer composition, they are not commercially viable enough to be the sole focus in terms of promotion effort.
When it comes to products such as clothes I would relate to this group and admit to being swept along with the hype.
2. Early Adopters
They are also like innovators but their primary motive is based around their reputation and portraying a premium image of themselves and influence other groups to purchase. I relate to this category when it comes to the newer models of the iPhone being released.
3. Early Majority
These are groups that have been influenced by early adopters that reduce their buying dissonance and then ultimately leads them to initiate purchase decision. I relate to this when I have to upgrade for products of high value such as a laptop.
4. Late Majority
These groups of consumers are those that don't easily change their purchase habit but tend to switch when they recognize their outdated behaviour by seeing that a product is widespread. As a personal preference I relate to this for products that I purchase frequently such as changing a brand of cereal.
Laggards are a difficult group to persuade as they have a stagnant mindset and are highly resistant to change. I identify with this group for phone operating systems, as I am not willing to switch to an android operating system over IOS.
There are 5 stages in the Product Life Cycle process as follows:
1. Product Development
In this stage the entire innovation process is just beginning hence sales are zero and profits are negative as the marketing mix is only developing.
2. Introduction Stage
During this stage survival can be a difficult task as this is the most expensive in terms of a company launching a new product as sales are low and profits continue to be negative. Key strategies that can be employed are as follows:
• Product- Since there is little competition the product being offered must tap an unmet need in the market and must be flexible enough for product modifications.
• Price- Price set by marketers must entice trials from consumers.
• Place- distribution process must suit the type of product and the outreach to be met. This stage is usually characterised by limited distribution.
• Promotion- Marketers must aim their entire promotional campaigns towards attracting trial purchases and informing consumers their product exists and personal selling is used.
3. Growth Stage
In this stage sales will increase and profits will rise hence costs will lower and marketers can economise in this phase. Key strategies:
• Product- Product stock must be kept consistent
• Price- Since costs are lower at this stage more discounts can be made to entice more customers
• Place- At this stage wider distribution must take place
• Promotion- Brand loyalty must be the key promotional factor to be established in this phase
4. Maturity Stage
At this stage the product established reaches its peak and the key aim for marketers is to maintain their position in the industry.
• Product- Changes in product packaging and design can be utilised to meet purchase quota
• Price- must maintain a strong strategic hold against competitors
• Place- Assuming markets are saturated at this stage distribution process must remain stable or extend to untapped areas
• Promotion- Marketers must offer higher incentives for purchase and can include both dealers and consumers.
5. Decline Stage
In this stage the market initially established for this product will begin to drop due to saturation or presence of better alternatives.
• Product- Marketers can introduce new product propositions as a last-ditch effort
• Price- Price points can be reduced to eliminate existing inventories
• Place- Distribution can be reduced to gradually slow down production and save costs
• Promotion- Advertisement costs must be reduced and cheaper methods must be identified
In regards to airlines as a service the 4 brands in order of best to worst that come to mind are:
My experience with Emirates has always been of utmost satisfaction. Everything from the seating layout to the general ambiance the aircraft provide for a comfortable travel experience.
2. Qatar Airways
This is another great brand that comes to mind and the service has always been satisfactory. With impeccable on-board airhostess service and considerably no delays.
3. Fly Dubai
As a budget airline it says a lot about its quality. The check-in and boarding are relatively low hassle however for longer flights the leg-room and pay-per-service and food situation would be unbearable.
4. Air India
This continues to be my most disliked airline service, as the delays are excruciating long and the entire travel situation of this airline is an exhausting process.
Blackberry is a prime example of a star brand that fell to complacency with the emergence of newer alternatives and stronger competitors. A major issue with its strategy is that the brand only focused on its existing customers and did not tap into potential markets. Email on-the-go was essentially a key benefit the blackberry offered however with the trend of social media and internet browsing cropping up it failed to deliver on this front. A complete re-structuring of the company's operations is imperative to their survival in the market and discarding their old obsolete processing system can prove to be a beneficial tactic. The brand is in critical need of re-positioning and a complete brand revival to cultivate its future in the mobile industry.
Kotler and Keller define Product as “anything that can be offered to a market to satisfy a want or need” (Kotler et al, 2009)
A product is the central solution that marketers offer to customers. Understanding the concept of product has a dual benefit to both marketers as well as customers.
It enables marketers to provide something of value thereby achieving the key goal of customer satisfaction. Cultivating a comprehensive understanding of product development can instil marketers with the knowledge they require to launching a product that is successfully received by the public.
It also enables organisations to identify the particular life cycle stage its product is at, so that they can strategically approach the situation and minimise expenses and costs by adopting an appropriate tactic. This know-how does not only help failing brands incorporate a brand revival strategy to remain a survivor in the market by creating new product propositions and in other ways but it also helps brands realize their position before they get to this point.
Understanding the process, a product goes though before it is introduced in the market is vital towards avoiding a pre-mature launch which could lead to a wastage of funds and the ultimate failure of the brand.
Identifying what category potential customers lie within the adoption process can help marketers aim their promotional strategy to these groups and channel strategic advances to un-responsive groups that entice them to trial purchases, taking the first step to long-term loyalty.
Recognising what customers expect from their offerings helps marketers create products and services that surpass these expectations. The product ultimately decides the rest of the marketing mix, the type of product and its features will set the price, method of distribution and promotional scheme
Hence it is imperative for marketers to incorporate this understanding into their technical working.
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