4Ps of Marketing: Product Strategy
Product is a good (tangible) or a service (intangible) that is offered to the customer to meet a requirement or satisfy a need. Its production incurs cost and it’s sold to the target customer at a certain price. All products follow a lifecycle and if planned correctly through intelligent predictions, marketers will be able to adapt to the challenges that each stage of the cycle presents.
For a product to be successful, it has to meet and satisfy a specific need and it should be able to function as promised. The features and benefits of the product should be clearly communicated to current and potential customers. Another vital feature of a product is branding because it’s what differentiates itself from other similar products in the market. It also creates customer recall and loyalty. These factors ultimately affect your product strategy.
Other factors that attract customers, aside from the product itself, are the packaging, quality, services, options, and warranty. You might want to bundle your products with your services to entice customers because it adds value to the products.
There are three main categories of products, namely
- Tangible Products
These are items that can be physically touched and seen like food, clothing, vehicles, and others.
- Intangible Products
These are items that may not be present physically but can still be used or felt indirectly. Examples are insurance policies, online items like software, and music and video files.
Although a service can be considered as intangible, it’s the result of an activity that is not owned by the customer.
Marketing mix refers to determining which elements of the product are necessary for successful selling. You need to do extensive customer research in building a good marketing mix. Knowing your competitors and your target market will give you an idea on coming up with a product that appeals to customers. Know your product strategy, as well as your pricing strategy, distribution strategy and also promotion strategy to fully develop a deep understanding and ensuring maximum success across the board.
Product mix is your portfolio of products. Within this portfolio are products that can be linked closely together to form product lines. Products in a product line share characteristics or offer similar benefits, although they are individual items that have different appearances and functions. Each item has three major factors you need to focus on – branding, packaging, and services. But first, you need to define the product’s benefits.
Understanding Product Benefits
Understanding benefits is a core part in a product strategy. A product’s benefits can be categorized into three levels:
This is the main benefit of the product and should be the first to be defined. For example, a camera can be used to capture memories that will last a lifetime.
These are benefits that differentiate the product from the competition. For the camera example, it would be higher resolution, easier interface, etc.
These are the benefits that you can offer to your customers to earn their loyalty. Examples are after sales support, an extended warranty, customer service hotlines, etc.
Product decisions come after understanding the product mix and defining the benefits.
You need to decide how the design will affect your product mix. Should it complement the product’s features? Or should the features be designed around it?
Understanding the target customers is vital for this decision. You can assign a high price to a high quality product but not every customer may be able to afford it.
You need to come up with the final set of the product’s features. It may add to the actual and perceived benefits so you can price it higher.
Branding is what makes your product just a good. The brand itself can produce instant sales as it can be associated to reliability and quality.
Product development is the process of creating a new product that offers new benefits for the consumers. You can either create a completely new product or modify and improve an existing one. You may do this to target a different audience or market category. The process includes:
- Generating the ideas
- Screening the ideas
- Developing and testing the ideas
- Analyzing the ideas for profit potential
- Conducting market tests
- Finalizing the technical aspects
- Finalizing the commercial aspects
- Conducting post-release reviews
Defining the benefits, product decisions, and product development are processes that should comprise your product strategy.