Product Marketing: Concepts, Strategies, and Lifecycle
Marketing Concept and Product Lines
Marketing concept: It encompasses everything offered in a market that can satisfy a desire or need. This includes a range of product lines. If a company offers a single product, all costs and market risks are concentrated on that product. Therefore, it’s common for companies to have multiple product lines for better risk management. Effective management often involves assigning responsibility for each product line to a dedicated team that makes marketing decisions specific to that line.
Classification of Products
Products can be classified based on various criteria:
- By their nature: Tangible or intangible.
- By their destination:
- Industrial products: Purchased by companies for use in the production process.
- Consumer products:
- Rational purchase products: Products purchased based on a specific need.
- Emotional purchase products: Products purchased due to a sudden desire rather than a need.
- Products with a relationship to alternative products: Products that are distinct but can satisfy the same demand.
- Independent products: Products whose demand is not related to each other.
Product Life Cycle
The product life cycle analyzes a product’s evolution based on its sales and profits over time. It typically includes the following phases:
- Introduction: The product’s launch into the market. Profits are usually negative due to high investments and low sales.
- Growth: Sales growth accelerates, and profits begin to emerge. Competition increases, requiring more investment in advertising.
- Maturity: Sales volume reaches its peak and stabilizes. Competition remains high, necessitating price reductions and potentially impacting profits.
- Decline: Sales volume, profits, competition, and advertising costs decline significantly as newer products emerge to satisfy the same needs. This situation can lead to:
- Product revival: Reintroducing the product with modifications or new marketing strategies.
- Product withdrawal: Removing the product from the market.
New Product Launches
Changing environments and new challenges require innovation and new products to replace declining or unprofitable ones. The process typically involves:
- Idea selection: Techniques like brainstorming, customer feedback, and opportunity analysis are used to select ideas aligned with the organization’s goals.
- Demand verification: The feasibility of the idea is checked through market research and concept testing.
- Technical and financial viability study: The ability to produce the product at an acceptable cost and secure funding for development is assessed.
- Product development: Prototyping and cost analysis are conducted.
- Acceptance testing: The product is tested in the market to gauge consumer reaction.
- Launch: The product is officially introduced to the market.
Branding
Brand: The name, term, symbol, design, or sound (or a combination) that identifies a product and distinguishes it from others. It’s a crucial product attribute.
A brand typically consists of:
- Text: A brand name.
- Logo: A visual representation of the brand.
- Anagram: A combination of the brand name and logo.
Types of Brands
- Manufacturer brands: Owned by the producer, linking the product directly to the manufacturer.
- Distributor brands: Owned by retailers, often featuring the name of the product or the retail establishment.
Brand Requirements
An effective brand should be:
- Attractive to consumers.
- Easy to pronounce, remember, and pleasing to the ear.
- Descriptive, suggesting product features.
- Relevant to the target market.
- Flexible and adaptable to different markets and products.
- Enduring, capable of lasting over time.
- Unregistered initially, with the possibility of future registration.
Packaging
Package: The design of a product’s packaging involves both technical and psychological factors. Key features include:
- Protection: Safeguarding the product during transportation and storage.
- Promotion: Attracting attention and communicating product benefits.
- Form: Shape and structure of the packaging.
- Size: Dimensions of the packaging.
Tag
Tag: A communication tool that provides information about the product.
Pricing
Concept: Price is a marketing variable that often reflects a company’s overall trade policy. It balances market needs for a product with specific attributes and the production process, including costs and profitability targets. Companies should set prices they deem appropriate, considering these factors.
Pricing Methods
Product costs represent the lower limit for pricing, while the upper limit depends on demand, competition, and other market factors. Prices can vary across market segments and product life cycle stages. Some products have regulated prices, limiting a company’s pricing freedom.
Costs
Costs: Calculating total costs, including fixed and variable costs, is crucial. Understanding costs helps determine product profitability, identify unprofitable products, and estimate the production volume needed to reach the break-even point.
Classification of Costs
Costs can be classified based on various criteria, including:
- Nature of production factors: Labor costs, raw material costs, energy costs, plant costs.
- Certainty of allocation:
- Direct costs: Costs directly attributable to a specific product.
- Indirect costs: Costs not directly related to a specific product but affecting the overall production process.
- Relationship with production volume:
- Fixed costs: Costs that do not vary with production volume.
- Variable costs: Costs that change depending on production volume.