try out 3.1.1

So, in Learning Outcome 3.1, we were able to describe the important role that products and services play in creating value for customers, and competitive advantage for organisations.

We have also been able to explore some of the aspects involved in managing the product range or product ‘portfolio’.

Now let’s look in more detail at the different aspects of product portfolio management, including the need for a company to align the products and product ranges, with the needs and wants of the consumer, and with the needs of the busines

Marketing Principles - Learning Outcome 3 (3.1.1)

What influences product decisions?

The key to creating successful product portfolios is being able to make the right decisions about all the aspects, from the price to the packaging, and beyond.

And, as we have seen in the marketing planning process, these decisions will be more accurate if they are based on data and research evidence.

So, before making those decision, marketers need to gather detailed information to inform their product strategies, and to follow a systematic process to developing the optimum product and product range. 

But, as Philip Kotler first identified as far back as 1969, a product is not simply an item or a service that fulfils a specific need or want. It is a bundle of benefits that consumers evaluate as a whole, to decide on the value that it offers.

But what exactly is a product?

You can see in this diagram that Kotler suggests there are five levels of a product that range from tangible to intangible features and benefits.

1. The Core Benefit Product:

This is the actual product itself and its purpose. For example, a pizza bought to satisfy hunger.

2. The Generic Product:         

The features and characteristics of the product. For example, the brand name, quality level, packaging and other basic features of the product. For example, a Domino’s Pizza with toppings, base and ingredients of the pizza.

3. The Expected Product:       

These are the features and benefits that the consumer expects to receive as the basic value offered. For example, that the pizza should be filling and taste good.

4. The Augmented Product:   

This refers to the additional features, benefits, services and so on, that sets the product apart from the competition. It’s the added value that provides competitive advantage, such as a free drink or free delivery with the pizza order.

5. The Potential Product:        

This is what the product could become in the future and how it might be developed to be improved. For example, different pizza flavours, sizes and base.

(Source)

To put all this into context, let’s look at the range of product categories and the portfolios owned by consumer goods giant Procter and Gamble: