Individual Product and Service Decisions (Figure below)

 

 

Product and Service Attributes

Developing a product or service involves defining the benefits that it will offer. These benefits are communicated and delivered by product attributes such as quality, features, and style and design. 

Product quality involves creating customer value and satisfaction. 

Total quality management (TQM) is an approach in which all the company’s people are involved in constantly improving the quality of products, services, and business processes.

Product quality has two dimensions: level and consistency.

The quality level means performance quality or the ability of a product to perform its functions. Quality conformance means quality consistency, freedom from defects, and consistency in delivering a targeted level of performance.

Product features are a competitive tool for differentiating the company’s product from competitors’ products.

The company should periodically survey buyers who have used the product and ask these questions: How do you like the product? Which specific features of the product do you like most? Which features could we add to improve the product?

Product style and design is another way to add customer value.

Style describes the appearance of a product. Design contributes to a product’s usefulness as well as to its looks.

 

Branding

A brand is a name, term, sign, symbol, or design, or a combination of these, that identifies the maker or seller of a product or service.

Branding helps buyers in many ways.

• Brand names help consumers identify products that might benefit them.

• Brands say something about product quality and consistency.

Branding gives the seller several advantages.

• The brand name becomes the basis on which a whole story can be built about a product.

• The brand name and trademark provide legal protection for unique product features.

• The brand name helps the seller to segment markets.

 

 

Packaging

Packaging involves designing and producing the container or wrapper for a product.

 

Labeling

Labels perform several functions.

• The label identifies the product or brand.

• The label describes several things about the product.

• The label promotes the brand.

Labeling also raises concerns. As a result, several federal and state laws regulate labeling.

The most prominent is the Fair Packaging and Labeling Act of 1966.

Labeling has been affected in recent times by:

• unit pricing (stating the price per unit of standard measure),

• open dating (stating the expected shelf life of the product), and

• nutritional labeling (stating the nutritional values in the product).

 

Product Support Services

The first step is to survey customers periodically to assess the value of current services and to obtain ideas for new ones.

Next, the company can take steps to fix problems and add new services that will both delight customers and yield profits to the company.

 

Product Line Decisions

A product line is a group of products that are closely related because they function in a similar manner, are sold to the same customer groups, are marketed through the same types of outlets, or fall within given price ranges.

Product line length is the number of items in the product line.

Product line filling involves adding more items within the present range of the line.

Product line stretching occurs when a company lengthens its product line beyond its current range.

Companies located at the upper end of the market can stretch their lines downward.

Companies located at the lower end of the market can stretch their product lines upward.

Companies located in the middle range of the market can stretch their lines in both directions.

 

Product Mix Decisions

Product mix (or product portfolio) consists of all the product lines and items that a particular seller offers for sale.

A company’s product mix has four dimensions: width, length, depth, and consistency.

• Product mix width refers to the number of different product lines the company carries.

• Product mix length refers to the total number of items the company carries within its product lines.

• Product mix depth refers to the number of versions offered of each product in the line.

• Product mix consistency refers to how closely related the various product lines are in end use, production requirements, distribution channels, or some other way.

The company can increase its business in four ways.

1. It can add new product lines, widening its product mix.

2. It can lengthen its existing product lines.

3. It can add more versions of each product, deepening its product mix.

4. It can pursue more product line consistency.