Marketing as we know it today had its origins in the physical retail trade when products started to compete with each other on the same shelf. These products, which had to compete for with each other brands and strategies, established the concept of the product. By product, we mean the full range of products that deliver value to customers, and this offer becomes the basis on which the company builds relationships with its customers.
What is a product?
According to Kotler, "A product is anything that can be offered to a market for attention, purchase, use or consumption that might satisfy a want or need". The want or need debate is similar to the question of whether the chicken or the egg came first.
Before launching products, they should be tested. An underused tool, which can give you very valuable information at no cost, is to consult your customers. But you should not only consult those involved in the channel, but also the end-users because they are the ones for whom the product is designed. In addition to this analysis of the correct satisfaction of wants and needs, and no matter how much testing has been done on the product, once it has been launched, it must be verified that it is not only good but also perceived as such. The best proof that this happens is when people try it and recommend it. This factor should be given great importance because of the power that the Internet has given to the dissemination of opinions and buying experiences.
Product types
The selection of product offerings must be carefully defined by considering products and services as a set of tangible and intangible attributes. The buyer not only acquires this set of physical or intangible attributes, but also a core benefit that satisfies his or her need. The types of products and their levels are developed below:
Sought-after products: They are not purchased frequently. They require dedication of time and effort in the purchasing process in order to know the qualities, prices and brands available.
Unwanted products: Products that are not known or known but not wanted. This type of product has little or no product and brand awareness.
As for the product levels, they are developed on the basis of the main profit of a real product that forms an augmented product.
1. Main benefit
This concept starts from the basic level that gives the main benefit to the user and can be understood by answering the question "What problem are you looking to solve with your purchase? To make it more graphic: "People don't need a drill, they need a hole". This core benefit is the essence of the product and must be considered in order to move to the higher levels (which add value to the transaction).
2. Actual Product
At a higher level, product developers must turn the main benefit into a real product. How do you know a product is good? There are many factors that go into the attractiveness of a product, the most important of which are listed below for physical products:
Perceived quality: According to the dictionary, quality is defined as "a property or set of properties inherent to something, which allows its value to be judged". Two key concepts can be extracted from this definition: that quality is inherent to a product and that it allows value to be placed on it. The definition of quality is a fundamental marketing tool for the successful development of any positioning, as long as it is defined according to the user of the product.
Physical attributes: Material characteristics are one of the most important factors in the purchase decision, and some of these characteristics that should be taken into account are detailed below:
Aesthetics
Ease of installation
Expected quality of materials
The design: The design of the Product must take into account the functionality of the part and its visual appeal. There are few cases in which industrial design can be used to differentiate the product, because as the part already has a predetermined design, so-called "reverse engineering" is used, which is developed from an existing product.
The packaging or box: This tool is not fully exploited by all companies. Although the box fulfills the functions of wrapping or protecting the product, it also forms part of its attributes or characteristics. Its basic objective is to protect the product during transport or storage until it is sold, but in many cases, it functions as a "silent salesperson" that allows the product to be differentiated from other competitors. Packaging can be the best means of communication of a brand through its display on the shelves of spare parts stores or because once the product has been used, the box can be put to other uses. It should use institutional colors, give prominence to the company logo, and try to generate a visual impact that has the power to block the automatic mode of purchase. While the use of several languages is unavoidable for companies exporting their products, care should be taken to ensure that messages are not confusing and the design is not overloaded. Other additional factors of the packaging, such as size, materials, colors and texts, should not be underestimated. These elements must be congruent with all the variables that make up the marketing mix.
3. Increased output
The augmented product includes all extrinsic product attributes, including all added value related to after-sales service, warranty, installation, delivery, reputation, technical assistance and training.
After-sales service: For many products that have a complex installation, it is of utmost importance to have an after-sales service that can be called upon in the event of a problem. Such a problem may be caused by difficulties during installation or by the perceived risk of part failure. After-sales service can be a tool to build loyalty among installers, who are the ones who come into contact with these installation problems. It can also be related to the product warranty and the manufacturer's response to production defects.
The guarantee: Manufacturers and distributors can use the warranty as a selling point, increasing profits, customer satisfaction and customer loyalty. In the physical product market there are different warranty scopes, there are cases such as lamps that have no warranty, but it can be said that most of the products on the market have a warranty of between 6 and 12 months. Manufacturers can use it to create a competitive advantage by extending their product warranty beyond that of their competitors. This can also work against price competition by avoiding direct product comparisons, increasing the buyer's perception of product quality.
The installation service: The use of installation service as an added value is a tool mainly used by manufacturers of physical products. The installation service is directly related to the after-sales service and to the warranty, mainly in cases where the seller of the part also installs it and is responsible for any defects it may have. Like all mechanisms to increase output, it can also be used to fight price wars, as free installation is a way to lower the price without changing its nominal value.
Delivery: Faced with the increased variety of products and the cost of tied-up stock that this generates, many shops are using distributors' stocks and are demanding fast delivery. This also creates the need for the development of regional branches in order to be able to supply the demand in the region in a timely manner, otherwise, it takes 24 hours or more.
Reputation: Whether they are manufacturers, distributors or retailers, reputation is a major factor in the purchasing decision, because it is one of the most valuable assets a company can generate. In the physical product markets, this is mainly exploited by the channel, where there are many long-established companies.
Technical assistance and training: There are many complexities and issues that can arise in the aftermarket, which is why technical assistance and training can be key factors in reducing negative experiences and aiding the purchasing decision.
One of the most commonly used forms are manuals or installation instructions, aimed at the person who is going to install the product, or with training for the marketing and installation channel. In both cases, the language and level of technicality must be adapted to the recipient of the information, because it may be a person with no technical knowledge, who may not understand some terms and will be rejected on the assumption that the recipient is not trained. For this reason, these communications must be taken with great care and be developed to be misunderstanding-proof. Products should also be designed on the same premise: simple and well explained so that anyone can use them. This can be achieved with prominent warnings, additional clarifications, and with the necessary limitations to eliminate or reduce the risk of mistakes being made. In cases where this universalization of placement is not possible, it should be made clear that "installation should be carried out by specialists".
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