Product is one of the 4Ps of the Marketing mix.
Products are either goods or services that customers buy to meet their needs.
Remember for the exam:
Tangible & Intangible
Products are either tangible or intangible.
Tangible Goods
Tangible products are those that can be held physically in one’s hands. Tangible products are goods that are physical and you can touch.
Intangible Services
Intangible products are something that you cannot touch. Intangible products are a service which is a job or work provided to someone.
Quiz
Benefits and risks of developing new products
Unique Selling Point (USP)
A USP is a feature that makes a product stand out from its products, it is the one thing that makes the business better than competitors.
Advantages
- Can communicate advantage clearly and persuade customers
- Allows the business to stand out over competitors
- Can focus business resources on one marketing message
Disadvantages
- USP may be too narrow and put customers off
- Could be easy for other businesses to imitate
- Needs to be specific and meet the needs of the target market
Needs of the Target Market
The target market can be segmented by age, income, education, gender, ethnicity and so on. Each of these demographics will have a set of different needs and wants. Developing products to meet these needs and wants is essential to convert potential customers into paying customers.
Advantages
- Increase in sales
- Customers are more likely to buy products that better meet their needs
- Charge a higher Price for specialised products, e.g. Specialist hair products are usually more expensive than generic
- Easier to promote and advertise to one target group, reducing costs
Disadvantages
- Products could be too specific to the target market and exclude other groups, e.g. makeup is usually segmented by skin tone.
- Some target groups are notoriously hard to convert to paying customers and very loyal to certain brands
- Some markets are saturated or owned by a few competitors so hard to enter(e.g. Tesco has 28% market share of grocery stores)
Brand Image
Brand Image is how customers think of a brand or business. For example, when you think of Coca-Cola, you may think of happiness, this is because their marketing focuses on positive experiences and good times, with the tagline “Open Happiness”.
Advantages
- Customers may associate the brand with a product. e.g. Hoover is actually a brand of vacuums.
- Strong brand recognition
- Increased brand loyalty
- Higher credibility
Disadvantages
- May be renowned for one thing, making it harder to enter new markets
- High marketing and advertising costs
- Branding has to be consistent and repeated many times to be cemented into Consumers’ minds
Product Quality
Product quality is how well a product meets or exceeds customer needs and is fit for purpose.
Advantages
- Lower return rate
- Improves customer satisfaction
- Better brand image and reputation
- Increased word-of-mouth promotion
Disadvantages
- Increased costs – High-quality products could Cost more to produce
- Low-quality or even disposable products are common for some industries e.g. fast fashion
- High Rework rate as there is less tolerance for poor quality products
