Product Policy

Meaning of Product Policy: - Policy can be defined as the broad guidelines relating to a
particular matter. Policies are framed at the top level of management e.g. Board of Directors.
Thus, Product policies are broad guidelines formulated by the top management of the company
with regard to product planning and development. Therefore, product policy can be termed as
long-term planning and management of its product-mix by a marketing company in order to
achieve maximum consumer satisfaction.

Objectives of Product Policy:-

1. Survival: - The prime objective of a marketing company is to keep itself in the market.
An effective product policy aims to follow strategies to keep the products in the market.
2. Growth: - After securing the survival objectives, the next objective of product policy
would be ‘growth’. Product policy is formulated in such a manner so that it provides
development of marketing operations according to long-term planning of the company.
3. Flexibility: - Though product policy is designed for a longer period, it becomes
necessary to evaluate the effect of emerging trends in marketing. One of the objectives of
product policy is to keep flexibility so that it could be changed according to new
consumer aspirations and needs, government rules and regulations.
4. Maximum Resource utilization: - One objective of the product policy is maximum use
of various resources of the company. Product Policy is designed and altered in such a
manner that the company can adequately utilize its various resources e.g. utilization of
surplus funds, full production up to installed capacity, use of idle resources, maximum
exposure to managerial talent and sale force of the company.

Product policy generally covers the following

1.) Product Planning and development

2.) Product mix
3.) Product packaging
4.) Product positioning
5.) Product branding

a.) Product Planning and development: - Product planning embraces all activities which
enable producers and middlemen to determine what should constitute a company’s line of
products. Product development embraces the technical activities of product research,
engineering and design.