So far, you have learnt about the segmentation, targeting and positioning strategies.

Now, to position a product better to our target audience, we use the 4Ps of marketing
or the marketing mix. 

What is a marketing mix? Importance? How does it help?

A good marketing mix example or case study to give an idea.

The 4Ps stand for Product, Price, People and Promotion. You need to decide these
by keeping your target audience in mind.

In this session, we will look at each of these elements of the marketing mix in greater
detail and understand how they work individually and together in helping a company
achieve its desired position in the minds of its target consumers. 

 The first of the 4Ps is Product. It refers to the goods produced or services
offered by a company. 

Take the case of Nike. It produces many items for sports enthusiasts, which
range from shoes to clothes. Suppose you are a big fan of Nike shoes. You
have three different pairs of its shoes for running, as a casual wear and for
playing football. 

Nike, thus, has a great product mix that is relevant to its target consumers.
Also, its products are of high quality and provide functional utility. 

 The second P is Price. Price refers to the cost that the consumers must bear
for purchasing a product or availing the services offered by a company. 

Nike products are priced higher, as the company targets customers who
typically seek higher quality aspirational products. Customers willingly pay a
premium price for Nike shoes and jerseys because they feel their quality is
worth their prices. 

Deciding the right pricing is crucial, as it determines a company's ability to

generate profits. Marketers should set prices that complement the other
elements of the marketing mix. 

 The third P is Place. It refers to the point of sale of a product or a service

where you deliver value to your customers. 

For example, you can buy Nike’s products either online from the company’s
official website or through sites like Amazon. You can also visit the nearest
Nike store to buy shoes. 

Nike sells its products to about 20,000 retail accounts in the US and in almost
200 other countries in the world. It does so through independent distributors,
licensees and subsidiaries. 
  Promotion is the fourth P in the marketing mix. It covers all the methods of
communication that a marketer may use in order to provide information about
the products to different consumer segments. 

These methods include advertising, public relations, sales promotion and

personal selling. Nike, for instance, uses several promotional techniques to
attract its customers. 

It uses brand ambassadors, who include well‐known basketball players or

other athletes, to endorse its products and creates innovative ads that are
dramatic and aspirational.

Nike has maintained a strong brand image through sponsorships and sports
events. 

Even its tagline, Just do it, is chosen carefully to inspire and send a powerful
motivational message to its consumers.

So, now you have a basic understanding of the 4Ps of marketing. In the upcoming
sessions, you will learn more about them. This will include understanding the product
strategy, the methods for deciding the pricing of a product, determining the
distribution channels and, finally, the promotion techniques that can be used.

As a marketer, you will need to think about your Product on three levels. 
 The most basic level is the core product. 
 The second level is the actual product and 
 The third level is the augmented product 

Let’s discuss these levels one by one: 

 The core product answers the question - What is the buyer actually buying?
So, when a customer browses Amazon for a new mobile phone, she is
essentially looking for a device that lets her answer calls and send messages.

 The second level is the actual product i.e. what the customer will get once she
purchases. The actual product would include the brand name, styling,
operating system, features, packaging etc. This is where the brand manager
can differentiate his brand from the others. 

 Finally, the third layer is that of the augmented product. These are the
additional benefits or services that the customer will get over and above the
actual product. So when Apple offers the iCloud or the Apple Arcade service,
that’s the iPhone’s augmented product offering. 

Why are we learning about these layers? That’s because when consumers see
products - they essentially view bundles of benefits that can satisfy their needs. 

As a brand manager or a marketer, you must identify the core product that
consumers seek from the product, design an actual product that addresses the
needs from the core product and then build an augmented product that maximises
customer value. 

Marketers should also be able to tweak product features and build points of
differentiation for their brand. 

But what are some of the decision areas for a brand manager when designing an
effective product strategy? 

Essentially, there are 4 key decision areas – 

 The product attributes 
 Packaging
 Labelling and logos
 Support services by the brand

Let’s understand such four decision areas one by one. 

 When you pick up a pack of Kurkure, you know that the contents of the pack
are standardised and tested. 

It will taste the same as the last pack you picked and will taste the same as
the next. You also expect the same amount of snack in all Kurkure packs. 

This is what is called as product attributes i.e. the quality and features of the
product that do not change.

 The second decision area for marketers is deciding the packaging. What’s the
size of the pack? How does it look? 

The packaging is such a strong influencer when it comes to certain categories

that weaker brands would simply try to copy your packaging. 

The best packaging clearly stands out on the shelf. You remember the
packaging of Kinder Joy, right? 

 The third decision area is about labelling and logos. You might see a logo as
a simple identifier for a brand, but it is much more powerful. Look at this logo.
What comes to your mind? 

Nike’s Swoosh is probably the most iconic logos of all time. It stands for
performance and athleticism. The slightly tilted swoosh is as dynamic as the
brand itself. 

 The final decision area is the support services offered by the brand. 

Amazon is famous for its customer centricity and pride themselves for being
‘Earth’s most customer-centric company’. 

Support services - pre and post-sales, are an important part of the overall
customer experience.
Setting a Vision

What do you hope to achieve with your products? Do you want to change people's
lives for the better, help small companies grow or promote health and well-being?
Envision the future you are trying to create. Think long term rather than focusing on
the immediate needs of your target customers.

IKEA, for example. Since its very beginning, the company strived "to create a
better everyday life for the many people." Its products are designed to make the
home a better place. They are stylish yet functional, fit into any budget and provide
superior quality. IKEA's vision is to offer practical furnishing products at prices so
low that everyone can afford them.

Customer Centric Vs. Product Centric Strategy

When developing your product strategy, you need to determine whether you want
to focus on the actual product or the end customer. A product focus definition could
be an approach to business that defines a company's operations, strategies,
metrics and performance in terms of products. Manufacturing companies, for
instance, are constantly improving their products and embracing the latest trends in
order to remain competitive.

Apple, for example, is a product-focused company. Its products disrupted the world
of telecom and contributed to the so-called fourth industrial revolution. The tech
giant created a market that customers didn’t even know they wanted or needed.

Customer-focused businesses, on the other hand, plan their operations, set metrics
and assess their performance in terms of customer satisfaction. Compared to
product-focused companies, they're more flexible about their offerings and
processes. Their primary goal is to meet customer needs and wants, even if they
don't necessarily align with the latest industry trends. Samsung, for instance, goes
back and forth to fulfill customers' needs and adapt its products in response to the
market.

Now, we all know that with the death of film cameras, Kodak became relevant. Or
how the sales for Patanjali - once the hottest, fastest-growing FMCG brand in the
country, have quickly flattened out. 

Managers and their product strategies need to be cognizant of this. Each product will
have a life cycle, although its exact shape and length is not known in advance. 
There are essentially 4 stages in a product’s life cycle. These are:
1. Introduction stage
2. Growth stage
3. Maturity stage
4. Decline stage

Now, let’s learn about these stages in detail.

1. The introduction stage is the first stage. Product introduction takes time, and
sales growth is generally slow in this phase. 

Brands would spend a lot on promoting the product at this stage. The
communication in this stage is going to focus on building awareness and
generating trials for the brand. 

2. The second stage in the product life cycle is the increasing stage. If the
product enters a growth stage in which the sales will start climbing quickly. 

The early adopters will continue to buy, and later buyers will start following
their lead, especially if they hear a favourable word of mouth. 
3. The third stage of the product life cycle is the maturity stage. In this stage,
the sales flatten.

 In this stage, brands will need to take a decision - to rebrand or reposition to
stay relevant. 
4. The final stage of the product life cycle is the decline phase. 

Different products will decline at different rates and again, brands have to
tweak their marketing strategies to ensure relevance. 

Companies sometimes also take the conscious call of killing off a brand to
replace it with a new brand. 

Not all products go through all the stages of the PLC. Some products are introduced
and die off very quickly - remember Coke Vanilla? 

And a few well-managed brands like Coke, Gillette and Cadbury Dairy Milk have
been and will be around for decades!
 Other factors that affect the overall price of a product include value chain
costs, markups, distribution plans and also competitor pricing.

Factors that influence

Creating a successful product requires more than a great idea. Whether you're a
small business or an established organization, you need to plan every step of the
process. It's crucial that you differentiate yourself from the competition and give
customers a reason to choose your brand. That's where a well-thought-out product
strategy can help.

Think of it as the vision or the road map for your product. It describes how the
product fits into the market, how it complements your business and who will benefit
from using it. A good product strategy will map out the steps needed to bring your
idea to life and make it successful.

Key Elements to Consider

An effective product strategy will serve as a road map and guide your business
decisions. Its role is to help you define and plan your company's activities and
ensure that your products will have the impact you expect. Before getting started,
make sure your strategy covers the following aspects:

 Product design
 Features and key characteristics
 Quality
 Target audience
 Branding

Positioning Video 4

The Place refers to how your product or service reaches your consumer and where
he or she picks up your product from. 

Much like your product and pricing strategy, your Place strategy would also start with
answering the following about your consumers. 
 Where do they shop from? 
 Where do they look for product information? 
 Where do they have the maximum purchase intent?

Before we move ahead, let us list down the different intermediaries called channel
partners that form the crux of deciding a suitable place for your product.

 Distributors: On a contractual basis with manufactures, distributors are

responsible for supplying bulk orders to businesses. 
 They are mostly either region or industry-specific. A distributor’s customer is
either a wholesaler or a retailer or both. 

 Wholesalers: As the name suggests, they purchase goods in large quantities

and then sell them to other units in the market. 

Their customer space is limited to retailers and does not sell to customers
directly. 

 Retailers: The channel that transfers goods from wholesalers to customers is

the retailers. These are basically small local shops, showrooms, malls and
outlets. 

Their role is to present products of different brands to the customers and let
them make the final choice.

 Stockists: You can take a guess of the function of stockists from the name.
They stock goods for a certain period of time and sell them when required.

 Most stockists are product-specific or brand-specific. This means that they

store a particular type of product. 

Now, let us understand how FMCG-giant ITC places its products in different
channels. ITC has multiple brands and formats for body fragrance. 

There’s Essenza De Wills, a range of premium perfumes, there’s Engage

deodorants and perfumes and then there’s Engage On, a range of pocket perfumes. 

Where do you think ITC should make the 3 brands available? 

 ITC sells Essenza primarily in their luxury hotels and through Wills Lifestyle
stores. 

 Engage Deos, on the other hand, retails in modern trade stores such as Big
Bazaar and Spencers, in general, trade stores or the Kirana stores and online
as well. 

 Engage On, the pocket perfume is positioned as a convenience product.

Consumers can’t be expected to walk into an ITC hotel or a Big Bazaar to pick
up the product.