Product Decisions Definition

Let's first examine the definition of product decisions.

Product decisions are decisions to be made about the product or service a company
wants to sell. These decisions are vital to creating a successful marketing mix to
meet the company's objectives.
Before we discuss the technical aspects of product decisions, let's quickly take a look
at some examples of the types of decisions marketers might make. While making
product decisions, marketers consider:

1. The core benefit of the product. For example:

● Mineral water quenches your thirst.

● Buses take you from point A to B.
● The supermarket allows you to shop for daily groceries.
● Facebook is the platform that keeps you in touch with friends and family.
● StudySmarter helps you ace the exams.

While the core benefit stays more or less the same, customers' wants and needs can
change over time, and thus the business must be prepared to adapt accordingly.

2. The nature of the product and service.

The nature of Starbucks coffee is its ingredients, type of coffee, and cup size.

● The main ingredients are roasted coffee beans, sugar, milk, or cream.
 ● Types of coffee include blonde roast, medium roast, and dark roast.
● The cup size can be short, tall, or grande.

The nature of the product is what constitutes the product and should be developed
according to the customer's needs and wants.

3. Augmented features.

These extra services come with the product, such as guarantee, installation, customer
support, and maintenance. Besides product quality, augmented features play an
essential role in turning a new customer into a regular one.

Product Decisions: Product Differentiation and USP

A product's unique selling points are features that differentiate it from its
competitors. In other words, it is what the business can offer but others can't. For
instance, a product can be cheaper, safer, faster, chicer, more friendly, or visually
appealing.

● Apple doesn't just sell iPhones; they sell a lifestyle. Owning an Apple product
is like having a friend who gives you hopes, dreams, and aspirations.
● Adidas is a renowned manufacturer of shoes, sporting clothes, and goods that
appeal to a wide demographic.
● Starbucks sells high-quality roasted coffee and provides a cozy space for
friends and family to gather.

Product Attribute Decisions

One of the primary decisions marketers have to make involves decisions about
product attributes. Product attributes are the characteristics and defining features of
a product. They are individual product decisions and are as follows:

● Product quality decisions - The quality of a product is crucial for its marketing.
It plays a key role in positioning as products can be positioned based on their
high quality (e.g., high-performance luxury cars or high fashion clothing made
from the best quality fabrics). Product quality is also essential for providing
value to customers - a high-quality product can be a value-adding feature that
results in customer satisfaction.
● Product feature decisions - Another element of product attributes are the
product's features. Product features are crucial for differentiation. Adding
additional features makes a product stand out from similar products offered
by competitors. So, how do marketers know which product features to add?
Through market research. Of course, adding a random product feature will not
automatically guarantee success. However, market research can help
companies gain insight into what customers actually want and need regarding
a product, leading to higher customer satisfaction.
● Product design decisions - Similarly to product features, product design can
help marketers differentiate their offerings from competitors. For example, a
functional design can make it easier for customers to use a product, leading to
fewer complaints, returns, etc. On the other hand, product style can capture
customers' attention.

For example, Apple is known for its innovative and high-performance MacBooks.
However, this product attribute is only part of the company's success, as many other
tech companies offer similar products. The MacBook's sleek design and user-
friendliness (ease of use) differentiate the product from its competitors.
Individual Product Decisions

Now that we have covered product attribute decisions let's look into other individual
product decisions. Individual product decisions refer to decisions marketers must
make about one particular product or service. They include decisions about the
product's attributes, branding, packaging, and the additional services attached to the
product

Product Decisions: Branding

After product attributes, the following key decision marketers must make involves
product branding. Should we use the same logo? Will we use the same brand name?
We will cover the answer to these questions in more detail later in the explanation,
but for now, let's look at the importance of branding.

The brand name, logo, slogan, etc., are key features that help customers identify a
product. Branding can add more customer value by further differentiating a product
from the competitors. It also helps strengthen customer relationships as customers
attach meaning and develop emotional connections with brands.

Product Decisions: Packaging and Labeling

Another product decision marketers must make includes packaging. What kind of
packaging will we use to make our product stand out? Can we use a particular type
of packaging to differentiate our product from similar products on the supermarket
shelf?

The primary function of packaging is to hold a product and protect it from damage.
However, due to the nature of today's competitive environment - high competition
and numerous similar product offerings - packaging plays an essential role in product
differentiation. Marketers can differentiate packaging based on:

● Functionality - Relates to the convenience of removing the packaging and

using the product. Functionality is especially relevant when using online
distribution channels. Customers do not want to receive dozens of boxes and
plastic wrappers when shopping online.
● Design - Some brands might add quirky or colorful designs to their packaging
to grab customers' attention. For example, certain chocolate and tea products
are packaged in colorful boxes with floral designs.
● Branding - A Starbucks cup is recognizable (Starbucks logo on a white paper
cup) due to the branding on its packaging.
● Safety - Food products are packaged in ways that avoid spillage or
contamination.

Another essential product decision element is labeling. Most brands add logos and
labels to their products, which adds to their branding. For example, Nike labels its
products with its iconic check mark, adjusted to fit each product's size. On the other
hand, food and beverages legally have to be labeled with an ingredient list. These
regulations are in place to protect customers.
Product Decisions: Additional Services

Finally, additional services also play an essential role in product decisions.

Support services are additional services that customers benefit from when
purchasing a product.
Companies often pair support services with products to increase the value they bring
to the customer. Support services can be of significant value, like helping a company
integrate a new software system into its operations after purchasing a new software.
On the other hand, support services can be minor, like offering free returns on
products purchased online. Support services like post-sales communications can
help a brand strengthen its customer relationships.

Product Line Decisions

The next element marketers must consider when creating a product strategy includes
product line decisions.

A product line is a group of related products that function similarly and are sold to
the same customer segment.
One key consideration in product line decisions involves product line length. We
can quantify the length of a product line by examining the number of products in one
particular product line. Marketers must assess product line length from time to time
to see whether any adjustments need to be made.

A product line may be too long with certain products that do not bring the company
much revenue. This is often due to products being saturated or reaching the end of
their life cycle. In this case, the marketer must evaluate which products to remove
from the product line. On the other hand, a product line may be too short. Short
product lines are those with the potential to bring the company additional profit.
Marketers might consider adding new products to increase sales and revenue if a
short product line is performing well in the market.

There are two methods for extending a product line (see Figure 2 below):

1. Product line filling - Filling means adding more products to the current
product line or range. For example, offering different beverage flavors or
producing the same shirt in a different color.
2. Product line stretching - Stretching involves adding more products beyond the
existing range. For example, if Apple decided to release a budget version of
its MacBook Pro, it would be an example of a downward product line stretch.
However, if shampoo manufacturer Head & Shoulders decided to sell a luxury
version of their shampoo, it would be an upward product line stretch.

Product Mix Decisions Example

Finally, let's take a closer look at product mix decisions. Many companies,
particularly larger retailers, have multiple products and product lines. The collection
of these product lines is known as a product mix.

A product mix is a company's portfolio of all the different product lines they offer.
We can explore a company's product mix based on four different categories:
 1. Mix width - refers to the number of product lines a company has. For instance,
Coca-Cola has three main product lines: soft drinks, Minute Maid, and
mineral water.
2. Mix length - refers to the number of products within each product line. For
example, Coca-Cola offers various products like Coca-Cola Zero or Diet Coke
in its soft drinks product line and Glaceau Smartwater and Dasani within its
mineral water product line.
3. Product line depth - refers to the number of varieties available in each product
line. For example, Coca-Cola offers cherry, vanilla, and lemon flavored Coca-
Cola, in addition to its original flavored beverages.
4. Product line consistency - refers to how closely each product line is related.
We refer to consistency in terms of the actual product line itself, its
distribution, production, etc. Following the previous example, Coca-Cola's
product line is consistent as all of its brands offer a type of beverage.

As a result, marketers have to make various types of product decisions. Through

product decisions, marketers can add value to customers and strengthen customer
relationships through their offerings. However, it is also essential to periodically
review product decisions to minimize the risks of losses or losing out on potential
profit.