CHAPTER TEN
ELEMENT OF PRODUCT
LEARNING OBJECTIVES
After reading this chapter, you should be able to:
1. Define product.
2. Define services
3. Identify types of product/offerings
4. List and explain the characteristic of services
5. Define product development
6. List and explain product development stages.
7. List and explain product life-cycle stages.
PRODUCT DEFINED
Product is a bundle of satisfaction. That is, a product refers to anything that is capable of satisfying customer needs, be it manufactured products, services, or farm produce.
Product is the most important element of the marketing mix. Other marketing mix variables – price, place, and promotion – come into being because of the existence of a product. Thus, without product there will certainly be nothing to price, distribute and promote.
Product/Service Levels
Before developing and launching any product or service, firms need to address five (5) product levels: core benefits, basic product, expected product, augmented product and potential product. These are illustrated in Figure 10.1.
Figure 10.1: Product Level
1. Core Benefit: “What is the primary function or benefit of my company’s product?” This is a question every marketer must pose to himself/herself before embarking on production of goods and services. Every product must be capable of providing the primary function for it to be useful. The primary function of a car is transportation – moving people, goods and animals from one place to another. No matter how beautiful a car is, if it cannot move then it is useless.
2. Basic product: Here, the core benefit is transformed into actual product. For example, a car is first conceived to provide transportation (core benefits), then it is manufactured with the necessary features such as seats, boot, wind screens, side mirrors, etc.
3. Expected product: These are items that when excluded from a product do not make a product dysfunctional but clearly reduce the product quality. Consumers usually expect some supplements when purchasing certain products. For example, consumers expect spare tires, and jack when buying a new car. In Nigeria, cars are often sold without including spare tires, jack, etc. Also, motorcycles are sold without helmets. Firms can beat competition by including the expected products in their offerings with just a little upward price review. However, it is important to note that consumers’ expectation is usually formed from their past purchasing and consumption experiences, from competitors’ promises during promotion or through referrals (i.e. others who had earlier experience about a product).
4. Augmented products: These refer to product supplements that consumers are not expecting from a given product. Thus, consumers are highly delighted when they find certain unexpected supplements included in a product. For example, umbrella, rain coat, books and pen are not ordinarily expected in a newly purchased car. A company can go ahead and include these unique and unexpected supplements in a new car to add more value to the car, surprise the consumers and influence them to purchase fast and more.
5. Potential product: A company’s augmented product will soon be discovered and copied by competitors. Hence, the marketer should look beyond the present in terms of possible augmentations that will make his/her product standout. Potential product encompasses thinking through new ways of satisfying consumers. It could be through new product development.
CLASSIFICATION OF PRODUCTS
Generally, products can be classified into three broad groups based on who will use the products, how, where and when the products will be used. The three categories of products are:
1. Consumer products: These are products directed at consumers for personal consumption. They include consumer durables such as clothing, fridge, televisions, cars, etc. and consumer non-durables (consumables) such as toiletries, food items, drinks, cosmetics, etc.
2. Industrial products: These are products directed at manufacturing or service companies for further processing into final products. They include industrial durables such as computers, production machineries, vehicles, buildings, etc. and industrial non-durables such as lubricants, raw materials, water, stationery, toiletries, etc.
Certain products are purchased and consumed by both consumer users and industrial users. How do we classify such products? The simplest way of classifying a product is by considering the reason behind the purchase. If Peugeot 406 is purchased for business use then it is an industrial product. However, if the same car is bought for personal use then it is a consumer product.
3. Services: Service simply refers to product in an abstract form. More broadly, services refer to any task (or work) performed for another or the provision of any facility, product or activity for another’s use and not ownership, which arises from exchange transaction. Kotler and Keller (2006:372) regard services as “any act or performance that one party can offer to another that is essentially intangible and does not result in the ownership of anything”. Regular maintenance and repairs of offices, machineries, vehicles, and computers are example of services in industries; they are usually outsourced. Barbing, teaching, laundry, health, and restaurant services are examples of services received by consumers.
CHARACTERISTICS OF SERVICES
Services have six basic characteristics. These are intangibility, inseparability, perishability, heterogeneity, indivisibility, and non-ownership.
1. Intangibility: By their nature, services are physically intangible – they cannot be touched, tested, smelt or seen before they are bought. In addition to their intangibility, services can also be difficult for the mind to grasp and thus can be mentally intangible.
2. Inseparability: Pure services are provided by the service employees or persons and receive on the spot by the customer. Hence, it is difficult to separate services rendered from the service persons and customers. That is, services are produced by the firm and consumed by the customer concurrently or simultaneously. That is why ‘inseparability’ is also called ‘simultaneity’.
3. Perishability: Services cannot be produced now and stored for future consumption or to meet future demand. This implies that if service is not used when available, then the service capacity is wasted.
4. Heterogeneity: It is impossible to standardize company services across board. For instance, no two teachers can teach the same way, no two tellers can attend to customers the same way and no two doctors can treat a patient the same way. Services are always subject to variations in performance, and developing realistic standards of performance is extremely difficult. This is because services depend on who provides them and when or where they are provided. Heterogeneity is also called variability.
5. Indivisibility: Unlike goods that can be divided into units, service cannot be divided into units and sold because it is essentially abstract and intangible.
6. Non-ownership: Service providers offer services to the consumers in an environment such as banking hall, stores, class rooms, hotel rooms, and hospital wards, etc. The service environment is usually decorated with fixtures and fitting such as chairs, beds, tap water, fans, towel, fridge, etc. for consumer usage. Consumers can use these items while receiving services but the usage does not confer ownership to the consumers. In other words, the consumers do not have legal title to the facilities they use while receiving services.
PRODUCT DEVELOPMENT
Product development refers to any slight or major improvement in the features of a given product; it could also mean a major innovation or a new product. Farrah (1998:102) describes product development as:
An activity leading to a product having new or different characteristics or consumer benefits. Such development ranges from an entirely new concept to meet a newly defined consumer “want” to the modification of an existing product or indeed its presentation and packaging. It forms part of a process which has to be continuous to arrest the decline era within the intrinsic life cycle of any existing product.
Generally, product development can be typified into three:
i. An entirely new product never in existence before and made to satisfy new needs (invention).
ii. An entirely new product to the company but not new to the market made to satisfy old needs (i.e. product imitation).
iii. A modification of either the package, color, quantity or branding of the existing product to satisfy old or new needs (product innovation).
Stages in Product Development
Product development involves nine stages: idea generation, idea screening, concept development and testing, marketing strategy, business analysis, product development, market testing, commercialization, and follow up.
1. Idea Generation: Idea generation marks the beginning of product development. Companies seeking for new product ideas look out for unmet customer needs. New product ideas can be generated from two general sources: the internal and external sources. Internally, product ideas can come from company employees, research and development department and other functional areas, or the top management. Companies can also search for new product ideas from external sources such as the customers, channel members, competitors, scientists, trade associations, government agencies, suppliers, academia, and private research institutes.
2. Idea Screening: At this stage, the company evaluates all new product ideas purposely to identify the ideas that meet the set standard or criteria and those that do not. Managers rely on experience to identify good product ideas from the bad ones. Other times, they use company objectives, plans and programs as a criteria for screening product ideas. New product ideas that meet the company set standards are accepted for concept development while those that fall short of the standard are eliminated. It is necessary to eliminate poor product ideas because a product developed from a poor idea could lead to absolute product failure, partial product failure, or relative product failure.
a. Absolute product failure is a situation whereby a company cannot cover its variable cost and thus incur total loss as a result of allowing poor product idea to be developed into a product and finally commercialized.
b. Partial product failure is a situation whereby a company covers all its variable costs and some fixed costs, thereby incurring some losses.
c. Relative product failure is when a company’s sales is enough to cover its total cost (variable and fixed costs) but the profit realized still fall short of the targeted profit.
3. Concept Development and Testing: The ideas that meet company’s standard are developed as product concepts. A product concept is a further development and detail description of an accepted product ideas in terms of expected benefits, function and performances. Concept development usually addresses three questions: who will use this product? What primary benefit should this product provide? And when will people consume this product? Concept development encompasses product idea, product concept, and product image.
a. A product idea refers to a possible product that the company is likely to offer to the market.
b. A product concept is a detailed description of the of a product idea in terms of expected benefits, function and performances.
c. A product image refers to the way and manner the consumers view, describe or perceive an actual or potential product.
Concept testing is to be carried out after concept development. It entails the presentation of the product concept to the targeted consumers and observing and recording their humble reactions. Product concepts can be presented symbolically (in the form of a mathematical model) or physically (in the form of a prototype). The new product model should be properly designed so that product testing will yield a reliable and dependable result.
4. Marketing Strategy: Marketing strategy is a means to achieving marketing objectives, which are targeted market share, targeted sales and profit. Hence, this stage is concerned with the development of short-term and long-term marketing strategies and plans. The company’s strategic plan is divided into three major phases: short-run company goals, short-run company marketing strategies, and long-run company goals and marketing strategies.
a. Short-run overall company goals include the company’s target market, size of the target market, market structure of the target market, targeted market share, and estimated demand, sales and profit for first few years.
b. Short-run company marketing mix strategies include the company’s planned pricing methods, distributions strategies and promotion budget for the first few years.
c. Long-run overall company strategies and marketing mix strategies describe the company’s market share, sales and marketing mix strategies over time.
5. Business Analysis: After developing a marketing strategy, the company projects the costs, sales, profit, and returns on investment for the product if it were to be placed in the market. The ultimate goal of doing business analysis is to determine whether the new product concept will enable the company achieve its set goals and objectives. If they do, the company can proceed to next stage where the concept will be fully developed into a product.
6. Product Development: Before this stage, the product has existed only in the abstract form or a prototype that is not fit for consumption. In this stage, however, the abstract product is transformed into a physically, technically, and commercially feasible product, and thus ready for market consumption. Here too, the company’s research and development department will develop few physical versions of the product concept in order to subject them to testing and determine their safety worthiness and profitability.
7. Market Testing: Not all newly developed products go through market testing. While it may be necessary to test-market an entirely new product, a modified product can be launched into the market without necessarily subjecting it to market testing. This is because the consumers are already aware of the product, thus only the improved features will be promoted to the consumers. Nonetheless, products that are delicate to human life like pharmaceutical products require market testing before commercialization.
8. Commercialization: If the market test is successful, then the product is commercialized. Depending on the market forecast, the company may decide to engage in mass production and distribution of the new product, or it may commence small production with selective distribution. Whichever is the case, the company must embark upon mass promotion in order to cause awareness among the consumers about the availability, features, price, and other augmented services of the new offering. Marketing cost represents the major cost during commercialization. Crucial decisions to be made during commercialization are where, when, how and for whom the company will launch the product.
9. Follow-Up: Once a product is commercialized and enters its life cycle, the external competitive environment becomes a major determinant of its destiny (Stanton, 1981). Thus, the need for companies to monitor the external environmental factors capable of affecting the new products’ market demand, sales, and profitability. Companies need to monitor sales, profit or loss, and effectiveness of promotion the moment the new product is fully commercialized. Companies should also collect feedback on how the new product, its accompanying services and price are perceived by the consumers. The feedbacks will enable companies to identify areas/factors that pose serious potential threat to the product success and align the marketing strategies to withstand or forestall such unwanted occurrences.
PRODUCT LIFE CYCLE (PLC)
The term “Product Life Cycle” was used for the first time by Levitt in 1965. Product life cycle (PLC) is concerned with the life of a product in the market with respect to business/commercial costs and sales measures. To say a firm’s product has a life cycle is to assert four things:
i. A product has a limited life;
ii. Product sales pass through distinct stages, each posing different challenges, opportunities and problems to the seller.
iii. Profit rises and falls at different stages of the product life cycle.
iv. Products require different marketing, financial, manufacturing, purchasing, and human resource strategies in each stage of their life cycle (Kotler, 2000:303).
Stages in Product Life Cycle
PLC is made up of five stages: product development, introduction, growth, maturity and saturation, and decline and possible abandonment. Each of this stage is characterized by factors such as sales, profit/loss, promotion, and presence of competitors as depicted in Figure 10.2.
Figure 10.2: Product Life-Cycle
These PLC stages are explained below:
1. Product development: Product development is the first stage in PLC. In this phase, sales are zero and the company’s investment costs mount. However, a new product is best developed through series of nine stages: Generating New Product Idea, Idea Screening, Concept Development, Business Analysis, Product/Concept Development, Test Marketing, Commercialization and Follow-up.
In this stage, the corporate objective is that of research and development, thus the company’s Research and Development Department handles most of the activities from idea generation to concept development. In underdeveloped nations, research is grossly underfunded and firms receive little or no support from government to carry out researches that may lead to major innovations and inventions. This is one of the reasons why underdeveloped countries have refused to attain technological advancement with its attendant benefits such as mass production of goods and services, sale of patent right, easy product modification in the home market with home-made technology, and creation of employment, etc. Majority of the commodities in the Nigerian markets are products of the multinational companies; they initiate majority of product developments while Nigerian companies follow behind as imitators.
2. Introduction stage: When a product is commercialized, it enters into an introduction stage of the PLC. The introductory stage is marked by low sales and loss. Losses and product failure rate are high at this stage mainly because of heavy expenses incurred during product development and heavy promotion embarked upon to create product awareness, as well as the challenges of finding buyers for the new product.
In this stage, firm’s main marketing objective is that of creating general awareness about the existence, usefulness, market price and other features of the product that distinguish it from competitors’ product. In achieving this corporate marketing objective, companies should adopt market penetration strategy, cost-plus pricing which ought to be relatively low, imbibe selective distribution, and heavy sales promotion to stimulate and encourage trial. Emerging medium of communication and advertising – internet, mobile phone, digital or electronic boards, etc – are effective means of reaching existing and potential customers; they complement the traditional means of advertising such as television, radio, billboards, newspapers, posters, etc.
3. Growth stage: At this stage, the company records high sales and improved profits as a result of rapid market acceptance of its new product. Consequently, competitors are motivated and attracted into the market especially if the estimated market demand, sales and profit for the industry are quite substantial. New competitors are most likely to introduce a new product with improved features, performances and other marketing mix variables thereby reducing the company’s actual market share, sales, and profit.
This stage brings mixed feelings: celebration and frustration or fear. A company celebrates because its product has gained market acceptance, sales revenue, and rise in profit. Frustration sets in when competitors are duly attracted into the industry by company’s success. Thus, a company’s marketing objective shifts from spreading product awareness to profit and market share maximization. In achieving these twin objectives, market development, price penetration, and intensive distribution strategies should be adopted. Advertising should be repackaged to include “product conviction and purchase” rather than “building product awareness.” Sellers should also shift to ‘buy-my-brand’ rather than ‘try-my-brand’ promotional strategy. Promotional expenses can be reduced and effective product services and warrantees offered.
4. Maturity stage: The company’s product eventually enters the maturity stage due to the proliferation of the market with new and better products by the competitors. Depending on the industry’s entry and exit barriers, most products stay longer at this stage. If the industry is such that the entry and exit barriers are low, few firms will remain in the business and keep producing a given product during bad times (e.g. economic recession) while many firms will stay in the business and keep producing the product during good times (e.g. economic boom). On the contrary, if both the entry and exist barriers are high, all firms in the industry have to stay back and strategize to survive during good and bad times. However, if the industry entry barrier is high but the exit barrier is low, only few firms can enter the market even during good times while any firm can exit the market during bad times thereby leaving few firms to share the market or consumers and profit, and thus compete favourably.
The stage is divided into three phases: growth maturity, stability/saturation maturity, and decaying maturity. During growth maturity, company sales and profit keep increasing but at a decreasing rate, potential consumers are no more available and hence, new distribution channels cannot be identified. During stability or maturity stage, company sales and profits are at peak and remain so for some time. Thereafter, the product enters the last stage of the maturity stage – declining maturity – and company sales and profit start to decline gradually usually as a result of consumers switching to other products. Also, marginal producers and retailers are forced to drop out of the market.
At this stage, companies have the liberty to adopt either defensive or offensive strategy. The former requires a company to maintain its market share by offering fairly improved products, matching price with competitors and lunching a new and better advertisement. The latter strategy suggests that companies should modify their market, product, and other marketing and promotional mix. In modifying the market, companies should seek for new users, develop new market segments and promote usage rate. Product modification suggests improvement in the quality, quantity, packaging, features and branding of a product. In addition, other marketing mix strategies such as cutting prices low, improving on channels of distribution and increased promotion may go a long way in repositioning the company’s product, market share, sales volume, and profitability.
5. Decline stage and possible abandonment stage: At this stage, company sales and profit decline rapidly partly as a result of increased competition, advancement in technology, and change in consumer taste. Price-cut and increased promotion strategies often do not have any effect on sales and profit anymore. This situation may force the company to abandon the product and withdraw from the business or market. Yet, the company may decide to remain in the business knowing very well that smaller firms with lesser internal economies (or relatively higher cost of production) will automatically withdraw from the market. When this happens, few firms are left in the industry to share the exiting competitor’s customers with resultant increase in sales and profit. Dropping a product and withdrawing from business provide the advantages of selling off the business assets (plant and machineries) and re-investing in a more viable business (divestment strategy). However, a product at this level can be re-modified to provide additional value to customers. Such modified products usually start a new life cycle – from introduction to decline stage. This is the secret of everlasting products like Coca-Cola, Adidas, Toyota, Peak milk, Tom-Tom, etc. Generally, there are four strategies available to firms at this stage of the PLC. These are:
i. Expand: Here, the company increases investment (e.g. spending on new product development, plant expansion and market development) in order to dominate the market and become a market leader. This is more of aggressive strategy.
ii. Maintain: In this case, the company keeps studying the industry/market indicators until uncertainties are resolved before taking further investment decisions (e.g. to expand or to divest). This is more of conservative approach.
iii. Harvest: This involves cutting business costs (cost of promotion, cost of hiring salespeople, cost of research and product development, and cost of plant expansion), maintaining sales revenue and increasing the company cash inflow. This is more of a retreat strategy.
iv. Divest: This strategy requires a company to sell off its assets (plant and machineries, and residual goodwill) to buyers as quickly as possible. This is more of a retreat strategy.
THE MARKETING IMPLICATIONS OF PRODUCT-LIFE CYCLE
There are two marketing implications of the Product Life Cycle. These are:
1. Sustained Growth: This model states that an organization needs to generate new products and services, or to enter new product and service market if it is to sustain its growth and profitability over time. Companies can also develop existing products and services so as to extend their lives (see Figure 10.3).
Figure 10.3: Extending the Product Life-Cycle
2. Appropriate Marketing Strategy: The model stresses that both the marketing objective and strategy for a given product change as the product enters a new stage of the product life cycle.
PRODUCT PACKAGING
Packaging is the process of developing a pack to collect, protect, beautify, label, promote and differentiate a product in the market place. It can also be regarded as the process of designing and producing a container or wrapper for a company’s product in order to keep it safe, clean, attractive, and distinctive.
Types of Packages
The three forms of packaging are explained below:
1. Primary package: The main container holding a product. For example, the tube containing toothpaste or a bottle holding Paracetamol syrup.
2. Secondary package: The outer or subsidiary container of a product. For example, the paper wrapper where bottled-paracetamol syrup is kept. It may also take the form of metallic container like the shipping container.
3. Tertiary package: A special type of packaging used for handling bulk or heavy goods in warehouses or shipping. Examples are wood boxes/pallets and shrink wrap.
Functions/Roles/objectives of Packaging
The functions and objectives of packaging are:
1. To hold powder or liquid components of a product.
2. To protect and preserve a product.
3. To decorate a product so that it appears attractive to the customer.
4. To facilitate labeling of a product so that it looks distinctive.
5. To comply with stipulated laws on consumer rights and consumer protection.
6. To inform consumers about the product’s name, ingredients, manufacture date, expiry date, manufacturer’s address, usage instructions, and other important information.
7. To ease transportation of products.
8. To make product consumption easier and convenient to consumers.
9. To make a package have re-use value.
Disadvantages of Packaging
There are several problems associated with packaging, namely:
1. Inappropriate disposal of product packages leading to pollution of the environment with solid wastes.
2. Use of packaging materials that do not decay after disposal thereby blocking drainages and causing floods during raining seasons.
3. Extra cost incurred by companies to create awareness on safe ways to dispose product or providing dustbins, which erodes company profit.
BRANDING
A brand is generally regarded as a name given to a product by the manufacturers to distinct a product among competing brands. Technically, brand is more expansive than just a name; it includes anything that facilitates easy recognition and identification of a given product or organization such as trademark, logo, symbol, colour, design, tonality or a combination of these terms. Therefore, a brand can be defined as ascribing a name, logo, trademarks, symbols, colour, tonality, jingle and/or design to a particular product or organization for distinctiveness, recognition, value/quality assurance, originality check, reputation track, and ultimately, price determination.
Brand is the outcome of Branding. Thus, branding is the process of determining and selecting a unique name and image for a company and its product(s) and as well implanting the name and image in the minds and psyche of customers through effective use of integrated marketing communication tools in order to distinct the product or the organization among its peers, clearly and consistently reflect the value position of the product, and ease product identification, choice and purchases that increases company sales and profitability.
The terms associated with ‘brand’ are explained below:
1. Brand name: The use of letters, word(s) or numbers to vocalize a brand. For example, ‘ABC’ Transport for letters, Indomie for word, ‘Life is Good’ for words, and ‘212’ bread for numbers.
2. Trademark: Registered brand names, logos or designs for legal protection against imitation, use or adoption by other companies.
3. Logo: Any special symbol associated with a particular brand name.
4. Colour: Property of a product/brand that reflects visual sensation based on how the product/brand emits light. That is, how the product appears to consumers in terms of red, black, white, green, blue, pink, yellow, brown, purple, or ash colours. Different brands are associated with different colours because every colour conveys distinct meaning. For example, blue is associated with authority and respect, green is associated with nature or pride, red with passion and excitement, yellow with novelty, orange with affordability, white with purity and thoroughness, silver/platinum with royalty and wealth, and black with power and authority.
5. Tonality: Musical sounds associated with a particular brand/product.
6. Jingle: A short song or tune used in advertising a brand.
7. Design: Logo, symbols, or package shapes that set a brand apart from other brands.
8. Character: This is a personified brand mark. A brand that is given human characteristics.
Characteristics of a Good Brand Name
A good brand name should possess the following characteristics:
1. Memorable: A good brand name should be easy to recall, pronounce and/or recognize by the customers. For example, Peak Milk, Bic Pen, and Dana Pharmaceuticals. Note that these brand names are short and, therefore, easy to recall.
2. Attractive: A good brand name should attract the attention of customers. For example, the brand ‘Peak’ Milk appears somewhat attractive.
3. Meaningful: A brand name should be associated with acceptable norms in virtually all cultures. It should be translatable to good things, ideas and personalities. For example, the brand ‘Peak’ could mean best, superior or highest quality product.
4. Positionable: A brand name should help communicate the position of a product. For example, the brand ‘Peak’ is truly positioned as the leading quality product in the manufactured milk industry.
5. Distinctive: A brand name should be capable of differentiating a company’s product from competing brands. A good example is the uniqueness in sound and meaning of the brand ‘Peak’ as compared to competing brands like Loya, Lather, Three Crown, Cowbell, and…
6. Likeable: Customers should find a brand name appealing, interesting, and preferable. Undoubtedly, every customer wants to excel to the peak just like Peak, which make the brand ‘Peak’ likable.
7. Transferable: A brand name should be extendable or applicable to future products of the company. The brand ‘Peak’ can be extended to other beverage products like tea, sugar, and soft drinks.
8. Adaptable: A brand name should be usable beyond one geographical market; it should also be updatable and futuristic. A brand like ‘Peak milk’ is in many countries of the world.
9. Protectible: A brand name should be the type that cannot be easily copied because it is covered by trademark, copy right and patent mark.
Role/Importance of Brands to a company
Brands are important to companies in the following ways:
1. Brands are enduring assets of a corporation. In other words, brands are everlasting assets of a company; they attract lots of goodwill; and may be valued more than some physical assets during takeover, acquisition and merger.
2. Brands help customers to enter and serve new market segments with extended brands. For example, cock drink is extended to ‘Coca-Cola Zero’ to cater for the market segment who needs sugarless cock drink.
3. Brands facilitate introduction of new product lines and categories.
4. Brands legitimize the production of a product and existence of a corporation.
5. Brands provide legal protection to the companies’ brand creativities and assets.
6. Brand loyalty provides sustainable demand to a company.
7. Strong brands attract price premiums. That is, customers are often ready to pay extra price to acquire a strong brand they are loyal to.
8. A strong brand projects the image of a large and successful business.
Role/Importance of Brands to Customers
Brands provide the following benefits to customers:
i. Brands enable customers identify the source or manufacturer of a product. This piece of information assist customers as regard which company to hold responsible if a product fails to deliver on its promises or even harm the customer.
ii. Brands allow easy identification of desired product in a market place crowded with tens of similar products.
iii. Brands such as trademarks and designs help customer to distinguish original products/brands from the fake ones.
iv. Brands usually assure customers of consistent quality. For example, different products carrying same brand name are taken to be of same quality by the customers.
v. Brands are capable of making customer loyal and immune to competitors marketing stimuli because such brands have consistently satisfied customer needs over time.
vi. Brands help in communicating customers’ role status and personalities.
LABELING
Labeling is a subset of packaging and a key feature of manufactured products. Labeling can be defined as the inscription of vital product information directly on the product container, or indirectly on a paper wrapped around and/or inserted inside the container or package. It can also be regarded as the process of determining and printing product information on the product’s container and/or package to meet legal, professional and promotional requirements in order to guarantee customers’ right to information, choice, and safety.
Functions/objectives of labeling
Labeling serves the following purpose:
1. Product origin: Labels indicate the source or manufacturer of the product as well as detail address (plot/house number, street, town/city, and country). These pieces of information allow different stakeholders to contact the manufacturer for business, philanthropic, community development, taxation, legal and private issues.
2. Brand name: Labels facilitate product branding for easy identification in the market place.
3. Product originality: Labels show trademarks of products, which may be difficult to imitate by the imitators or fake producers. This enables customers determine the originality of different brands.
4. Product grade/quality: Labeling laws demand that product grades or standards should be specified, which help customers in determining fair price for every product grade.
5. Manufactured date: Through labeling, customers are duly informed about the manufactured date of products to determine the freshness, goodness and safety of the products.
6. Expiry date: To avoid sale and consumption of unsafe products after their expiration, information on the expiration date for every manufactured consumables are labeled accordingly.
7. Product ingredients: Labels specify the ingredients used in manufacturing a particular product, including the relative measure of each ingredient. Customers who are allergic to certain ingredients used in producing a particular product would stop patronage of such product through the help of labeling.
8. Usage instruction: Labeling directs customers on how to use a particular product. Examples are how to prepare custard drink, how to couple a television antenna, and how to apply certain medication.
9. Disposal instruction: Due to environmental concerns, manufacturers are expected to clearly indicate, through labeling, safe ways of disposing packages of used products.
10. Promote the product: Labeling is a means of promoting product to customers. Colourful and well designed labels usually attract customers and stimulate purchases.
11. Possible side effects: Labeling educates consumers on the negative sides of a product, especially medical products and electronic appliances.
SELF-ASSESSMENT QUESTIONS
1. a. Define product.
b. Identify types of product/offerings
2. a. Define services
b. List and explain the characteristic of services
3. a. Define product development
b. List and explain product development stages.
4. a. Describe the term “product life-cycle
b. List and explain product life-cycle stages.
5. Explain why brands are great assets to a firm.
6. Product packaging is very harmful to consumers and the environment. Do you agree?
7. What are the functions of packaging?
8. Compare and contrast branding and labeling.
9. Every product has a life cycle – the time of birth, growth and death. While all products in the market have witnessed birth, many witnessed death and some have lived on without dying. Discuss.