The marketing mix is a tool that is made up of four unique but interconnected and interdependent variables. These are called the 4P’s and are product, price, promotion, and place. These four components help determine a clear and effective strategy to bring a product to market. Each element is crucial in its own right and needs to be given due focus.

4Ps marketing mix - product

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In this article, we look at 1) product, 2) product classification, 3) the product in Four P’s (marketing mix), 4) product decisions, 5) hallmarks of successful products, 6) product development, and 7) Starbucks – a strong product example.

PRODUCT

What is a Product?

A product is an item that satisfies a need or a desire. This can be a physical item, a service or a virtual offering. It is produced at a cost and is subsequently made available to the right audience at a price. Whatever the nature of the product, it will follow a lifecycle and through reasonable predictions of this lifecycle, a company can increase its competitive edge. A brand can be revamped or re-launched to remain relevant in a changing market or at the end of its lifecycle.

A successful product has to fulfill a specific need in the market. Functionally, it must be able to perform its function as promised. There also needs to be clear communication to users and potential customers regarding its benefits and features. Branding is another important feature for a product. Developing a product into a brand helps foster customer loyalty and recall and differentiate itself in the market.

Features and Value creation

Every product should have certain characteristics that separate it from its competitors. These characteristics should be foremost inputs to the product’s marketing mix. When a product is envisioned, it is an answer to an identified market need. This need is translated into a product with particular characteristics. These characteristics help determine all subsequent actions such as pricing, communication strategy and additional features or add-ons. For this reason, it is vital to try to create a unique set of characteristics for any product.

Unique Selling Proposition

A factor that is shown to be the basis of why one product is better than its competitors is called a unique selling proposition or a USP. This characteristic or set of characteristics helps solidify a company’s market position and allows them to stand apart from competition. There are very few products that have no clear competition in the market. Most often, there are identical products with almost the same features. In this situation, differentiation becomes of the utmost importance for the success of any product. The company needs not only to identify an USP, but also to clearly communicate this to the potential audience so that it is understood why the product is superior to other similar ones.

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PRODUCT CLASSIFICATION

All products can be broadly classified into 3 main categories. These are:

Tangible products: These are items with an actual physical presence such as a car, an electronic device, and an item of clothing or a consumer good.
Intangible products: These are items that has no physical presence but can be felt indirectly. An insurance policy is an example of this. Online items such as software, applications or even music and video files are also intangible products.
Services: Services are also intangible products but they are the result of an economic activity that does not result in ownership. It is a process that creates benefits for customers. Services depend highly on who is performing them and remain difficult to reproduce exactly.

Both tangible and intangible goods and services can be further defined and divided into the following groups:

  1. Consumer Goods – Items that are used directly by the end user such as food, clothing, cars, etc,
  2. Consumer Services – Services that are for the benefit of end users directly such as education, courier services, grooming services, etc.
  3. Producer Goods – Items that act as part of another company’s operations such as machinery or parts.
  4. Producer Services – Services that support another company’s operations such as accounting, human resource, etc.

THE PRODUCT IN FOUR P’S (MARKETING MIX)

An understanding of the elements that make up a product and those necessary to successfully sell is called the product marketing mix. Product has a vital role in developing the strategy for the overall marketing mix which includes place, price and promotion. Through a definition of the product features and benefits, the rest of the marketing mix elements are determined and agreed upon.

Understanding the Product Mix

A company’s portfolio of products makes up its product mix. Within this mix are Product lines which are closely linked groups of products. These may offer the same benefit or have shared characteristics. A product line is made up of product items which are individual units that have unique appearances, functions or price points.

Each product item will have three main elements that need to be focused on. These are the brand, the packaging, and the associated services.

Before these three elements can be defined and used as inputs to the rest of the marketing mix, product benefits and USPs need to be defined.

Understanding and Creating Benefits

Given the importance of product in the marketing mix, it is good practice to understand who is the target group, what are the benefits of an offer, how is this product to be positioned in the market, and what will the USP be?

Philip Kotler proposed one way of understanding product benefits in his popular academic work “Principles of Marketing.” He says that a product can be looked at three different levels.

  1. Core – This is the first level to be defined and explored. What is the main or core benefit that a product offers to its consumers? In the case of a camera, they are able to capture memories forever through the purchase of a product
  2. Actual – Here, any additional benefits are added on to differentiate the product and highlight its USP. In our example, all cameras offer the same core benefit. But any additional features or strong branding can offer a better product.
  3. Augmented – Finally, there needs to be an assessment of what further benefits can be offered to the customer to ensure a loyal purchasing customer. In our example, these can be after sales service, extended warranties or product support blogs or helplines.

PRODUCT DECISIONS

With an understanding of the basic product mix and benefits, a company can now begin to make important product decisions. These include:

Design Decisions: The basic decision here to identify how strong the design will be in the entire product mix. Will it be a supplement to the features or will the features be designed around a unique design.

Quality Decisions: The quality of the proud needs is kept with the other elements of the marketing mix. A high price can be charged if the product has superior quality.

Features Decisions: What will be the final features of the product? Will they add to the perceived and actual benefits of the product? Here also, the company can charge a premium price for additional desirable benefits from features.

Branding Decisions: Branding decision remain some of the most important as it turns a product into something beyond just a good. A brand can have the power to generate instant sales as well cement confidence in the product’s quality and reliability.

PRODUCT DEVELOPMENT

Product development is the creation of a new or different product that offers innovative new benefits to the end user. This includes both the creation of an entirely new product and modifications to an existing product. These changes or new introductions may be targeting a newly defined customer requirement or a niche category in the market.
Product development traditionally includes the following steps:

  1. Generate Ideas
  2. Screen Ideas
  3. Develop and Test Ideas
  4. Analyze for Profitability Potential
  5. Conduct market or Beta Tests
  6. Finalize Technical Aspects
  7. Finalize Commercial Aspects
  8. Conduct Post Launch Review

For more information on Product Development, consult this post.

Product Development Considerations for New Businesses

The step wise process for product development may not be an option for entrepreneurs who have limited resources at their disposal. Often, they may need to manage several steps simultaneously to ensure a quick product development process at a lower cost. They may also need to go through a comprehensive product planning phase where they can understand the market potential of an idea before actually committing to development. This plan can include a thorough analysis of the market, competing products, pricing strategies and potential, and manufacturing costs and logistics. These analyses, if positive can help set a strong stage for the product development plan. If they are not encouraging, then the product idea may have to be reevaluated.

Product Life Cycle

An important consideration for any product is the logical stages of its lifecycle. A typical product goes through the following stages:

  1. Introduction – Slow growth period following product launch
  2. Growth – Fast growth phase once the product is established
  3. Maturity – A period of slowdown in sales as the product becomes ubiquitous in the market
  4. Decline – A downward sales as the product is no longer fulfilling a need or there are better options.

A keen eye needs to be kept on the product’s journey through the lifecycle. A close to reality prediction of this path may help the company relaunch or redesign an existing product or work on introducing a new one to the market. A detailed look at the product life cycle can be found here.

HALLMARKS OF SUCCESSFUL PRODUCTS

For a product of any nature to be successful, it needs to:

  • Satisfy identified customer needs or wants
  • Be of the right quality to allow higher price points
  • Be low cost in production and delivering to a customer to ensure better profit margins
  • Be durable and attractive in its appearance to match the price and the brand image
  • Able to stimulate new needs or unidentified desires

Key Questions in Developing Successful Products

In order to develop products that meet the criteria specified above, a product development team can ask the following questions during the brainstorming and design process.

  • What does the customer want from the product?
  • What hidden need does it address?
  • What features does it need to have to meet these wants and needs?
  • Are there any overlooked features that can add value?
  • Are there any added features that add no value?
  • How will the product be used by the consumer?
  • Where will the product be used?
  • What does the product look like? How big or small? Colors and materials?
  • What should the product be named?
  • What will the branding strategy be?
  • What will be the product’s USP?
  • How will it be communicated to the audience?
  • What will the cost of production be? Can the features, benefits and branding bring in a logical price to offset the cost and make a profit?

These questions will help any organization critically evaluate a product plan or an existing product due for a revamp.

STARBUCKS – A STRONG PRODUCT

Starbucks has managed to create an extremely strong brand over the years. A constant focus on marketing, brand development and the product has enabled the company to become the largest coffee shop chain in the world. The company takes customer feedback very seriously and makes it a point to meet and exceed customer demands in keeping with core brand values.

The USP and the core business for Starbucks is the extremely good coffee. The company has refined their business model to keep a focus on this product and ensure that the customer always gets the best possible cup of coffee through the Starbucks experience. The company allows customers to build their own recipe online and then have a barista in a store make it for them.

There is also a policy in place to provide a free cup of coffee if a customer is not satisfied with what they have gotten. This shows a strong focus on the customer.

A few years ago, the company made the decision to eliminate the breakfast sandwich business to focus on the core product: Coffee. This was determined to lead to a significant reduction in cost. One reason for this was also that the breakfast sandwich smell clashed with the traditional signature coffee smell, thus taking away from the experience. This shows a focus on the core product and the adaptability to change product lines when needed.

This focus on core product and customer needs have enabled the giant brand to stay ahead in its industry and become the benchmark for competitors.

Product: A Tool of Marketing Mix

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76 comments

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1
Kennedy Osagie

I thoroughly enjoyed the style and simplicity of this article. It brought the point home without begging it. It was wonderful.

2
risikat temidayo adeyemi

i carefully read through all these educative articles, in fact, i am fully loaded now, i flashed back and saw that all that i was doing before, the way i was managing my business, was total mess, no wonder i kept spending money and the income is not forte coming, ah, God, i really appreciate mr tony elumelu for initiating this entrepreneural programme,money apart lets talk about the free mentoring he is offering trying to make our bussinesses a sucessful one. with all this lectures and articles, and mentoring, all centered on taking african businesses to a greater height, i think we are almost there.

3
Itopa Zubairu

This is a wonderful and mid blowing piece of article. It has helped to widen my thinking and strategy marketing and as well as how be adding value to my company.

4
iradukunda lyse

important article in the case that even you lunch a good product on the market without to do marketing of it, the product will not be sold. but we must know how to make a promotion for a product to sold it.

5
Florence Onwumere

This is a wonderful topic very insightful and will help me in my entrepreneurial journey

6

A perfect article for every aspiring entrepreneur

7

These are all it takes to actually be at the top, unique products and be customer eccentric

8

Very Insightful piece, well written and straight to the point. I now know why most new businesses fail and how top class businesses like Apple, Samsung, e.t.c remain top class with all the competition out there.

9

Very interesting, there is more to being an entrepreneur than just making a product, you need to know how to stay in the market first.

10

Enlightening! The article makes me feel much more confident in my product, Thank you Mr tony elumelu.

11

great, all I need to offer an unique product to more satisfy my client.

12
Oduwa Agboneni

A wonderful article to help build up a product, sticking to your core value and unique selling proposition. It has taught me to always exceed my customers needs and do a continuous product development in order to stay ahead of the competition. The Starbucks case study made it simpler for me to understand, focussing on marketing and brand development. Special thanks to TEEP 2015 for exposing me to this article.

13

This is very helpful.

14
Arthur Mugwanya

Very informative on the topic.

15

My customer satisfaction and (not profit maxization) should be and remain my ultimate priority.

16

very informative article.feels like i just finished a course on product marketing and development,all in one article.thanks.

17
Natina Olu-Sawyerr

Enlightening!

18
Bertrand Urama

The 4p's actually are the aim and objective of an entrepreneur. It is well documented.

19

providing the best quality product at a low cost is very important factor to bear in mind. This topic is enlightening.

20

Great Read, insightful and helpful.

21

4ps not to be forgotten. Tweeting it now. Awesome and educational.

22

very insightful

23
ukamaka Ugwuoju

This is a mind blowing article. Very educative and we'll crafted. This will help me in my entrepreneurial journey. Thank you Mr.Tony Elumelu we are great fully sir.

24

Very glad to hear your kind words, Ukamaka. Cheers, Martin

25

EI is deep comprehensive strategy, so direct and apt

26

Thanks James. We try to be as educational, direct, and applicable as possible. Cheers, Martin

27

if anyone must succeed in business then this is not just a must read it is a must do thing for every entrepreneur.

28

Thank you sooo much!

29

Wow! wonderful and educating. Without applying the four Ps it is very difficult to market your product or services. Thanks

30

Hi Jerry,

True! If you forget to apply the four P's then you might risk getting your product to market successfully.

Cheers,
Martin

31

Informative write up

33
Zachary Ireri

This has been a very insightful and educative article to help entrepreneurs understand the key components of marketing which are the basis of business profitability, the product, price, place and promotion managed well lead to successful business venture. Thanks to Tony Elumelu foundation for the endeavor to keep opening the eyes of the budding entrepreneurs of Africa in a full exposure to business ecumenism.

34

Thanks for your kind words, Zachary. We wish you all the best with your ventures.

35

very simple and straight to the point

36

Thank you soo much, John.

37
Omitogun Abolaji

this is educating, its like recieving a lecture in class; thanks again for shinning the light on this aspect

38

Thanks for your feedback, Omitogun!

I hope it really helps people to understand the Marketing Mix overall and the Product in the Marketing mix and to apply it to their business.

39

Couldn’t have been put better! Spot on!

40

Thanks, Nick!

41

very helpful

42
OIufemi Awogboro

This is so mind blowing and on point, a must read for every start up

43

Great! Thanks a lot, Olufemi!

44
Ayodele Donald OPADOYIN

This very insightful, I could remember taking this topic in one of my courses in Management in the University, but this is coming when I need to practically apply it in my Business idea, Product modification, Branding,etc.

45

This is truly an amazing tool for every manufacturer! If you think you know it all you are just getting started. This article will jolt you to the next level.

46

Read and well grasped. The Marketing mix of the 4Ps- Product, Price, Promotion and Place being very crucial aspects of marketing that if well managed and manipulated will see the needs of the customers met and the goals of your business being attained.Generally the 4Ps summarize all aspects of product and how, when and where they reach the customer.

47
Fatima Ojeosuman

Wonderful piece with so much information.

48

Wow. This is very rich

49
Johnson Alaba

This is condensed MBA! Great article.

50
Enoc AZONHOUMON

Great article.I have learnt a lot about the Marketing tools.Congrats

51
Gana Wakanbaga

the article has said it all. everything an enterpreneur needs to be successful

52
Alice Uwarugira

Important article for me and for every entrepreneur, It contained necessary information an entrepreneur need to succeed.

It is Very helpful.

53

Wow this is Great and impactful. This article has seriously exposed me to some marketing strategy.

54
Tuleun Kelvin Aondohemba

This is brilliant. Exceptionally awesome.

55

this is very informative. this goes beyond the 4P we learn t in the university.

56
Emebet mekonnen

I found it very interesting

57
Esther Katiba

Very insightful. Starbucks customer focus is out of this world. Understanding your customers is key.

58

Great marketing insight for startups, and an archiveable article!

59
totalimpactblog

Wonderful piece. The important of the four marketing mix can not be over emphasize in building a business.

60
Ir. Anatole NDIKUMANA

Very very interesting this article. Thank you very much for the compliment you give us.

61

A very educative article

62
Ajayi Temitayo

What an informative and enlightened write up its so educative I have learned many things that wl improve my business tanks to TOE and the writer

63
Sogbein Segun

Thanks for this insightful articles, it has add to my idea as a start up, i have downloaded it for future guideance.

Thanks

Segun

64

This is highly education and well detailed informative for upcoming successful entrepreneur. Thanks to the Board of Team at TEEP 2016. I cannot help but to copied it out and save it on my document for further reading.

Opakunle Olusegun

TEEP 2016

Education and Training

Special Education Services.

65
fortune denis kalala

Very interesting article, well arranged to be understood, and I do. its real boost me and am sure to use it to develop my products so as to satisfy my customers needs.

66
Fortunaus Udogadi

Precise and succinct lecture.It brings to bare a whole new insight in product development,which will surely help us to refine our product. Thank you TEEP team for the knowledge.

67
Ogheneovo Anthony

Great works! It reminds me of some of the works I did on Marketing when I was doing MBA. This is more of a refresher course with practical insight....

68

A very educative and enlightening article.

69
Chigozie Anselem Omeoga

This article has enlightened me on the best strategy to deploy in order to get the best out of my market. I can't forget the 4 P's for magical marketing- Product, Price, Promotion and Place. Great!

70
Enyika Iheanyichukwu Godson

Very interesting article to help young entrepreneurs like us build up a product, sticking to core value and unique selling proposition. It has taught me to always exceed my customers needs and do a continuous product development in order to stay ahead of the competition. Special thanks to TEEP 2016 for exposing me to this article.

71
Ayoola Olayemi Abigail

Thanks, this article is an eye opener,Although the services I offer are not new but the article shows me how I can modify it more and satisfy my customers need identify their desires which will give new benefit to them.

72
Sufyan Lawal Kabo

Having read this article, I became more renewed in my business mission and strategy. If entrepreneurs would adhere to understanding this fully, their ideas about business would entirely be overhauled. This is far beyond just an article, we better call it a full course, a refresher etc. Great work from TEEP.

73

Wao, a nice article for new entreprenures seeking to create value and market the products like me

74
Sufyan Lawal Kabo

I am amazed with this article. Any time I read such, I feel I have been returned to the school and that gives me courage on what I am doing. With such, I get the feeling that venturing into a business does not require just a capital-acquiring business skills should come first. Surely, in due time, Africa shall be great!

75

Really great and enlightening article. Really got to the basics of products and product development, the Tony Elumelu Entrepreneurship Programme will definitely lead to a great many African business successes

76

Great article for a stress free product development strategy .. I will work on them step by step to develop a competitive product.