The Product is the good or service that an organisation offers to its target market. It should meet customer needs and wants and be distinct from competitors. Elements such as product performance, package design, warranty coverage, intellectual property (patents, trademark and copyright) and after-sales service are critical in determining success.
As a result, before the Product enters the market, there are several questions to be considered:
Branding is essential in making your product distinct from your competitors. When the attributes that a product promises form a connection with consumers’ needs and wants, then a perception of added value is shaped in consumers’ minds which develops loyalty. The following examples illustrate how three popular brands failed to convince consumers about their choice to enter new product markets.
In 1982, Colgate was already an established toothpaste brand. However, Colgate’s entry in the frozen meal industry, resulted in “cold” sale volumes and the company withdrew its products during… the dinner time.
In 1989, French company Bic entered the fragrance industry, launching a low priced perfume for men and women, spending nearly $20 million in marketing. Just a year later, with unexpectedly low sales and a loss close $11 million, Bic decided to exit a promising market.
In Spring of 2001, McDonald’s opened two 4-star hotels in Switzerland with the name “Golden Arch Hotel.” The bedroom decor was modern and brightly coloured and the accommodation rates ranged for $120 to $160 per night.
The hotels didn’t deliver the expected results. After two and a half years, McDonald’s shifted its focus away from such brand extension, and as a result both hotels were sold.
A meaningful, likeable and memorable Logo is the foundation of your brand identity. It is recommended that the choice of colours and shapes used in a logo, must represent brand values and aspirations
For example, the black colour is usually associated with power and sleekness thus it is often used to market luxury and fashion items. Research depicts that red, orange and yellow are attention-grabber colours and tend to increase desire for fun and appetite, whereas purple is used in beauty and baby-related brands as it is associated with calmness and soothing. In the same way, bold letters in logos are related with importance and quality, whereas a square-shaped logo suggests balance and stability.
Slogans are also essential in branding. They should be short, meaningful and emphasise brand values. It is highly advised to trademark your logo, slogan and any other form which distinguishes you from competition (package design, symbols, etc.
Product packaging and shape is equally important as it should be carefully designed in order to be directly associated with your brand, ease product consumption, and enable product transportation and at-home storage ease.
A popular product strategy in the 2000s was Product Proliferation, whereby companies were deliberately offering to the market many variations of the same product with minor modifications, such as colour and shape variations or slightly different product features and uses (Barry, 2011)1. Good examples of this strategy can be found today in the car industry and in the personal care market.
The main goals of such strategy are
(i) to control shelf space presence with the aim to eliminate potential competition, and
(ii) to attract a bigger market share by satisfying needs in diverse or neglected market segments. However, the vast variety of product lines tend to create confusion among consumers and adds complexity to the producer as it has to comply with high inventory costs and possible diseconomies of scale.
1 Barry, B. (2011), “Strategies to Reduce Product Proliferation”, Business Horizons, 54 (6), 551-61