Commodity policy requires the adoption of mutually consistent decisions regarding individual commodity items and product mix. Each commodity unit offered to consumers is conveniently viewed from the point of view of three levels (Fig. 2).

Figure 2 - Product levels

The first level - the concept of the product - is the core of the concept of the product as a whole. At this level, it is still not so much about a real object or service, but about those needs that the future product must satisfy. For example, cosmetics are thought of as a means to make a person outwardly beautiful, a drill as a means of making holes, etc.

At this level, they answer the question: what will the buyer actually buy? After all, in essence, any product is a service enclosed in packaging for solving some problem. For example, customers do not purchase drills of a certain diameter, but holes of the same diameter. Therefore, the task of the market operator is to reveal the needs hidden behind any product and to sell not the properties of this product, but the benefits from it.

The second level is an item or service in real performance. The developer has to turn the product by design into product in real performance... At this level, the product should have the following characteristics: a set of necessary properties, quality level, specific design, brand name and specific packaging. For example, lipstick, drills are real products. A product in real design can have five characteristics: quality, properties, appearance, brand name and packaging.

The last - third level - goods with reinforcement. This is actually a product with additional services and benefits attached to it, which together constitute a reinforcement. This can be attracting personal attention to customers, home delivery of goods, money-back guarantees, etc. If we consider a computer, then instructions, work programs, delivery, programming, repair, warranty, and other services serve as a reinforcement for a product. The idea of \u200b\u200bproduct reinforcement forces a market leader to take a closer look at the customer's existing system of consumption as a whole, to how the buyer of the product comprehensively approaches to the problem he is trying to solve by using the product. With this approach, it is possible to identify and apply the most competitively effective ways to reinforce your product offer.

In addition to these three levels, in some cases, the fourth level is also considered. This is a consumer product. It combines the previous three levels plus product characteristics that provide consumer acceptance, image and new perspectives for self-expression.

When making decisions on a product, the enterprise must clearly understand the economic consequences of such decisions (costs and benefits). So, for example, when making decisions on guarantees, it is necessary to provide for the costs of ensuring the guarantee obligations (warranty workshops, spare parts, personnel, etc.). When selling goods by installments (crediting the buyer), one should keep in mind the increase in the company's working capital. When making decisions on the development of the company's trademark policy, it is necessary to decide whether it is necessary to resort to the use of trademarks at all, because this will lead to additional costs (patent research, brand development, patenting). When making decisions on the delivery of goods to buyers on FOB, Franco, CIF, "free" terms, it is necessary to clearly understand who pays for the freight, insurance, as well as the moment of transfer of ownership from the seller to the buyer and taking on the risk of accidental loss or damage to the goods.

In the factory we produce cosmetics,
and in the store we sell hope.
Charles Revson, Revlon

Each new product, product, service is created to meet the needs of potential buyers. Philip Kotler identifies several levels at which the product must meet the needs of the consumer in order to be successfully sold on the market. But before we move on to studying them, let's define the basic concept: what is a product?

Product- is everything that can satisfy a desire or need and is offered to the market to attract attention, purchase, use or consumption. These can be physical objects, services, persons, places, organizations and ideas (Fundamentals of Marketing, 5th European edition, 2015, F. Kotler, G. Armstrong, W. Wong, D. Saunders).

Product development - this is a rather lengthy process, because even at the design stage, the developer must evaluate the future product at three main levels:

1. product by design - how the product will solve the consumer's problem or what benefit he will receive by purchasing the product;
2. product in real performance - how the product will look, what are its main characteristics, packaging, name, quality;
3. goods with reinforcements - product benefits based on the two previous levels. The additional value of the product, for the sake of which the consumer will purchase it.

Product development is based on the product level by design. It is at this stage that the manufacturer must answer the question: what is the consumer actually buying? What problem do we solve by offering him our product? What are the benefits for the consumer?

By purchasing a beautiful dress, a woman is actually buying self-confidence. By buying a drill, a man is actually buying a hole in the wall. By purchasing an expensive smartphone, the consumer is actually buying belonging to a certain social stratum.

Product in real performance

At the level of real execution the product gets a physical shape.

Kotler highlights 5 main characteristicsthat the product should have at this level:

Quality
properties
external design
brand
packaging

Any product that you purchase has a set of characteristics, even a service. Turning to the hairdresser, you get the packaging - the service, the appearance of the master, the brand - the name of the salon and its reputation in the city, the exterior design of the beauty salon, etc.

The main task this level is to convey to the consumer the main advantage of the product. For example, Nokia phones are reliable, Iphone is the best smartphone on the market for a number of characteristics, Samsung is distinguished by display brightness and color saturation.

While highlighting and trying to convey to the end consumer the main advantages of the product at the level of real performance, we are not yet talking about competition. So far, these are only distinctive features that make it possible to differentiate products in a variety of offers. Real competition begins at the level of the reinforced product.

It is at this level that manufacturers offer additional services that turn material consumption of a product into an emotionally intense action. For example, when buying the services of an Internet provider, we expect that in case of connection problems, we will be able to get a free consultation, call a specialist at home, or receive detailed troubleshooting instructions without leaving the computer. But over time, such reinforcements become commonplace, and truly progressive companies are looking for more and more ways to provide the consumer with new reinforcements.

In fact, by purchasing almost any commodity (including even consumer goods), the consumer is purchasing something more than just a physical item, service or object. When offering even an idea for sale, the developer must present it in such a way that the set of characteristics of the idea satisfies the buyer's need and surprises with reinforcements. A product for a consumer is a complex set of benefits that are of the highest priority for him at the moment.

Remember! A product must be assessed at three levels before you begin production.

TOPIC 4. PLANNING OF GOODS IN MARKETING.. 1

4.1. Understanding the product in marketing. Classifications of goods. 2

Three levels of product understanding in marketing. 2

Product classification. 2

4.2. Assortment policy of firms.. 4

The main options for the product range. five

Policy directions in the formation of the product range. 7

4.3. Trademarks. Branding. 8

4.3.1. Trademarks.. 8

The main types of designation of trademarks. 8

Functions of trade marks and brands. ten

Main types of brand names .. 10

Brand Name Distribution and Replication Strategies .. 11

Analysis of the product range and brands of chocolate factories in the market of St. Petersburg. 12

4.3.2. Branding. 13

Components of the brand concept. 14

Branding history. 15

The most expensive brands in the world. 15

An integrated approach to the brand. 17

4.4. Packaging as a subject of research in marketing. 17

Key factors in packaging design .. 17

4.5. Product positioning on the market. 18

Positioning aids. eighteen

Product positioning options on the market. 20

4.6. Competitiveness of the product. Factors that determine it. 21

The concept of competitiveness .. 21

Competitiveness parameters .. 22

4.7. Organization of product management in the company. 26

4.8. Product life cycle. 28

Types of life cycles. 29

The main stages of the traditional life cycle. thirty

4.9. The importance of new products. Types of novelty.. 36

Novelty in terms of significance of innovations .. 36

Classification of innovations in terms of novelty. 37

Reasons for Failure of New Products ... 37

4.10. New product planning process. 37

Sources .. 39

Understanding the product in marketing. Classifications of goods

In marketing, a product is understood not only about the goods themselves, not only physical entities that we use as consumers: food, clothing, household appliances. The understanding of a product in marketing is much broader than that which we encounter in everyday life. The category of goods includes services, information, and much more.

Product Is everything that can satisfy a need or need and is offered to the market for the purpose of attracting attention, purchasing, using or consuming. These are physical objects, services (transport, legal, medical, marketing) information, ideas.

The range of products is not limited to this list. What is a commodity in marketing is quite an interesting topic for a presentation at a seminar.

In marketing, it is recommended to consider a product at three levels, each of which carries a certain load, reveals an element in the understanding of the product. Philip Kotler depicts these three levels as three concentric circles.

Three levels of product understanding in marketing

In the center - product by design (1) - the main benefit or service that is provided to the buyer. The main idea of \u200b\u200ba vacuum cleaner is to quickly remove dust, a car is to move a person or a load. The overall strategic success of the product on the market depends on how closely this idea meets the needs of the potential client. If initially this core was defined incorrectly, then under no circumstances, even with the most talented and competent marketing, the product will not be in demand.

Product in real performance (2) - properties and qualities of goods, design, packaging, brand name. Many elements of this real performance will be discussed in detail in the lectures. In particular, about the brand name, packaging, definition of competitiveness, as a certain combination of properties and qualities. One way or another, the set of properties without which this product cannot exist is a product in real performance.

There are also some elements that do not belong to the product itself, but without which the product may not be in demand in the market. These are the elements that ensure the acceptance of the product more favorably and ensure its exploitation more effectively. This is the third level of understanding the product - goods with reinforcements (3). This includes a range of services that generate greater demand for a product and make it more efficient for its use or operation. These are, for example, after-sales services, terms of delivery and lending (for example, the modern real estate market is a market for 90% of purchases on credit, and without these services there would be no market at all), installation services, warranty service. The listed services are universal. Also, for each type of product, there may also be specific services that are determined by the peculiarity of this product. For example, transport service as a type of service has its own services that are included in the category of reinforcement: for example, services that provide easier access for the client to the transport service.

Product classification

The parameters of marketing services, marketing support depend on the place of the goods in this classification. This place determines what elements the marketing support will consist of. Let's designate the two largest groups within the classification:

Goods as physical objects

· Services.

The terms of their marketing support vary greatly, this is primarily determined by properties (characteristics) of services distinguishing them from goods in material form.

The first characteristic of the service is intangibility ... This feature greatly affects service marketing ... For example, services are difficult to advertise because they need to be visualized first. A product as a physical object can be demonstrated, shown in the process of use, associate with it the good mood of the people who consume it. The service itself is difficult to show, especially services whose consumption process is hidden, for example, a banking service. In television spots where the bank's services are advertised, more often than not, attention is focused rather on the positive emotions of others, and the service itself is not shown anywhere. It is difficult to do this, and it is inefficient to visualize it in this case.

The process of developing a service is also difficult, and this is due to its intangibility, as well as the fact that the services not subject to storage (second characteristic of services). This complicates the planning process. So, as an example, let's compare goods and services produced for the same amount. If the owner of an industrial furniture manufacturing enterprise fails to sell the goods produced this week, he can do so the next. The furniture remains in the warehouse. But if the owner of the hotel was unable to hand over the rooms during the week, then this income is lost forever. Accordingly, planning services requires more responsibility than planning goods, and a greater risk inherent in marketing services than marketing goods (third characteristic).

The last characteristic is inconsistent quality of services , compared to the quality of the goods. If you buy a video recorder from a series manufactured by the company "SONY", then with a fairly high degree of confidence we can say that the properties and quality of this product will correspond to the rest of the units within the series. If any property or quality is absent, then this product will be replaced. The quality of services depends on many factors. Let's say foreign language teaching services. The quality of these services depends: on the qualifications of the teacher, on the correspondence of his temperament to the student's temperament, on the mood of both the teacher and the student, etc. The above conditions affect the differences in the marketing of services and goods.

The above classification of goods-services also has an internal division.

Products are divided into two subgroups:

· products consumer purpose (household appliances, clothing);

· products for industrial purposes (used in the production of other goods: machine tools, equipment, electricity, fuel, vehicles, communication systems).

Services are also divided into two subgroups:

· consumer services;

Services for industrial purposes .

Due to the fact that the characteristics of services are extremely diverse, they are additionally classified according to the following criteria:

Consumer services related to the rental of goods (rental),

Services with consumer-owned goods (repair),

· Personal services of a non-commodity nature, i.e. they are not related to the operation or maintenance of a particular product (training, legal services).

As for production services, there are a lot of different classes and groups here, so let's designate the main ones.

To the rank production relate:

Maintenance and repair services,

Business consulting services,

Financial services (money transfer, account maintenance, purchase and sale of securities),

· marketing services,

· Information services (supply of information, maintenance and maintenance of data banks, processing of this information).

In some cases, it becomes necessary to give an even more detailed classification. So, for example, to determine the parameters of the marketing provision of goods or services, it makes sense to classify goods based on shopping habits :

· products daily demand (the buyer purchases them without much hesitation quite often: toothpaste, salt, soap, bread, etc.). For such products, the decision-making process is very short (spontaneous decision) and they are often bought based on habits.

· products preselection , i.e. those that the consumer, in the process of choosing and buying, usually compares with each other in many respects: quality, design, price, etc. (cars, household appliances, jewelry).

· products special demand - goods with unique characteristics, for example, branded goods that fall into the category of particularly fashionable, goods for the sake of which buyers are willing to spend additional efforts, an immeasurably long time. Very few products fall into this category, but if a product falls into it, it acquires very special characteristics in the minds of buyers, which are not determined by its quality and design in the aggregate. The marketing support of such goods has a special set of activities.

· products passive demand ... These are goods that the consumer does not know about, or knows, but does not think about buying them until the need arose. Thus, cargo transportation services, from the point of view of an individual client, belong to this category; funeral services.

A more detailed classification of goods is given in the textbook by F. Kotler.

“Marketing for Government and Public Organizations” is a revelation book designed specifically for public sector workers. It contains dozens of success stories of government organizations of all types and from around the world. World renowned expert Philip Kotler and social marketing consultant Nancy Lee show that marketing is not just another item of expenditure and not only communications, but a whole range of measures to improve the living standards of citizens. The book will acquaint you with the basic foundations of marketing in relation to the public sphere, teach you how to use marketing tools in order to gain the support of citizens and influence public opinion in general. The ultimate goal of these activities, to which the idea of \u200b\u200bthe authors comes down, is to increase the revenue side of the budget of the state structure and reduce the expenditure side.

Real product Is a more obvious concept that includes aspects such as product quality, performance, packaging, style and design. Any brand name used is also included. Ideally, each of these decisions is based on the needs and preferences of the customer, taking into account the availability of alternative (competing) products.

Let us illustrate this with examples of the characteristics of E-ZPass, an electronic toll collection service on the East Coast of the United States. After depositing a certain amount into the opened account, the driver receives a small card with an electronic chip, which he attaches to the inner surface of the windshield of his car. Whenever the driver approaches a toll station, he is able to move in the lane served by the E-ZPass system. An antenna installed at the checkpoint reads information from the card and debits the required amount from the driver's account, which eliminates the need to slow down, look for change, receive a check or token. At the request of the driver, he can always be provided with a printout of the withdrawal of funds from his account. This innovation has helped to increase road capacity and reduce the wasted fuel associated with traditional toll collection.

Reinforcement product provides additional features and services that give the transaction value that exceeds the expectations of buyers. Most consider this level of the product to be optimal, and some even qualify it as ideal. Your product doesn't have to reach exactly this level. However, in many cases, such reinforcement can be a key differentiator from competitors' offerings (for example, a local college that provides special English lessons for non-native speakers). For campaigns to change social behavior (social marketing), it can be exactly what is required to stimulate the necessary (for example, joint hiking of campus residents as part of a program to stimulate student physical activity), remove barriers (for example, a path map for walking) or supporting specific behaviors (for example, a diary to record daily exercise).

Table 3.3 provides various examples to illustrate these levels of product in the public sector.

Table 3.3. Examples of product levels in the public sector

To illustrate the features of the three levels of a product, consider an example of developing a project for testing for AIDS infection.

At the level product essence Potential benefits of testing to target audiences include clearly identifying whether the person being tested has acquired immunodeficiency; deliberate non-proliferation of the disease; for pregnant women - in taking urgent measures to treat an unborn child; in creating conditions for a longer and higher quality life due to the ability to start treatment in the early stages of the disease. There are also several options real product - that is, testing as such: blood tests, oral questioning, urinalysis, rapid tests, home testing kits and tests as part of annual preventive examinations. Finally, potential reinforced foods (which, as noted earlier, can increase the likelihood that a member of the target audience will be tested) may include services such as counseling, support groups, testimonials from those who have received treatment, advice on how to protect themselves from possible infection.

The choice of the option at each of these levels is determined by the profile of each target audience - demographic and geographic characteristics, current behavior, existing barriers and the presence of motivators. Suppose, for example, that the target audience for an AIDS testing campaign is pregnant women who could potentially become infected with the disease. A product development strategy for this market can be designed as shown in Fig. 3.4.

Exists three product levels: product as intended, product in real performance and product with reinforcement.

1. Product by design (core of the product) - the core of the concept of a product as a whole. At this level, they answer the question: what will the buyer actually buy? After all, in essence, any product is a service enclosed in packaging for solving some problem. For example, customers do not purchase drills of a certain diameter, but holes of the same diameter. Therefore, the task of the market operator is to reveal the needs hidden behind any product and to sell not the properties of this product, but the benefits from it. In other words, this is the concept of a commodity.

2. Product in real performance... The developer has to turn the product by design into a physical object. For example, lipstick, computers, etc. - all these are goods in real performance. A product in real design can have five characteristics: quality, properties, external design, brand name and packaging.

3. Goods with reinforcements. The developer can provide for the provision of additional services and benefits (supply and credit, installation, after-sales service, guarantees). If we consider a computer, then instructions, work programs, delivery services, programming, repairs, warranties, etc. serve as reinforcement for the goods.

4. Goods in the full sense. The developer considers the product in the full sense from the point of view of how the buyer perceives it.

Classification of goods and their consumer properties in terms of marketing

Classification of consumer goods:

1. Consumer goods: purchased without hesitation and comparison, for example, toothpaste, ketchup;

- Impulse buying goods - magazine, chewing gum;

Emergency goods - umbrellas, shovels.

2. Pre-selection products: before purchasing, the options are compared: similar - one quality, different prices; dissimilar - must have a wide range.

3. Special demand goods: have unique characteristics and brand preferences, not comparable;

4. Passive demand goods: they don't think about buying them (life insurance, encyclopedias). Require personal sale.

Consumer properties of the product:

1. Social purpose properties: the demand for goods by consumers depends on the ability to pay and social norms of consumption. In addition, from the season, style and fashion.

- Functional properties: the ability to meet the needs of the buyer. They are divided into three groups: the beneficial effect of consumption (qualitative and quantitative indicators); universality - the breadth of the range of application of the product; auxiliary functions - characteristics of the goods during transportation, storage, maintenance and repair.

2. Reliability of goods in consumption: the ability of a product to fully perform its functions during its service life. Groups of reliability indicators: reliability, durability, maintainability, preservation.

3. Ergonomic properties: convenience and comfort of using the product at all stages. Groups of indicators of ergonomic properties: Hygienic - illumination, dustiness, temperature, humidity, etc., anthropometric - conformity of the product and its elements to the shape and mass of the human body: size, weight. Physiological - the correspondence of the product to the power, speed, visual, gustatory, sound, gustatory and olfactory capabilities of a person, psychological - the correspondence of the product to perception, thinking and memory.

4. Aesthetic properties: the ability of a product to express its socio-cultural significance, such as conformity of form to content, style, fashion, environment, proportionality, etc.

5. Environmental properties: the level of harmful or beneficial effects of the product on the environment during storage, transportation and consumption.

6. Consumption safety: characterizes the safety of using the product. Types of security: electrical, chemical, mechanical, fire, biological, vehicles.

8. Economic properties: consumption of material to create a product and fuel and energy - in the process of consumption.

Product life cycle

Different products have different life cycle lengths and each stage: from several days to several decades. One of the tasks of marketing is the rational lengthening of the life span of a product on the market. The life cycle of a product can be represented by four stages: implementation; growth; maturity and decline.

Fig. 3.1. Product life cycle

Implementation stage characterized by an excess and unloaded production capacity, since the release of goods during this period is carried out, as a rule, in small and medium batches. The production is distinguished by a high production cost, since the technology of its production has not yet been fully developed. The profit is insignificant or there is no profit at all, the company incurs losses on the new product.

Growth stage is characterized by full utilization of production facilities. There is a rapid growth in sales, sales of goods are high. The firm begins to receive profits, sharply increasing and reaching the end of the growth stage of the maximum value.

Maturity stage associated with some excess production capacity. The demand for the product acquires the character of a standard one, there are repeated and multiple purchases of this product. At the end of the maturity stage, there is a state (or stage) market saturationthis type of product. Sales and profits decrease. The main demand comes from conservative buyers, while innovators are looking for new substitutes.

The recession stage is associated with a significant excess of production capacity. Product prices are low. Profits are plummeting. Marketing expenses are negligible. The product is gradually being replaced with a new one.

Assortment strategy

Product policy involves the development of an assortment. Assortment policy objectives can be:

Customer satisfaction;

Optimal use of the firm's technological knowledge and experience (although a firm's technological edge can be fragile);

Optimization of the company's financial results, when the formation of the assortment is based on the expected profitability and profit volume;

Winning new customers by expanding the scope of the existing production program.

The assortment strategy can be built in the following areas:

Narrow product specializationdetermined by the work of the company in a narrow segment of the market and is associated with the limitation of the scope of sales of products for various reasons

Commodity differentiation,or individualization, is associated with the allocation by the firm of its goods and services as special, different from the goods and services of competitors, providing for them separate niches of demand.

Commodity diversificationimplies a significant expansion of the scope of the firm and the implementation of the production of a large number of, as a rule, unrelated goods and services. Such a policy provides significant stability and stability of the firm, as it serves as a guarantor against the risks of declining demand and crisis phenomena in the production of one product or one industry.

Commodity vertical integrationpursues the goal of expanding the company's activities not horizontally, as with diversification and horizontal differentiation, but vertically, when the company develops (or takes over) and controls production or services along one technological chain, for example, raw products, basic materials, semi-finished products, parts, etc. nodes, as well as marketing functions for one product or a small product group.