Product Decisions

Components of a Product

On the surface it seems a product is simply a marketing offering, whether tangible or intangible, that someone wants to purchase and consume.  In which case one might believe product decisions are focused exclusively on designing and building the consumable elements of goods, services or ideas.  For instance, one might think the key product decision for a manufacturer of floor cleaners is to focus on creating a formula that cleans more effectively.  In actuality, while decisions related to the consumable parts of the product are extremely important, the Total Product consists of more than what is consumed.  The total product offering and the decisions facing the marketer can be broken down into three key parts:

1. Core Benefits
2. Actual Product
3. Augmented Product

1. Core Benefits

Consider what we have talked about many times in this tutorial; people make buying decisions that satisfy their needs.  While many needs are addressed by the consumption of a product or service, some needs are not.  For instance, customers may need to be perceived highly by other members of their group or need a product that is easy to use or need a risk-free purchase.  In each of these cases, and many more, the core product itself is the benefit the customer receives from using the product.  In some cases these core benefits are offered by the product itself (e.g., floor cleaner) while in other cases the benefit is offered by other aspects of the product (e.g., the can containing the floor cleaner that makes it easier to spread the product).  Consequently, at the very heart of all product decisions is determining the key or core benefits a product will provide.  From this decision, the rest of the product offering can be developed.

2. Actual Product

The core benefits are offered through the components that make up the actual product the customer purchases.  For instance, when a consumer returns home from shopping at the grocery store and takes a purchased item out of her shopping bag, the actual product is the item she holds in her hand.  Within the actual product is the consumable product, which can be viewed as the main good, service or idea the customer is buying.  For instance, while toothpaste may come in a package that makes dispensing it easy, the Consumable Product is the paste that is placed on a toothbrush.  But marketers must understand that while the consumable product is, in most cases, the most critical of all product decisions, the actual product includes many separate product decisions including product features, branding, packaging, labeling, and more.  Full coverage of several of these important areas is provided later in this tutorial.

3. Augmented Product

Marketers often surround their actual products with goods and services that provide additional value to the customer’s purchase.  While these factors may not be key reasons leading customers to purchase (i.e., not core benefits), for some the inclusion of these items strengthens the purchase decision while for others failure to include these may cause the customer not to buy.  Items considered part of the augmented product include:

• Guarantee – This provides a level of assurance that the product will perform up to expectations and if not the company marketing the product will support the customer’s decision to replace, have it repaired or return for a refund.
• Warranty – This offers customers a level of protection that often extends past the guarantee period to cover repair or replacement of certain product components.
• Customer Service – This consists of additional services that support the customer’s needs including offering training and assistance via telephone or online.
• Complementary Products – The value of some product purchases can be enhanced with add-on products, such as items that make the main product easier to use (e.g., laptop carrybag), enhance styling (e.g., cellphone face plates) or extend functionality (e.g., portal keyboard for PDAs).
• Accessibility – How customers obtain the product can affect its perceived value depending on such considerations as how easy it is to obtain (e.g., stocked at nearby store, delivered directly to office), the speed at which it can be obtained, and the likelihood it will be available when needed.