Four levels of product in marketing. The concept of product in marketing

At 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 a product must meet consumer needs 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 anything that can satisfy a want 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 benefits the consumer will receive by purchasing the product;
2. actual product- what the product will look like, what are its main characteristics, packaging, name, quality;
3. reinforced goods- product advantages based on the two previous levels. The additional value of a product for which the consumer will purchase it.

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

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

Real product

At the level of real performance the product takes on physical shape.

Kotler highlights 5 main characteristics that a product must have at this level:

Quality
properties
external design
brand
package

Any product you purchase has a set of characteristics, even a service. When you contact a hairdresser, you receive a package - service, appearance master, brand - the name of the salon and its reputation in the city, external 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 its display brightness and color saturation.

By highlighting and trying to convey to the end consumer the main advantages of a product at the level of actual performance, we are not yet talking about competition. These are still only distinctive features that allow us to differentiate products in a variety of offers. Real competition starts at the reinforced product level.

It is at this level that manufacturers offer Additional services, which transform the material consumption of goods into an emotionally rich action. For example, when purchasing 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 to our home, or receive detailed instructions to troubleshoot problems without leaving your computer. But over time, such reinforcements become commonplace, and truly progressive companies are looking for more and more new ways to provide the consumer with new reinforcements.

In fact, when purchasing almost any product (including even everyday goods), the consumer is acquiring 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 needs and surprises with reinforcements. A product for a consumer is a complex set of benefits that are currently the highest priority for him.

Remember! A product must pass three levels of evaluation before you begin production.

TOPIC 4. PRODUCT PLANNING IN MARKETING.. 1

4.1. Understanding the product in marketing. Product classifications. 2

Three levels of product understanding in marketing. 2

Product classification. 2

4.2. Assortment policy of companies.. 4

Main product range options. 5

Policy directions in the formation of product range. 7

4.3. Trademarks. Branding. 8

4.3.1. Trademarks.. 8

Main types of trademark designations. 8

Functions of trademarks and marks. 10

Main types of brand names.. 10

Strategies for distributing and reproducing brand names... 11

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

4.3.2. Branding. 13

Components of the brand concept. 14

History of branding. 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 when creating packaging.. 17

4.5. Product positioning on the market. 18

Positioning aids. 18

Options for product positioning on the market. 20

4.6. Product competitiveness. Factors that determine it. 21

The concept of competitiveness.. 21

Parameters of competitiveness.. 22

4.7. Organization of product management in the company. 26

4.8. Product life cycle. 28

Types of life cycles. 29

Main stages of traditional life cycle. 30

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

Novelty in terms of the level of significance of innovations.. 36

Classification of innovations from the point of view of novelty. 37

Reasons for failure of new products... 37

4.10. New product planning process. 37

Sources.. 39

Understanding the product in marketing. Product classifications

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

Product is anything that can satisfy a need or need and is offered to the market for the purpose of attracting attention, acquisition, use or consumption. These are physical objects, services (transport, legal, medical, marketing), information, ideas.

This list does not exhaust the range of products. What constitutes a product in marketing is quite an interesting topic for a report at a seminar class.

In marketing, it is recommended to consider a product at three levels, each of which carries a certain load and reveals some 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 purpose of a vacuum cleaner is to quickly remove dust; a car is to move a person or load. Depending on how accurately this idea matches the needs of the potential client, the overall, strategic success of the product in the market is determined. If this core is initially defined incorrectly, then under no circumstances, even with the most talented and competent marketing, will the product be in demand.

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

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 product is accepted more favorably and ensures its operation more efficiently. This is the third level of understanding the product - reinforced goods (3). This includes a range of services that provide greater demand for the product and ensure more efficient use or operation of it. These are, for example, after-sales services, terms of delivery and credit (for example, modern market real estate 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 in nature. Also, for each type of product there may also be specific services, which are determined by the characteristics of this product. For example, transport services as a type of service have their own services that are included in the category of reinforcement: for example, services that provide easier client access to the transport service.

Product classification

The parameters of marketing services and marketing support depend on the place of the product in this classification. This location determines what elements the marketing collateral will consist of. Let us designate the two largest groups within the classification:

· goods as physical objects

· services.

The conditions for their marketing support differ significantly, this is determined, first of all, properties (characteristics) of services , distinguishing them from goods in material form.

The first characteristic of the service is immateriality . This feature greatly influences service marketing . Thus, services are difficult to advertise because to do this they must first be visualized. A product as a physical object can be demonstrated, shown in use, and the good mood of the people who consume it associated with it. It is difficult to show the service itself, especially services whose consumption process is hidden, for example, a banking service. In television commercials where bank services are advertised, most often, attention is focused rather on the positive emotions of others, and the service itself is not shown anywhere. This is difficult to do, and in this case it is ineffective to visualize it.

The process of developing a service is also difficult, and this is due to its intangibility, as well as the fact that services cannot be stored (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 enterprise producing furniture was unable to sell the goods produced this week, he can do it next week. The furniture remains in the warehouse. But if the hotel owner was unable to rent out rooms during the week, then this income is lost forever. Accordingly, when planning services, there is greater responsibility required than when planning goods, and there is greater risk inherent in marketing services compared to marketing goods (third characteristic).

The last characteristic is inconsistent quality of services , compared to the quality of the product. If you purchase a VCR from a series produced by SONY, then with a fairly high degree of confidence you can say that the properties and qualities of this product will correspond to the rest of the units within the series. If any property or quality is missing, the 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 with the temperament of the student, on the mood of both the teacher and the student, etc. The above conditions influence the differences in the marketing of services and goods.

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

Products are divided into two subgroups:

· goods consumer use (household appliances, clothing);

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

Services are also divided into two subgroups:

· consumer services;

· services industrial purposes .

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

· consumer services related to the rental of goods (rental),

· services with consumer-owned goods (repairs),

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

As for industrial services, there are a lot of different classes and groups, so let’s outline the main ones.

To category production relate:

· operation and repair services,

· business consulting services,

· financial services (translation Money, account servicing, purchase and sale valuable papers),

· marketing services,

· information services (delivery of information, content 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 marketing support for goods or services, it makes sense to classify goods based on shopping habits :

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

· goods pre-selection , i.e. those that the consumer, in the process of selection and purchase, usually compares with each other according to many indicators: quality, design, price, etc. (cars, household appliances, jewelry).

· goods special demand – goods with unique characteristics, for example, branded goods that fall into the category of particularly fashionable goods, for the purchase of which buyers are willing to spend additional effort and an immeasurable amount of time. Very few products fall into this category, but once a product falls into it, it takes on very special characteristics in the minds of buyers that are not determined by its quality and design in the aggregate. Marketing support for such products has a special composition of activities.

· goods passive demand . These are products that the consumer does not know about, or knows about, but does not yet think about purchasing until the need arises. Thus, freight transportation services, from the point of view of an individual client, fall into this category; funeral services.

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

There are three levels of product: product by design, product by actual execution, and product by reinforcement.

1. The product by design is the core of the concept of the 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 packaged service to solve some problem. For example, buyers do not purchase drills of a certain diameter, but holes of the same diameter. Therefore, the task of a market worker is to identify the needs hidden behind any product and sell not the properties of this product, but the benefits from it.

2. The developer has to turn the product as conceived into a product in real execution. Lipstick, computers, etc. - all these are real goods. A real product may have five characteristics: quality, properties, external design, brand name and packaging.

3. And finally, the developer can provide for the provision of additional services and benefits (supply and credit, installation, after-sales service, guarantees) that constitute a reinforced product. If we consider a computer, then the product is reinforced by instructions, work programs, delivery services, programming, repair, warranty, etc. The idea of ​​product reinforcement forces the market worker to take a closer look at the client’s existing consumption system as a whole.

Classification of goods in marketing conditions.

Product groups:

1. Durable goods - withstand repeated use;
2. Non-durable goods – consumed in one or several cycles of use;
3. Services.

Classification of consumer goods:

1. Everyday goods: purchased without hesitation or comparison;

Basic consumer goods – toothpaste, ketchup;

Impulsive purchase items – magazine, chewing gum;

Emergency goods - umbrellas, shovels.

2. Pre-selection products: options are compared before purchasing:

Similar – same quality, different prices;

Dissimilar – must have a wide range.

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

4. Goods of passive demand: people don’t think about buying them (life insurance, encyclopedias). Requires personal selling.

Consumer properties of the product:

1. Properties of social purpose: the demand for goods by consumers depends on solvency and social norms of consumption. In addition, it depends on the season, style and fashion.
2. Functional properties: ability to satisfy customer needs. Divided into three groups:

Indicators of perfection of the main function - the beneficial effect of consumption (qualitative and quantitative indicators);

Indicators of versatility - the breadth of the range of application of the product;

Indicators of performance of auxiliary functions - characteristics of the product during transportation, storage, maintenance and repair.

1. Reliability of a product in consumption: the ability of a product to fully perform its functions during its service life. Groups of reliability indicators:

Reliability – the ability to continuously maintain operability during the service life or operating time;

Durability indicators – service life and resource;

Maintainability is the adaptability of a product to detect and eliminate possible damage and failures. It largely depends on the unification of the components used.

Storability – the ability to maintain functionality after storage or transportation (in days, etc.). Important for determining the warranty period.

1. Ergonomic properties: convenience and comfort of using the product at all stages in the “person – product – environment” system.

Groups of indicators of ergonomic properties:

Hygienic – the effect of a product on a person during operation: illumination, dust, temperature, humidity, hygroscopicity, noise, vibration, the ability to keep the product clean.

Anthropometric – the correspondence of the product and its elements to the shape and weight of the human body: size, weight.

Physiological and psychophysical - compliance of the product with the strength, speed, energy, visual, gustatory, sound, gustatory and olfactory capabilities of a person.

Psychological – the correspondence of the product to the existing and emerging skills of a person, i.e. his perception, thinking and memory.

1. Aesthetic properties: the ability of a product to express its sociocultural significance, the degree of usefulness and perfection in human-perceived characteristics, such as the correspondence of the form to the content, style, fashion, environment, proportionality, etc.
2. Environmental properties: the level of harmful or beneficial effects of a product on environment during storage, transportation and consumption.
3. Safety of consumption: characterizes the safety of using the product. Types of safety: electrical, chemical, mechanical, fire, biological, vehicles.

Economic properties: consumption of material to create goods and fuel and energy in the process of consumption.

3. Task

Explain the possible discrepancy between the subjective categories of quality and the subjective categories of price. In what cases is the consumer: dissatisfied with his purchase; will become a fan of this company's products?

In the wording of the question, it was correctly noted that categories such as quality and price (more precisely, willingness to pay the price) are subjective. Also subjective are the feeling of dissatisfaction with the purchase and the feeling of commitment to the products of a given company. Let us describe these categories and the relationships between them in more detail.

The main defining characteristic of a product (service), as is known, is price 1 . Acting as a buyer of various goods (services), we are accustomed to believe that high consumer properties mean a high price of the product (service) - this is the core of the subjective relationship between the PRICE/QUALITY categories. In this ratio, it is common for the consumer to strive to obtain maximum quality for a limited, minimum price. Realizing that this is not always possible, the consumer strives for some optimal PRICE/QUALITY ratio, and not to the detriment of the latter.

So, the discrepancy between subjective categories of quality and subjective categories of price depends on 2:

1. degree of readiness to perceive the product;
2. relationship to the product.

Let's explain this.

1) The discrepancy between the subjective categories of price and quality is determined by the buyer’s degree of readiness to perceive the product. At any given time, people are in varying degrees of readiness to purchase a product. Some are not aware at all
product - in this case it makes no sense to talk about the discrepancy between the subjective categories of quality and price. Other buyers may be informed about the product (service), but not enough to adequately assess the price/quality ratio; This type of buyer is inclined to believe that any price for a product is expensive, because the buyer strives to get maximum quality for the minimum price, but does not know the merits of the product.

The third type of buyers is aware of the properties of the product, but has no interest (need) in the product; For this type of buyer, the main discrepancy between the subjective categories of quality and price is similar to the previous type of buyer.

The fourth type of buyers are those interested in the product; this type of buyer has an adequate idea of ​​the quality of the product, but a discrepancy between the quality and price categories may arise due to the fact that at the time of purchase the buyer may simply not have a sufficient amount of money. The fifth type of buyers are those who intend to buy a product (service) for the offered price; as a rule, these buyers no longer have a discrepancy between the subjective categories of price and quality, otherwise these buyers would belong to either the third or fourth types.

2) The discrepancy between the subjective categories of price and quality is determined by the attitude of buyers towards the product. The market audience may be enthusiastic, positive, indifferent, negative or hostile towards the product or service. This attitude is not always caused precisely by the quality of the product. This means that in the sense of the discrepancy between the subjective categories of price and quality, the attitude towards the product makes the following adjustments: buyers with an enthusiastic and positive attitude towards the product are willing to pay more money for less quality; whereas buyers with an indifferent, negative or hostile attitude towards a product are either not willing to pay money at all for any quality of the product, or are willing to pay less money for a very high-quality product 3 .

Now let's say a few words about dissatisfaction with the purchase and commitment to the products of this company.

It is known that final satisfaction with a purchase consists of 12-17 components. The main reason for dissatisfaction with the purchase is failure to obtain the expected ratio of subjective categories of price and quality.

It is important to remember that it is not only the low quality of a product or service that can lead to dissatisfied consumers. The most extreme case of dissatisfaction with a purchase due to low quality is defective goods.

Other common reasons for customer dissatisfaction are that the company does not work with its customers, i.e. incorrect positioning of the product on the market, incorrect choice of target audience.

Research shows that there is a big difference between completely satisfied consumers and simply satisfied ones. Fully satisfied customers are the key foundation for long-term financial success.

Now about the cases when the buyer becomes an adherent of the products of this company. The main reason for customer commitment is that the purchase matches the expected price-quality ratio 4 . Further, it should be noted that commitment is a multifaceted concept. Consumers can be loyal to the products themselves, as well as to brands, stores, and other independent entities. According to the degree of commitment, buyers can be divided into four groups: unconditional adherents, tolerant and fickle adherents, and “wanderers.”

Unconditional followers are consumers who always
buy goods of the same brand.

Tolerant loyalists are consumers who are loyal to two or three brands.

Frequent adopters are consumers who transfer their preferences from one product brand to another: the pattern of their purchasing behavior shows that consumers gradually shift their preferences from one brand to another.

“Wanderers” are consumers who are not loyal to any branded product. The non-committed consumer either buys any brand currently available or wants to purchase something different from the existing range.

List of sources used

1. Basovsky L.E. Marketing. – M.: Infra-M, 2001.
2. Belyaevsky I.K. Marketing research: information, analysis, forecast. - M.: Finance and Statistics, 2007..
3. Akulich I.L. Marketing: Textbook. - Mn.: Higher School, 2002.
4. Dubrovin I.A. Marketing research. - M.: Publishing house Dashkov and K, 2007.
5. Marketing. A textbook for universities, edited by A.N. Romanova. – M.: Banks and exchanges, 2002.
6. Korotkov A.V. Marketing research. - M.: Unity, 2005.
7. Maslova T.D., Bozhuk S.G., Kovalik L.N. Marketing. - St. Petersburg: Peter, 2002.
8. Pokhabov V.I. Fundamentals of Marketing: Textbook - Mn.: Higher School. 2001.
9. Barysheva A.V. Facing the client. // Marketing in Russia and abroad. - 2007. No. 3.
10. Sergeeva S.E. Effective marketing is the key to a company’s success // Marketing in Russia and abroad. - 2000. - No. 2
11. Bronnikova T.S., Chernyavsky A.G. Marketing. Tutorial.
12. Golubkov E.P. Marketing research theory: theory, practice, methodology. – M.: Finpress, 2000.

1 Marketing. A textbook for universities, edited by A.N. Romanova. – M.: Banks and exchanges, 2002. – Pp. 24.

2 Basovsky L.E. Marketing. – M.: Infra-M, 2001. – Pp. 164.

3 See Golubkov E.P. Marketing research theory: theory, practice, methodology. – M.: Finpress, 2000..

4 Golubkov E.P. Marketing research theory: theory, practice, methodology. – M.: Finpress, 2000..

Product policy requires making decisions that are consistent with each other regarding individual product units and the product range. It is convenient to consider each product unit offered to consumers from the point of view of three levels (Fig. 2).

Figure 2 - Product levels

The first level is the concept of the product - the core of the concept of the product as a whole. At this level, we are still talking not so much about the actual item or service, but about the needs that the future product should satisfy. For example, cosmetics are conceived as a means of making a person look 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 packaged service to solve some problem. For example, buyers do not purchase drills of a certain diameter, but holes of the same diameter. Therefore, the task of a market worker is to identify the needs hidden behind any product and sell not the properties of this product, but the benefits from it.

The second level is an item or service in actual execution. The developer has to turn the product according to plan into actual product. At this level, the product must have the following characteristics: a set of necessary properties, quality level, specific design, brand name and specific packaging. For example, lipstick, drills are real goods. A real product may have five characteristics: quality, properties, external design, brand name and packaging.

The last - third level - goods with reinforcement. This is the product itself with additional services and benefits attached to it, which together constitute reinforcement. This could include personal attention to customers, home delivery, a money-back guarantee, etc. If we consider a computer, then the product is reinforced by instructions, work programs, services for delivery, programming, repair, warranty, etc. The idea of ​​product reinforcement forces the market worker to take a closer look at the client’s existing consumption system as a whole, at how the buyer of the product takes a comprehensive approach to the problem that he is trying to solve through the use of the product. With this approach, it is possible to identify and apply the most effective ways from a competitive point of view to reinforce your product offering.

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

When making product decisions, an enterprise must clearly understand the economic consequences of such decisions (costs and benefits). For example, when making decisions on warranties, it is necessary to provide for the costs of providing warranty obligations (warranty workshops, spare parts, personnel, etc.). When selling goods in installments (lending to the buyer), one should keep in mind the increase in the working capital of the enterprise. When making decisions on developing a trademark policy for an enterprise, it is necessary to decide whether it is necessary to resort to the use of trademarks at all, since this will lead to additional costs (patent research, brand development, patenting). When making decisions on delivering goods to buyers on FOB, Franco, CIF, “free” terms, you must clearly understand who pays for 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.

Specialists must take into account such a concept as product levels in order to make it as useful and effective as possible for the consumer. There are two main concepts that describe product levels.

Concept of 3 product levels

Philip Kotler in his works described the concept of three levels of goods. This concept is based on dividing the product into levels in the following sequence:

First level– this is essentially the design of the product, its “heart”. At this level, we are not yet talking about the product itself in its material form, but rather about the needs and concerns of the client that this product can solve. For example, the consumer does not purchase the car itself, but the ability to move around the city in comfort. It is important that the seller focuses his efforts not on the properties of the product, but sells exactly the solution to the buyer’s problem.

Second level– this is a product in real execution. At this stage, the product, as a rule, has a number of essential characteristics: properties, quality, appearance, brand or brand, packaging.

Third level is a reinforced product. That is, it is not only the product itself and the benefits it brings, but also the additional benefits and services that come with it: for example, a repair guarantee, a home delivery service, etc.

Let's look at the three-level concept using an ordinary screwdriver as an example. At the first level we see it as a way to obtain tightened screws. At the second level there will be the product itself: a tool with a handle and a drill, which will reliably turn screws for a certain time, set by the manufacturer as the service life. The third level is everything that will make this product stand out from many others: the ability to send it in for repairs during the warranty period, a set of drills for different purposes, possible combination in a screwdriver as an additional drill function, an additional power supply for operation without recharging and etc.

5 product levels concept

Another classification of product levels, five-level, is a more expanded version of the previously discussed concept.

As with the previous concept, it all starts with key value level that the consumer receives, that is, essentially from the result that will be acquired with the purchase of this product.

Then comes basic product, filled with those mandatory characteristics without which it is impossible to imagine the existence of this product. This includes brand, packaging, quality level.

Next level - expected product. These are the properties that the buyer expects to find in a given product. This is the so-called “ideal product”, which contains all the required functions, as well as the buyer’s expectations. Such expectations are based on the experience of purchasing competing products, so the more developed the market and the competition in it, the higher the expected level of the product.

Fourth level – reinforced goods, or augmented level. This is a set of properties and characteristics that make this product unique and allow it to stand out from other competitors. All additional services surrounding the product constitute a complex product, which, if the company has the appropriate resources, can one day become a brand, because this gives the product more competitiveness.

Last level – potential product. This includes all potential features that could improve the product in the future. This level is necessary in order to formulate a product development strategy, develop and expand markets for its use. The presence of this level helps the product to regain its lost position in the market in case of a difficult market situation or to quickly adjust the product to the changing requirements and expectations of the market.