What is a product? The three levels
A product is anything offered to satisfy a want or need: a good (soap), a service (a haircut) or even an idea.
- Core benefit: the basic need it solves. A drill buyer wants a hole, not a drill.
- Actual product: the real thing with features, design, quality level, brand name and packaging.
- Augmented product: extras that add value: warranty, free delivery, installation, credit, after-sales service.
Many firms compete mostly at the augmented level, because core benefits are often the same.
Branding
Branding means giving a product a name, sign, symbol or design so buyers can tell it apart from others.
- Brand name: the part you can speak (for example a soft-drink name).
- Brand mark: the symbol or logo you recognise but do not speak.
- Trademark: a brand that is legally registered, so no one else can copy it.
Why brand?
For the seller: it builds loyalty, allows a slightly higher price, and makes advertising easier. For the buyer: it is easy to find, and shows steady quality.
A good brand name is
short, easy to say and remember, suggests the benefit, and can be registered.
Labelling
A label is the tag, sticker or printed part of a package that gives information.
Functions: it describes the product and its use, identifies the brand, helps grade it (for example by quality), promotes it with attractive design, and gives information required by law.
Laws in many countries ask labels to show: product name, maker's name and address, net quantity (in grams, kilograms or litres), price, date of making and expiry, and ingredients. Food in India also shows a green dot (vegetarian) or brown dot (non-vegetarian).
Packaging: levels and functions
Packaging means designing and making the container or wrapper for a product.
Three levels
- Primary: touches the product (toothpaste tube).
- Secondary: extra layer, thrown away when used (the cardboard box of the tube).
- Transportation: for storage and shipping (a carton of 100 boxes).
Functions
Protects the product, makes it easy to identify, makes it convenient to carry and use, and promotes it on the shelf (the "silent salesman"). Good packaging today should also be eco-friendly: less plastic, recyclable material.
Product life cycle (PLC)
| Stage | Sales | Profit | Strategy |
|---|---|---|---|
| Introduction | Low, slow growth | Loss or very low | Build awareness, free samples, heavy promotion |
| Growth | Rise fast | Rising | Improve quality, enter new markets, build brand loyalty |
| Maturity | Peak, then flat | Highest, then falling | Cut price, new versions, new uses, strong ads vs rivals |
| Decline | Fall | Falling | Cut costs, drop the product, or relaunch it |
Try it
Use the time slider in step 6. Then pick three products at home (for example a film camera, a smartphone, a pen) and say which PLC stage each is in today.
Key formulas and definitions
- Core benefit = the basic need the product meets
- Actual product = features + design + quality + brand + packaging
- Augmented product = actual product + extra services (warranty, delivery, service)
- Brand = name, sign or symbol that sets a product apart; trademark = a legally registered brand
- Label = information on the package; packaging = the container or wrapper
- PLC = Introduction โ Growth โ Maturity โ Decline
Worked examples
1. A washing machine comes with free installation and a 2-year warranty. Which product level are these?
The augmented product: extra services added to the actual machine.
2. A tube of toothpaste is in a cardboard box; 144 boxes are in a big carton. Name each level of packaging.
Tube = primary; cardboard box = secondary; big carton = transportation packaging.
3. Sales of a new electric scooter are rising fast and new rivals are entering. Which PLC stage? What should the firm do?
Growth stage. Improve features, expand to new cities and build brand loyalty before rivals catch up.
4. Which of these must a food label usually show by law: (a) expiry date, (b) the owner's photo, (c) net quantity?
(a) and (c). The owner's photo is not required.
Common mistakes
- Thinking the core benefit is the physical thing. It is the need met (connection, not the phone).
- Mixing up brand and trademark: a trademark is a brand that is legally registered.
- Mixing up label and packaging: the label informs; the package contains and protects.
- Thinking profit is highest when sales start. Profit is usually highest in maturity.