This article throws light upon the top five elements of product strategy. The product strategy elements are:- 1. Branding 2. Packaging 3. Labelling 4. Product Warranty 5. Service Facilities.
Elements of an Effective and Successful Product Strategy: Branding, Packaging, Labelling, Product Warranty and Service Facilities
Product Strategy Element # 1. Branding:
Brand Management holds the key in the modern markets. In a world where products are multiplying and becoming more and more similar, management of brands is critical for survival of the products as well as the companies making them.
The long-term brand management starts with the brand concept and name selection. Brand concept refers to the meaning of the brand, i.e., it defines the brand market boundaries. Brand name is like naming a new child. It basically serves to identify the offering. It also helps in establishing the concept. (COLGATE has never shown any compromise to its original concept — Colgate is one word for dental care).
The word “Brand” has its origin in the Norwegian work “Brand”, which means to burn. In ancient times, farmers used to put burn marks as identification on livestock to distinguish their possessions.
If livestock were to be replaced by products in today’s world, marketers are resorting to branding to distinguish their products from that of the competitors. Additionally, it also means an inherent assurance to the customers for quality.
Many consumer products, besides their basic features, need attractive packaging and, a “brand name.” A brand is a symbol or a mark that helps a customer in instant recall, differentiating it thereby from the competing products of a similar nature.
According to the American Marketing Association, “A brand name is a part of a brand consisting of a word, letter and group of words or letters to identify the goods or services of a seller or a group of sellers and to differentiate them from those of the competitors.”
David Ogilvy defined a brand as ‘the consumer’s idea of a product.’ A brand distinguishes a product or service from similar offerings on the basis of unique features perceived by the consumers. The best examples of brand names are- LUX, LIRIL, REXON A, EVITA, PROTEX, HAMAM and LE SANSI in case of toilet soaps, SURF, ARIEL and NIRMA in case of detergents and NIVEA, FEM, OIL OF OLEY, CHARMIS and VASELINE in case of vanishing creams.
A brand mark is a symbol or a design used for the purpose of identification. For example, Air India’s MAHARAJA.
The legal version of a brand mark is the ‘trade mark’, e.g., Ashok Masala and Good Health Atta.
The sole purpose of branding is to distinguish your branded product from those of competitors. The term ‘brand’ is broadly applied to all identifying marks such as trade names, trademarks, trade symbols, picture, design of the package, distinctive colouring or lettering with or without some attractive slogan.
The owner of a registered brand personally stands behind the branded product and offers personal guarantee for maintaining the quality and standards of the product as per advertisement. The pronounceable part of the brand is the brand name. Example- Pepsi, Lifebuoy are brand names. The part of the brand that appears as symbol, design or distinctive lettering is brand mark or logo. It is recognisable by sight but is not normally pronounceable.
A brand is more than just a product. It is a contract between the customer and the creator. It embodies a meaning, gives direction, and defines unique identity. Brands are not merely symbols on a product or a graphic and cosmetic exercise. A brand is a signature on a constantly renewed, creative process. A product is what the company makes.
A brand is what a customer buys-hopes/expectations/service. The word ‘brand’ is a comprehensive term. To brand is to name or mark indelibly as proof of ownership. It means a sign or symbol of quality. It is the best means of advertising and positioning (unique selling point) in the market. Branding is the best means to capture and retain the consumer demand in a competitive market.
Branding is the practice of giving a specified name to a product or group of products from one seller. The specified name creates individuality in the product, hence, it can be easily distinguished or recognised in the market from the rival products.
Trade mark is a legal term. It is a brand duly registered under the Trade Names and Trade Marks Act. It is a brand enjoying legal protection. A registered brand is the exclusive property of the seller. Others cannot use it and legal action can be taken if they adopt it. The letter “R” in a circle on each package will indicate that the brand is duly registered® and cannot be used by any other producer.
Product Strategy Element # 2. Packaging:
Once the decision is taken on the brand, we have to consider the design and the makeup of the package and the labelling of the package. In reality it is not the product which is displayed and sold but it is the brand together with the package and the label, which are sold or which enable to sell the product. In a sense, your brand, package and label represent the product personality.
Brandings packaging, labelling, the product warranty, and service after sale are the product related strategies and they are responsible to make the marketing programme effective. They also are the best means of promotion. They project the product in the most favourable way. Package is critically important to the buyer’s recognition of the product. Aesthetically pleasing package can secure higher sales and profit.
Packaging may be defined as formulating a design of the package and producing an appropriate and attractive container or wrapper for a product. The container itself can act a forceful though silent and powerful salesman at the point of purchase or an effective medium of advertisement encouraging impulse buying.
Many a time, package design itself can act as a registered brand. Packing is necessary to prevent flowing out of such liquids as milk, drinks, etc. It is essential to maintain freshness and quality, e.g., ghee, sauce, etc. It can prevent the danger of adulteration, e.g., butter, cheese, spices, edible oil, etc.
However, packaging is much more than mere packing. Packaging is a marketing necessity. The public does not want just the product. They want explanation, assurance, encouragement, confidence, and praise, i.e., pat-on-the-back, all integrated or combined with a pleasant and eye-catching get-up appearance on the top to gain action, i.e., close the sale.
Thus, a good package ensures ultimate success of the product as a commercial venture. Under keen competition, the consumer needs an effective means to recognise a difference and establish preference that will ensure repeated repurchases. Packaging does this job in a competitive market.
That is why crores of rupees are spent on packaging and branding. Such huge expenditure is made for the simple reason that packaging and branding alone can sell your products. Packaging completes the sales cycle triggered by advertising, and secures a meaningful market share.
In the present age of consumer-oriented marketing approach (i.e., Buyers’ Market), packaging has gained unique importance. The utility reasons for packaging viz., protection, identification and convenience are themselves exploited in selling and some features of the package may serve as a sales appeal, e.g., reusable jar.
Message on the label is a constant reminder to the user of the product. Packaging decorates and beautifies the product so as to lead the consumer impulsive buying. In modern self-service stores, with mass display, well-designed packages attract attention, and through silent sales talk, increase the sales volume.
Packaging itself is a device of sales promotion. A customer will pay more just to get the special package — even though the increase in price exceeds the additional cost of the package, e.g., Supreme Lux Soap sold in an attractive re-usable box.
From the marketer’s point of view- (1) Packaging is a sales tool, (2) It identifies the maker as well as the product and carries the brand name, (3) The packaging label informs the buyer about inner contents and how to use them and (4) It is the biggest advertising and promotion tool.
Attributes of a Good Package:
A package should- (1) protect the contents from breakage or spoilage (2) be easy to open, dispense from, and close, (3) be safe to use, (4) keep the product from deterioting, (5) be of proper size and shape, (6) be reusable, able to be recycled or be biodegradable, (7) be economical, (8) be available in the sizes appropriate to the market segments served.
These are the attributes of a package as a part of the product. However, package also serves a medium of communication. In this capacity, the good package will- (1) be attractive, (2) project a favourable image of the product, (3) play the role of silent salesman, (4) be readily identifiable in a shopping situation, (5) act as a unique selling proposition, (6) have a clearly readable description of the contents, (7) Offer information on assembly, preparation and use, (8) communicate the benefits of the product to the targeted market segment, and not be deceptive or misleading in size, contents, etc.
Modern package acts as a multi-purpose arrangement. It must fulfil utility functions such as protection, identification and convenience, when it serves as a container or wrapper of a product. In addition, it is also called upon to play the role of a colourful salesman. Self- service and self-selection have developed and are gaining importance in retail trade. Customers are always in a hurry.
The package must have informative labelling. The headlines, illustrations, guidelines and selling points on the package must be clear and prominent so that the matter is readable by every shopper at a glance. Pictures should help to tell the story faster and more effectively. Visibility of the product in the package helps to sell the product better. Hence, glass, cellophane and plastic packages have become very popular.
Truth-in-packaging is absolutely necessary while designing the package. Package label should not misrepresent the reaiities.to make a sale. Information given on the label should be attractive but not bogus or imaginary. Tell the truth more attractively. Then only we shall have fair trade practices regarding packaging and labelling. The deceptions in packaging must be eliminated either through self-regulation or, if necessary, through legislation. Consumerism insists on truth in packaging.
With product competition getting to be increasingly difficult in the market-place, marketers are now turning to innovative packaging to establish the distinctive edge. There is now a thin dividing line between value-added package and promotions for a marketer. There has been a spate of packaging innovations that go beyond mere shelf visibility (for impulse purchase) and excitement.
Marketers are coordinating innovative packaging with brand equity and brand loyalty. Packaging innovations based on consumer needs can help in retaining loyalty to the brand. The Pouch innovation of a neat plastic bag with a zipper lock that could be carried in the pocket, containing five strips of Band-Aid of Johnson is a fine example of a shift in packaging thinking to satisfy a consumer need.
Modern package provides more value addition to products and more benefits during usage. Harpic liquid toilet cleaner with its directing nozzle. Catch 22, salt and pepper in self-contained dispensers saving the consumer the bother of transferring the products into shakers, Bournvita’s 200 gm. reusable mug-cum jar pack, Cadbury’s drinking chocolate in a shaker pack, its cocoa in a special measuring cup are examples of innovative packaging capable of becoming a very effective tool of sales promotion gaining competitive advantage for the brand.
In many cases, such packaging can turn out to be a promotional campaign in itself to gain quick short-term market share, to boost sales and retain brand loyalty. The Hindustan Lever’s Le Sancy soap with its unique bean shape was sold in transparent plastic soap box moulded to the same colour, shape and appearance (package identical with the soap).
Within a few months of launching this package, the marketer won 20 per cent market share in the most premium soap markets. It seems we are coming to a time when packaging itself will be treated as a product worked upon with the same care that goes into developing a consumer product.
The various types of plastics have not only helped conserve or utilise the depleted natural resources but also revolutionised the concept of packaging. Plastics have proved to be much better substitutes to wood, cotton, metal, cardboard, paper, glass and so on, but not eco-friendly.
The new rigid PVC now manufactured by modern, computerised, and automatic process both in the normal and non-toxic grade with printability and metallising property is going to revolutionise the packaging systems for medical and food sectors and for consumer and industrial usage by thermoforming and twist-wrapping process.
In the Food Processing Industry the new plastic package offers strength, protection, presentation and consumer appeal. The recycling process of plastics right from collection of the garbage to segregation and conversion in prime form for reprocess and reuse has solved the problem of pollution.
In India, rag pickers contribute enormously to the estimated 40 per cent of plastic which is recycled. The ‘re-use’ culture is more prevalent in India, where plastic containers are re-used several times before they are discarded.
Significance of societal view of packaging is summarised below:
1. Pollution control is a burning issue in packaging particularly in Western countries. Broken bottles, crushed cartons, and bent cans litter the streets and choke municipal dumps. This has created the solid-waste problem in those countries. All packaging programmes must weigh environmental and ecological issues.
2. Resource scarcity is another problem. The same precious natural resources that are being wasted on non-returnable (disposable) containers, e.g., soft drink bottles and beer bottles, later create litter and pollution problems. Such a consumption pattern cannot be tolerated now.
3. Among the resources which are being wasted, energy sources are the most critical at present. Throw-away bottles use three times the energy of returnable bottles. The efficient, energy-saving, returnable bottles must be introduced.
4. Nutrition labelling, open-dating (how fresh is the product), unit pricing, and grade labelling are the latest demands of consumers on all food products.
1. Unless the package is transparent, the buyer cannot judge the contents by appearance. If quality information on the package label is absent, the buyer has to purchase almost blindly.
2. If the consumer wants a specific quantity, he may not have that amount when goods are sold in packages.
3. There is no feasible way to check weight and volume of the contents unless a buyer opens the package to ascertain the weight. Prepackaged shortages amount to about 20 per cent.
4. Package sizes and designs inflate the contents. ‘One Rupee off’ labels proclaim price reduction which may not be real.
5. Deceptive packages have several room-mates in trade practices. They are hidden declaration of contents, fine print, glorified illustrations and unexplainable fractions. Example- Sunlight soap – 128 gr. – Rs. 15.00 (2011) Consumers think that they are getting more when, in fact, they may be getting less due to the cunning package design.
6. Packages are same, contents are reduced and apparently same prices are charged. This method is popular in a period of rising prices.
7. Packages may create health hazards for consumers. Certain plastic food-packaging has been shown to cause cancer (vinyl chloride inhaled by humans). Packages stored in godowns are susceptible to infection (rodents and insects nesting in packages).
Image means a mental picture drawn by a fancy. A product image is the sum total of- (a) inner value of the product, (b) its ability to perform and give service and safety to user, (c) packaging, (d) branding, (e) labelling, (f) product warranty, and (g) product services. The product image also indicates the goodwill of the product and its producer.
Product Strategy Element # 3. Labelling:
Packaging, branding and labelling go together and constitute an integral part of product planning and development. Label is a part of a product. It gives verbal information about the product and the seller. The purpose of labelling, like the purpose of branding, is to give the consumer information about the product he is buying and what it will and will not do for him.
A label is also a part of a package or it may be attached directly to the product. There is a very close relationship between labelling and packaging as well as labelling and branding or grading.
Labelling is the act of attaching or tagging labels. Label is anything — may be a piece of paper, printed statement, imprinted metal, leather — which is either a part of a package or attached to it indicating contents, price names of product and produces and such useful information beneficial to the consumer. Example- labels on drugs and dangerous products contain factual information.
Labels are classified as- (a) brand, (b) grade, (c) descriptive, and (d) informative. Brand label mentions the brand name or mark. Grade label identifies the quality by a letter, number, or word, e.g., AAA, Fancy Grade, Grade No.1 and 2. Descriptive and informative labels are similar.
They give helpful information on the following-
(a) Brand name, (b) Name and address of producer, (c) Weight, measure, count,
(d) Ingredients by percentages where possible, (e) Directions for the proper use of the product, (f) Cautionary measures concerning the product and its use, (g) Special care of the product, if necessary, (h) Recipes on food products, (i) Nutritional guidelines, (j) Date of packing and date of expiry, (k) Retail price, and (I) Unit price for comparison.
Labelling, in general, is not a very reliable guide to quality or an assurance of uniformity. The printing of labels costs very little and the superlatives given on the label cost nothing. Hence, consumers should guard against deceptive labels.
21st century has been considered as the century of environmental awareness in all countries. Consumers would now prefer products which are environment-friendly. Eco-label on a product is awarded on the basis of the product’s environmental friendliness. Eco-label is at present voluntary.
The European Community has issued guidelines on all important environmental effects throughout the product life-cycle, from production to disposal to the final consumer. Eco-labels are only granted for a limited period. The green marketing may be world-wide phenomenon in the 21st century. Many countries may have legislation to control environmental damages, particularly solid-waste disposal.
Product Strategy Element # 4. Product Warranty:
Need For Product Warranty:
In modern life, we have numerous products with complicated, intricate and elaborate mechanism, such as radio, television, motor car, electrical appliances, etc. An average consumer does not know the ins and outs of such sophisticated products. He will be at a loss if he/she is compelled to take his/her own care while buying such products.
The law has now started to alter the famous maxim “Let the Buyer Beware” and give due recognition to its substitute “Let the Seller Beware.” In many countries the law takes into consideration the handicaps and disabilities encountered by average buyers while purchasing such highly mechanised or automated products.
Consumerism also aims to make the buyer aware of rival products through consumer testing and survey work. Informative labelling and informative advertisement will also educate consumers in making wise selection while purchasing the products. The Sale of Goods Act has given legal protection in the form of implied conditions and warranties.
Condition is a stipulation essential to the main purpose of the contract. If it is broken, the victimised party, i.e., the buyer will have a right to repudiate the contract.
Warranty is a stipulation collateral to the main purpose of the contract. If it is broken, the victimised party, i.e., the buyer can claim for damages but has no right to reject the contract.
A warranty is an obligation of the producer and seller to stand behind the product and assure the buyer that he will derive certain services and satisfactions from the product. The product warranty must be clear, unambiguous and meaningful. It has become an important selling point and a means of product differentiation in a competitive market. Warranties are also considered as promotional devices. Full disclosure of warranty information will ensure the consumer’s “right to know.”
1. A warranty is an assurance of the quality, service and performance. It is a written guarantee of the intrinsic value of a product. It points out the responsibility of the maker for repairs, service, and maintenance in the case of consumer durables. The producer should use the word ‘warranty’ instead of the word ‘guarantee’.
2. The warranty is the outcome of the rule of a law viz., ”let the buyer beware. ” Producers developed warranties to create buyers’ confidence and to provide redress to aggrieved customers. Buyers could rely on the statements made by the seller. For example, a manufacturer may warrant that his product is 100 per cent wool or that the colour of the cloth will not fade. Such a warranty may be supported by money-back guarantee.
3. The value of warranties to consumers depends upon the reliability of the warrantor and the person who has specific responsibility of making good on the warranty. This is true because in practice and in law, the consumer has little recourse. However, courts have started awarding damages for an injury simply if the product is shown to be defective or unfit for its intended use.
There are four guidelines as instruments for meeting social responsibilities of marketing as well as for assuring a continuous customer interest- (1) warranty integrity, (2) education of consumer in the use of the product, (3) product quality control, and (4) service on demand.
4. Warranty must not be used to disclaim legal responsibility by a seller. He must live up to the provisions of warranty or guarantee. Tell the truth to customers as they understand through a warranty. Warranty must build up consumer confidence. False and deceptive warranties compel the consumer movement to demand for additional legislation. The core of any warranty programme ultimately lies in the quality of the maintenance and repair services that can be offered to customers.
If the four guidelines are followed by the manufacturers, repeat sales can be stimulated and Government may not be completed to enact additional consumer legislation. There are millions of appliances being used by consumers all over the world. They are complicated and need honest warranties from the manufacturers. Consumer satisfaction is the key to successful warranty programme. Customer satisfaction with product in use provides the clue as to the effectiveness of the warranty programme.
Implied warranties are promises of the maker that the product is of average saleable quality, will do what the product is normally expected to do, and will last a reasonable period of time. Express warranties are specific promises in writing made by the manufacturer or trader relating to quality, performance, condition or other features. Please note that, when one accepts an express warranty, one may have to give up the implied warranty as a condition of acceptance.
Manufacturer is expected not to give deceptive advertisement of warranties or guarantees as they will defeat the very purpose viz., warranty acting as seller aid. Manufacturer should not give fraudulent warranties and victimise innocent consumers particularly in the case of costly durable goods such as Television, Refrigerators, Motor Cars, Fans, Electrical Appliances, etc. False warranty is an unfair trade practice.
Product Strategy Element # 5. Service Facilities:
Product + Service = competitive advantage. Today, when the customer has a whole array of products laid out before him, it will be the product plus that will lead him to make a choice of the right core product. No one in the organisation must ever be allowed to forget that the operation exists to serve the customers and not vice versa.
For business to survive beyond the year 2000 A.D., Marketing Managers will have to create synergy among customer service and satisfaction, operational productivity and employee’s performance. This will apply to all public sector undertakings under liberalised economy. Under synergy we have 1 + 1-3 (not two).
‘Product Plus’ method is a sustainable marketing strategy offering long-term gains. Not only must companies excel at the physical aspects of production, they also need to be skilled providers of services. The core product that a marketer offers may be matched by his competitor, but where he can score is the key supplementary services.
After-sales service is an important aspect of a marketing transaction. Every increase in the use of machinery, appliances and equipment in all branches of our economy has created a continuous demand for after-sales service, i.e., for the smooth maintenance and repairs at low charges as well as quick access to spare parts and accessories at reasonable prices.
1. It can build up and maintain seller’s goodwill.
2. Mass distribution of costly consumer durables is possible only through after-sales service and consumer credit, e.g., instalment sale.
3. Complaints and grievances regarding servicing and maintenance will be promptly and efficiently dealt with by the seller. Customer satisfaction is the master-key to further sales and growth.
4. Sales campaign will achieve remarkable success if after-sales service is included in sales promotion.
5. Free service during the guarantee period is the best-selling-point in the sale of machinery and appliances. Many companies provide extensive service facilities in support of their marketing programmes. Lack of adequate service-after-sale in India is a real challenge to marketers from consumerism.
All manufacturers and dealers of costly mechanical and electrical machines and appliances must offer a very efficient after-sales service, i.e., free services during the warranty period and thereafter at fair charges. After-sales service covers repairs, spare parts maintenance. After-sales service is an important selling point helping the customer to take a quick decision to purchase durable and costly goods. Such facilities prevent dissatisfaction, frustration, and ill-will among customers.
Market research emphasises the importance of after-sales service in the marketing campaign of costly and durable goods such as typewriters, duplicators, all kinds of office appliances and machine, refrigerators, TV, radios, washing machines, domestic appliances and such other status-symbol goods. It is also necessary in the sale of machines and equipment. Many companies have service centres.
After-sales service has assumed considerable importance in developed countries having matured economies as, in such countries, there are mechanisation and automation in production and standard of living of masses is very high, and in such a push-button economy, use of mechanical and electrical appliances is very common. All countries having mass consumption of durable goods must have adequate and efficient after-sales service. Almost all industrial products need post-sales servicing.
If the product has good after-sales service, the buyer can buy it immediately. After-sales service is much more important than price, style, beauty, get-up and many other factors influencing the prospect.
A brand is a name, trade mark, symbol, picture, or design that helps a customer in instant recall, differentiating it thereby from the competing products of similar nature. A brand name should reflect directly or indirectly some aspects of the product like benefits and functions.
Branding is the best means of advertising and regaining consumer demand in the market place. When goods are sold under brand name, they appear to be different from each other and this gives an added advantage to the marketer. The packaging, apart from protecting the contents, acts as a silent salesman at the point of purchase encouraging impulsive buying. Labelling provides valuable information to the consumer about the product.
A warranty assures the buyer that he will derive certain services and satisfaction from the products. An efficient after sales service i.e. free service during the warranty period and thereafter at fair charges has become an important selling point and means of product differentiation in a competitive market. Quality product with appropriate brand name, package, label, warranty, and service after sale constitute the total product personality.