INTRODUCTION
Welcome to Elements of Marketing, a foundational course designed to provide you with a
comprehensive understanding of key marketing principles and their application in today’s
dynamic business environment. Marketing is at the heart of every successful organization,
driving customer engagement, brand loyalty, and business growth. In this course, you will
explore essential marketing concepts, including:
Product Management
Product Management is a crucial function within organizations that focuses on developing
launching and improving products to meet customer needs and drive business success.
Here are some Key Concepts in the chapter
THE NATURE OF PRODUCT
According to Cannon (1980). A product is anything that can be offered to a market for attention,
acquisition or consumption. He also stated how products can take various forms:
• Physical goods
Physical goods are tangible products that can be seen, touched, and used by consumers.
They are a fundamental form of product in commerce and play a crucial role in the global
economy. Here’s a detailed discussion on physical goods as a form of product (e.g., cars,
clothing)
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• Services
Services as a form of product refer to intangible offerings that fulfill customer needs or
solve problems, similar to physical goods. Unlike tangible products, services are
experiential, perishable, and often require direct interaction between the provider and the
consumer. (e. g banking, healthcare)
• Ideas
Ideas, when treated as products, become intellectual commodities that can be developed,
marketed, and sold just like physical goods or services. In many industries—such as
technology, entertainment, and consulting—ideas are the foundation of value creation.
(e.g., social campaigns)
• Places
Place as a form of product is a key concept in marketing and business strategy. It refers to
the way a location itself is packaged, promoted, and sold to consumers, businesses, or
investors. This approach is commonly seen in tourism, real estate, urban development,
and retail.(e.g., tourist destinations)
• Organizations
When we think of a Product, we often imagine a physical item, software or services.
However, an organization itself can be seen as a product, especially in the context of
business strategy, leadership and innovation. In this perspective, an organization is a
designed entity that provides value, has structure and evolves to meet market or societal
needs (e.g Non-profits).
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• Personalities
Personalities as a form of product is an idea that has become increasingly relevant in the
digital age, particularly with the rise of personal branding, influencers, and content
creators. In this context, a personality is packaged, marketed, and monetized much like a
traditional product or service. (e.g. celebrity endorsements)
The modern marketing perspective view products as problem-solving solutions that combine
tangible and intangible attributes (packaging, color, price, quality, brand) along with the seller's
services and reputation.
LEVEL OF PRODUCT
According to Kotler (1997) the product may be sub divided into three and they are
Installation
Augmented
Free Brand Styling
Product
Packaging
Core Product
Quality Formal Product
Core
Credit
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1. Core Product: This product level is what the buyer is actually buying. It is a package of
a problem-solving device .It is the fundamental benefit that the product provides to the
customer for example, the purchase of a car it is the car that the buyer is actually buying
not the quality, feature, model or brand so the car becomes the core product for the
consumer. Or simply put the fundamental benefit or problem-solving capability (e.g.,
transportation for a car).
2. Formal Product: It is the tangible product that is delivered to the customer including it's
features, quality and design, packaging of the core product
3. Augmented Product: It is the additional services, benefit or feature that are provided to
the customer beyond the actual product. Additional services or benefits (e.g., warranties,
free delivery). product augmented leads the marketers to look at buyer’s total
consumption system.
CLASSIFICATION OF PRODUCTS
Product
Consumer Industrial Operating
Installation
Accessory
Shopping Specialty Equipment
Unsought
Convenience Fabrication Raw
materials Materials
and Parts 4
1. Consumer Product (Goods): Consumer good are products used by the ultimate
consumer or household and in such forms that they can be used without further
processing. and it is divided into four different function
• Convenience goods: these are the goods the customer usually purchase
frequently immediately and with the minimum of effort in buying. (e.g.,
groceries).
• Shopping goods: These are goods that the customer in the process of selection
and purchase characteristically compares an such based as suitability, quality and
price and style. This continues only as long as the customer belives that the gain
from comparing product offset the additional time and effort required. (e.g.,
furniture).
• Specialty goods: Specialty goods are products that have unique characteristics,
features, or benefits that differentiate them from other products in the same
category. (e.g., luxury items).
• Unsought goods: These are products or services that consumers are not aware of,
do not want, or do not think they need. These goods are often innovative or
complex, and may require education or persuasion to create demand. (e.g.,
insurance).
2. The Industrial Goods: They are products that are used primarily for the production of
other goods or rendering services. Industrial goods, also known as business goods, are
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products or services used by businesses, governments, or institutions to produce other
goods or services, or to support their operations. industrial goods are classified into:
• Raw materials: Basic materials used in production, such as lumber, metals, or
minerals.
• Manufactured goods: Products made from raw materials, such as machinery,
equipment, or tools.
• Capital goods: Long-term assets used in production, such as buildings,
machinery, or vehicles.
• Component parts: Parts or components used in the production of other goods,
such as electronics or mechanical parts.
• Operating supplies: Goods used to support business operations, such as office
supplies, cleaning materials, or packaging materials.
BRANDING AND PACKAGING
Every organization in all the case has a way of differentiating their products from that of their
competitors.
1. Brand: A name, sign, or symbol to differentiate products (Olavanda & Everette, 2001).
Branding is one of such ways of distinguishing a company's product from their
competitors. Branding is the process of creating and establishing a unique identity for a
product, service, or company that differentiates it from others in the market. It involves
developing a set of visual, emotional, and cognitive elements that convey a message,
values, and personality. Either type may consist of individual brand or family brand.
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• Individual Brand: A brand that is associated with a single individual, such as a
celebrity, athlete, or thought leader e.g Oprah Winfrey, Elon Musk, and LeBron
James are all individual brands. Individual brands can be highly influential and
can leverage their personal reputation to promote products or services.
• Family Brand: A brand that is associated with a family or a family-owned
business. Family brands are often built around the family's values, traditions, and
reputation. The Trump Organization, the Kennedy family, and the Walton family
(Walmart) are all examples of family brands. Family brands can convey a sense of
stability, tradition, and trust, which can be beneficial for building long-term
relationships with customers.
2. Packaging: Packing is the activity of designing and producing the container or wrapper
for a product. The container or wrapper is called the package. It can place a minor role or
a major role for consumer product. The packing issue revolves round the material of
packaging and colour. Packaging is important. There are three levels of packaging.
➢ Primary package (immediate container)
➢ Secondary package (protects primary package)
➢ Shipping package (for storage/transportation)
Packaging needs to fulfill a number of requirements including
➢ Product protection (from damage, oxidation, etc.)
➢ Trade appeal (attractive to retailers)
• Consumer convenience (easy to use/reseal)
• Sales promotion (differentiates product)
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• Design coordination (matches product design)
• Image coordination (aligns with corporate image)
NEW PRODUCT DEVELOPMENT(NPD)
As a way of avoiding product extinction a firm's decision to introduce new product is taken after
a careful evolution by conceptual and quality personnel in the area of product strategy.
Types of Innovation:
• Continuous Innovation: Minor changes with little impact on consumer behavior (e.g.,
improved detergent formulas)
• Dynamically Continuous Innovation: More disruptive changes creating some new
products (e.g., electric toothbrushes)
• Discontinuous Innovation: Establishes entirely new products and consumption patterns
(e.g., televisions, computers)
Categories of new products:
• Truly innovative/unique products
• Significant replacements for existing products
• Imitative products (new to company but not market)
FOUR DEFINITIONAL CRITERIA FOR NEW PRODUCTS:
1. Newness from existing products:
• Strategic innovation (minor changes like color TVs)
• Functional innovation (new ways to fulfill functions like dishwashers)
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2. Newness in time: Products marketed as "new" for 2-3 years
3. Newness in sales penetration: Products with <10% of potential market
4. Consumer newness: Products perceived as new by consumers
DIMENSION OF NEWNESS
Innovation may be in
• Functions Sense: products which are functionally new performs either a previously
unfulfilled function or an existing function in a new way.
• Technical Sense: new products in technical characteristics employ new materials new
ingredients and sometimes new form.
• Style sense: frequently stylistic innovation is intended to create in the customer a
perception of newness and are consequently centered on features generally external one
which will be most obviously different.
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PRODUCT PLANNING AND DEVELOPMENT PROCESS
The NPD process is depicted as a structured, multi-stage framework, though the text cautions
against viewing it as entirely orderly or predictable. The stages include:
Idea
Generation
Product
Idea Business Test Commerci
Development
Screening Analysis Marketing alization
Not Not
favourable favourable
Unaccepted Discontinue
idea
Stages of new product development process adopted from Maclayton & Nwokah (2002)
1. Idea Generation: Sourcing ideas from various channels, ranging from incremental
improvements to radical innovations. Creativity is emphasized, but the process may resist
formalization.
2. Idea Screening: Filtering ideas to align with company goals. Rough criteria eliminate
non-viable ideas early, while promising ones undergo detailed evaluation.
3. Idea Evaluation (Business Analysis): Assessing technical feasibility and profitability.
Decisions rely on available data, managerial judgment, and potential strategic benefits
(e.g., market expansion).
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4. Technical Development (Prototype): Transforming ideas into physical products. This
phase is time-consuming and prone to setbacks (e.g., technical hurdles, market changes).
Commitment to projects may persist despite adverse signals.
5. Testing: Validating the product’s technical and commercial viability. Test marketing
faces challenges, such as evolving consumer needs influenced by the product itself.
6. Commercialization: Launching the product into the market. Success depends on prior
planning and adaptability to unforeseen external factors (e.g., competitive actions).
CHALLENGES IN NPD
• Uncertainty: Data limitations and dynamic environments make it difficult to predict
outcomes, even with advanced screening or financial evaluation.
• Organizational Momentum: Projects may continue due to sunk costs or internal
advocacy, even when evidence suggests termination.
• Market Interaction: Consumer needs may shift during development, complicating
testing and commercialization.
• Formal vs. Flexible Processes: While structured stages provide clarity, over-reliance
on rigid procedures can stifle creativity or adaptability.
PRODUCT LIFE CYCLE MODEL AND STRATEGIES
The product life cycle (PLC) model is a framework that describes the stages a product goes
through from its introduction to its decline. The PLC model helps businesses understand and
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manage the life cycle of their products, making informed decisions about investments, marketing
strategies, and product development.
Conception Introduction Growth Maturity Decline sales
and Product Curve
Development
Profit Curve
Investment
Stages of the Product Life Cycle Model
• Introduction Stage: The product is launched, and the business focuses on creating
awareness and generating interest.
i. Invest in marketing: Create awareness and generate interest through
advertising, promotions, and public relations.
ii. Focus on product development: Continuously improve the product to meet
customer needs and stay competitive.
iii. Build distribution channels: Establish relationships with distributors,
wholesalers, and retailers.
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• Growth Stage: The product gains popularity, sales increase, and the business expand
its marketing efforts.
i. Increase marketing efforts: Expand advertising, promotions, and public
relations to reach a wider audience.
ii. Improve product features: Add new features, improve quality, and enhance
customer experience.
iii. Expand distribution channels: Enter new markets, and establish
relationships with more distributors and retailers.
• Maturity Stage: The product reaches its peak, sales stabilize, and the business
focuses on maintaining market share.
i. Maintain marketing efforts: Continue advertising, promotions, and public
relations to maintain market share.
ii. Focus on customer retention: Implement loyalty programs, offer excellent
customer service, and provide value-added services.
iii. Optimize operations: Improve efficiency, reduce costs, and streamline
processes.
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• Decline Stage: The product's sales decline, and the business must decide whether to
maintain, harvest, or discontinue the product. What organization can be advised to do
at the decline stage:
i. Harvesting (Milking the product)
- Reduce marketing and operational costs while continuing to sell to
loyal customers
- Maximize short-term profits before phasing out the product
ii. Mergers or Acquisitors
- Sell Product line to another company that can manage it better
- Merge with a competitor to extend market reach
iii. Transition to new products
- Shifts focus to newer, more profitable products
- Use brand loyalty to introduce upgraded or related products
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CONCLUSION
Product management is the central function that propels business success through the
development, launch, and enhancement of products to satisfy customers' requirements.
Throughout this discussion, we highlighted the complex nature of products that can be anything
ranging from physical products to services, ideas, and more. The three levels of a product core,
formal, and augmented highlight the need to provide not just the basic benefit but also physical
attributes and value-added to customers.
The distinction between industrial and consumer products continues to highlight the varied ways
that products reach different markets. Branding and packaging are critical to product
differentiation and enrichment, and the new product development (NPD) process offers a flexible
yet systematic approach to driving innovation from idea through commercialization.
Studying the product life cycle (PLC) model equips businesses with strategies to survive every
stage introduction, growth, maturity, and decline to remain relevant and profitable along the way.
Despite problems like uncertainty and market forces, an effective product management strategy
can lead to long-term success. Product management excellence, in short, is a combination of
creativity, planning, and responsiveness, all directed at creating customer value and delivering
organizational objectives. Armed with this knowledge, companies can flourish in competitive
markets and build long-lasting customer relationships.
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REFERENCES
Anyanwu (1999). Cited for product life cycle strategies and innovation types (e.g., improved
detergents as continuous innovations).
Cannon (1980). A Product is anything that can be offered to a market for attention, acquisition or
consumption.
Maclayton & Nwokah (2002) Cited in Figure 8 ("Stages of New Product Development Process")
as the source for the conceptual model of new product development stages (e.g., idea
generation, screening, test marketing, commercialization).
Okwandu & Ekerette (2001). Definition of brand.
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