The tangible or intangible goods or services to be marketed are planned as early as in the business idea development phase.
Products can be divided into categories based on the purpose of use or the target customers, for example. Product categories can be utilised when making marketing decisions or when following up on product life cycles and rotation.
In a product strategy, decisions are made that are also related to the goals of marketing:
the products marketed by the company and the targeted customer segment
the level of quality that is aimed at
will the company compete with the current products or develop/acquire new products
is the target group formed by current or new markets.
“Variety” refers to the number of product categories, while “assortment” refers to the number of products in a specific product category. When making decisions on these, the goals and resources of the company must be taken into account, along with the capital to be tied up and the competitive situation. From time to time, you should check that the varieties enable future increase in sales and profitability. Variety and assortment elimination is part of product policy.
Sometimes it may make sense to have the assortment include products that do not generate profit. These products are used to attract customers, who can then additionally be sold products that maintain profitability.
Good availability means that customers get their desired products quickly, easily and promptly. This is affected by factors such as distribution channel decisions and the availability of products and staff. A company can also restrict availability and manufacture a test batch of products to test sales on the market, for example.
Companies should always take into account that the quality of a product or service is assessed by customers from their own perspective, which may differ from the company's own definition of quality. The customer's impression of quality combines the price, auxiliary services and the way the product is marketed, etc.
Product life cycle
A product with a short market life can perhaps stay on the market for just a few months, whereas a long market life could mean several years.
Stages in a life cycle include:
termination of sales.
In order to secure profitable operations, a company must introduce a new product alongside a poorly selling product or one that is turning towards the end of its life cycle.
Product markings and packaging
Some product markings are mandatory. For example, consumer goods packaging must display a name indicating the purpose of use (e.g. hair dye), as well as the name of the manufacturer, procurer or importer. The mandatory markings for foodstuffs can be found on the website of the Finnish Food Safety Authority (Evira).
According to regulations, the markings must usually be presented in one or several languages understood by consumers in the country of sale.
You should carefully consider the material and size of product packages, as this has an impact on transport and material costs, for example. Bear in mind that the responsibility for package disposal may lie with the seller, importer or manufacturer instead of the consumer. Packaging is also an important part of advertising: a good package stands out and can create positive associations.
The Europa portal provides summaries of EU legislation on product markings and packaging.
Product and service development