Lesson 11: PRODUCT STRATEGY

Objectives

At the end of the lesson, you should be able to:

 Explain the components of product;

 Identify the characteristics of a good product or service.

Product Strategy

Products are the actual item offered and sold by the firm to the customers. These may
involve tangible goods, service, or a combination of both.

Three components of Product:

a. Core Value. The core value is the end benefit of the product to the customers. For
example, a customer will purchase insurance for security and peace of mind. Another
example would be a customer purchasing tennis shoes for comfort when playing
tennis sports, or a customer buying mobile phones for communication.

b. Formal Product. Formal product refers to the actual physical or perceived

characteristics of the product which offer a differential advantage over the
competitors. For example, a customer will buy a mobile phone. In purchasing, he
would consider the style, features, specification, packaging and brand of the mobile
phones.

c. Augmented Product. An augmented product refers to the additional non-tangible

offer of the firm. Consider the example above. The firm may offer-after sale service
and warranty just in case some faulty issues happen to the mobile phone. Firms
offering appliances could include free of charge delivery and installations to their
service.

In purchasing or availing goods/services, costumers would want the following

characteristics to be incorporated on the product:

a. Quality level and quality consistency. Customers would look at the quality attribute
of the product/service based on how it is made and how it performs when used.
b. Feature. As discussed in the components of product, features refer to the physical
attribute of the product.
c. Design. Most customers would consider the design attribute of the product which
refers to the look and performance of the product.

d. Brand name. Brand name refers to the name, term, sign, symbol or a combination of
these elements. It has the power to create instant sales, conveys a message of
confidence, quality and reliability of the product. The logo itself affects the brand in
a way that customers can easily recognize the brand or product based on drawing.

e. Labeling of the product. Another important attribute of the product is the label
placed on goods. This can be in the form of a sticker, written information about the
product or tag. Labelling of the product is vital nowadays that people are becoming
health conscious in buying food products since they would look and consider the
information at the label.

f. Packaging. Packaging also confirms the personality of the brand of the product.
This is important since this also conveys quality, safety and legal information of the
product. Packaging can be in the form of boxes, cans, cartons, paper bags, etc.
Name: __________________________________ Score: ______________

Grade & section: __________________________ Date: _______________

ACTIVITY 11

A. Write inside the circle the components of your product or service

B. Write a complete description of your product/service