Tuesday, 12 August 2014

Setting product strategy

Defining a product is indeed a Herculean task. What separates one product from the next? That too in comparison to the products offered by the same company (perhaps even within the same product line!) versus those offered by the competition. It is up to the marketers to project the characteristics of each product as distinctly as possible so that they might be able to persuade the customer to pick their product from a sea of products available.
Cigarettes are subject to this conundrum as well. Perhaps even more so than the others since people simply light up a cigarette from another brand when they have the urge to smoke in the absence of their preferred brand. Thus it is very important for a cigarette brand, like Classic Milds, to be perceived as being different. Otherwise, it will simply become a competition in terms of who has a better distribution network.

 While applying the customer-value hierarchy, the following come to mind:
- Core benefit: A cigarette offers relief and satisfaction to the smoker. The smoker awaits the next puff as much as he or she enjoyed the previous one.
- Basic product: A basic product would require the tobacco that is to be smoked to be rolled into a smokeable object. In the most basic form, tobacco rolled up into smoking leaves would be a basic product. Thus, a beedi would be a basic product.
- Expected product: An expected product would be qualities or attributes that the customer has come to expect. A cigarette being rolled in premium smoking paper as opposed to beedi leaves and having a smoking filter would become an expected product.
- Augmented product: A product that exceeds customer expectations. Special commemorative packs such as the following one would be an example of augmented product:

- Potential product: A potential product would be a product that has all the features of the previously mentioned products along with any innovations that might offer something radical to the customer. An example would be a Milds pack that also has a match box inside it.

The different product levels can be understood in context with the 3C's model.
The different product levels target different customers. For example a beedi would target a different class of customers than a cigarette would. This in-turn would be different from the class of customers that a cigar brand would target perhaps. Competition would depend entirely on what type of product is being sold. The competition in the beedi segment would be different from the competition in the cigarette segment. Thus, corporations that create different products have a certain customer class in mind when marketing a product and this in-turn would create competition accordingly.
Therefore, a Ganesh beedi (from Ganesh Bidi exporters) would compete with a 502 Pataaka beedi (from Pataka Industries), a where as a Classic Milds (from ITC) would compete with a Goldflake (from ITC) or a Marlboro Milds (from Philips Marlboro Industries).

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