Product and service decisions

Marketers make product and service decisions at three levels:

• 
  Individual product decisions,
  
• 
  Product line decisions and
  
• 
  Product Mix Decisions
  

1. 
   Individual product decisions:-
   

Specification is very important in agricultural products. Some markets will not take produce unless it is within their specification. Specifications are often set by the customer, but agents, standard authorities (like the EU or ITC Geneva) and trade associations can be useful sources. Quality requirements often vary considerably. In the Middle East, red apples are preferred over green apples. In one example French red apples, well boxed, are sold at 55 dinars per box, whilst not so attractive Iranian greens are sold for 28 dinars per box. In export the quality standards are set by the importer. In Africa, Maritim (1991)², found, generally, that there are no consistent standards for product quality and grading, making it difficult to do international trade regionally.

Packaging serves many purposes. It protects the product from damage which could be incurred in handling and transportation and also has a promotional aspect. It can be very expensive. Size, unit type, weight and volume are very important in packaging. For aircraft cargo the package needs to be light but strong, for sea cargo containers are often the best form. The customer may also decide the best form of packaging. In horticultural produce, the developed countries often demand blister packs for mangetouts, beans, strawberries and so on, whilst for products like pineapples a sea container may suffice. Costs of packaging have always to be weighed against the advantage gained by it.

Increasingly, environmental aspects are coming into play. Packaging which is non-degradable - plastic, for example - is less in demanded. Bio-degradable, recyclable, reusable packaging is now the order of the day. This can be both expensive and demanding for many developing countries.

Labelling

Labelling not only serves to express the contents of the product, but may be promotional (symbols for example Cashel Valley Zimbabwe; HJ Heinz, Africafe, Tanzania). The EU is now putting very stringent regulations in force on labelling, even to the degree that the pesticides and insecticides used on horticultural produce have to be listed. This could be very demanding for producers, especially small scale, ones where production techniques may not be standardised. Government labelling regulations vary from country to country. Bar codes are not widespread in Africa, but do assist in stock control. Labels may have to be multilingual, especially if the product is a world brand. Translation could be a problem with many words being translated with difficulty. Again labelling is expensive, and in promotion terms non-standard labels are more expensive than standard ones. Requirements for crate labelling, etc. for international transportation will be dealt with later under documentation.

Individual product decisions also include product support services. Usually, the company’s offer includes some form of customer service, of product support services. This can be a minor part of the product or a major part of the total offering. Product support services contribute to the augmented product, as defined by the three levels of product. Without doubt, support services do also belong to the significant individual product decisions because they contribute to the customer’s overall brand experience. The key is to keep customers happy after the sale in order to build lasting relationships.

2. 
   Product line decisions
   

• 
  The primary one of the product line decisions is the product line length. This means nothing else than the number of items in a product line. Certainly, the product line is too short if the company could increase profits by adding items to it. However, it is too long if profits could be augmented by dropping items. In order to find that out, each item in the product line should be assessed on a regular basis in terms of sales and profits. Then, the company can understand how each item contributes to the product line’s overall performance and make the right product line decisions.
  
• 
  The product line length can be influenced by company objectives and resources. For instance, a company might want to maintain longer product lines to protect against economic swings.
  

• 
  Expanding the product line is the second one of the product line decisions. A company can expand its product line in two ways: Line Filling and Line Stretching. Both of these product line decisions involve adding items to the line. Line filling means adding more items within the present range of the line. Reasons for doing so include the goals to reach extra profits, to satisfy dealers, to use excess capacity etc. However, the company must not exaggerate: new items should be noticeably different from existing ones. Otherwise, customer confusion might be the consequence.
  
• 
  Line stretching means lengthening the product line beyond the current range. We can differentiate between downward, upward, and 2-way stretching. A company located at the upper end of the market may choose to stretch the product line downward. Thus, it may attract low-end customers and reach new targets. Upward stretching is appropriate if the company wants to add prestige to the current product line. Also, better growth rates and higher margins may be the attractive factor for upward stretching. To give an example: leading Japanese car manufacturers all introduced an upmarket brand: Honda with Acura, Toyota with Lexus, Nissan with Infiniti.
  
• 
  For a company in the middle range of the market, stretching the product line in both directions may be best. Thereby, the company can serve both the upper and lower ends of the market.
  
• 
  Product line decisions, obviously, need to be made carefully. However, the product line is only one element of the much larger product mix. Therefore, product line decisions need to be integrated with product mix decisions.
  

3. 
   Product Mix Decisions
   

An organisation's product mix has following four dimensions :-

1. 
   Width,
   
2. 
   Length,
   
3. 
   Depth, and
   
4. 
   Consistency.
   

The width of an organisation's product mix pertains to the number of product lines that the organisation is offering. For example, Hindustan Uni Lever offers wide width of its home care, personal care and beverage products. Width of HUL product mix includes Personal wash, Laundry, Skin care, Hair care, Oral care, Deodorants, Tea, and Coffee.

The length of an organisation's product mix pertains to the total number of products or items in the product mix. As in the given diagram of Hindustan Uni Lever product mix, there are 23 products, hence, the length of product mix is 23. 

The depth of an organisation's product mix pertains to the total number of variants of each product offered in the line. Variants includes size, colour, flavors, and other distinguishing characteristics. Forexample, Close-up, brand of HUL is available in three formations and in three sizes. Hence, the depth of Close-up brand is 3*3 = 9.

As consumers, we buy millions of products every year. And just like us, these products have a life cycle. Older, long-established products eventually become less popular, while in contrast, the demand for new, more modern goods usually increases quite rapidly after they are launched.

The product life cycle has 4 very clearly defined stages, each with its own characteristics that mean different things for business that are trying to manage the life cycle of their particular products.