 When deciding on which different elements a product or server should include, marketers often talk about defining, developing, managing or replacing products. However, before we start talking about products, let us just list the learning goals for this video. The goal is to establish an understanding of what defining a product means, why we need to know about it and how we could go about doing it. We will also look at the connection with the rest of the marketing mix. Secondly, we will provide an overview of some additional tools and theories we as marketers can use when defining, developing, managing or replacing products or services. So let us begin. What is the meaning of defining a product and what is the connection to the rest of the marketing mix? When you are asked to design the marketing mix, you need to make decisions on four or seven core elements, also known as the four or the seven Ps. First of all, issues concerning the product, which is what this video will address. Secondly, a decision on price. Thirdly, you will need to decide on the place, through which channels will you distribute the product or service. We also need to make a plan on which promotional activities we will carry out in order to tell our type of group about our product and encourage them to buy. If we are dealing with an offering that is better described as a service or perhaps a product that includes large elements of service, we might also want to look at the additional three Ps, the people that are involved in delivering the service, the process that our customers will go through in order to receive our service, and the physical evidence, any visible or tangible elements that a customer will see, hear or in other ways experience when receiving the service. None of the four or the seven Ps should be decided on in isolation. However, product is the P which we will focus on in this video. So what does it mean to define a product? To define a product means to make some decisions on what exactly to offer the customer. And why? As marketers we need to know how to do this in order to fulfill our target group's needs, wants and desires, and to do this better than the competition. In other words, we are looking to differentiate our product offering. Now let's look at how we could go about doing this. Here we will use a few simple tools and we will divide our process into three simple steps. Let us use this cafe as an example. It is called the French Cafe and it has recently opened up in town. It's specialised in French cakes and desserts. Step number one. Briefly describe their primary target group is women who are out shopping with their girlfriends. They value quality over price. They eat out often. They lead busy lives. They value spending time together. And they are quite image conscious. This knowledge is important to us when deciding on what the cafe's product offering should include. So when defining the product, firstly we need to choose, investigate and understand our target group so that we can define a product that fulfils the needs, wants and desires of our chosen target group. Secondly we should look at how we can augment the product. To augment means to make greater by adding something. This is how we fulfil our target group's needs and desires, differentiate our product from the competitors and subsequently build our product or business brand. Theory tells us that we can look at six different areas of augmenting a product. Let us go through them using our example with the French Cafe. Firstly, quality and design. We will look for clues in our target group description. Knowing that our target group values quality over price, we will decide that we will use high quality ingredients in our cakes and desserts and that we should hire a trained confectioner to ensure the French look of the cakes. Secondly, packaging. Looking at the target group description, we might for the same reasons as before decide that we will serve the cakes and desserts using romantic French looking plates, cutlery and high quality napkins. Thirdly, service. Knowing that our target group has most likely been on their feet all day, we will add to the French Cafe experience by providing a high level of service in the Cafe. Trained waiters will show the customers to their tables, where they will take their orders, serve them and handle the payment. Delivery. We could consider offering a home delivery of cakes and desserts. This might make us stand out from the competitors, but since our target group is more likely to eat out, we will exclude this idea for now, and not included in our product offering. Brand name and image. In time, our brand named the French Cafe will also add to the perceived value of our cakes and desserts and therefore our desired brand image. And this will of course appeal to our target group's desire of maintaining their own image. However, this will not happen instantly. This is something that will develop over time. Providing guarantees is another way of augmenting a product, but maybe we would find that more relevant with other types of products. For example, offering a three year guarantee with the purchase of a new washing machine, not so relevant with cakes and desserts. And there are no indications of the need for guarantees from our target group description. So we will not provide guarantees in our product offering. On the basis of our knowledge about the target group, we have now defined how we will augment the product, the cakes and desserts. We decided on a high level of quality design and packaging. We decided on a high level of service. We decided not to offer home deliveries or guarantees. And we determined that the brand name and image will, in time, provide added value to our augmented product. This way we can give the owner of the French Cafe specific details of how to meet the desired target group's needs and desires by defining exactly what to include in the product offering. So moving on to step number three. In order to set ourselves up for how to communicate the augmented product to our target group, we need to get past the technicalities of the product details and features. It is safe to say that the majority of customers will choose a product not based on the specifications themselves, but rather based on the advantages and benefits those features bring them. Listing the benefits of our product therefore summarizes our product offering in the sense of how to communicate our product when we later design our promotional activities. Let us look at some of the features in our product offering. The high quality ingredients of our cakes is a feature. So features are facts or specifications. They are not so motivating in themselves. However, we can translate this feature into an advantage of a better tasting and better looking cake. Advantages are then the effects of the feature and they are somewhat more motivating than the feature itself. Furthermore, this advantage gives our target group the benefit of a highly enjoyable experience that allows them to preserve their all important self image. So benefits are the values that this feature brings the customer and this is highly motivating to the customer. Another feature is our added service of a waiter. The advantage for our target group is that they don't have to self serve. The benefit is that they can concentrate on spending time together, enjoy a nice treat and a relaxing break from their busy day. Being serviced adds to the perceived value of our product offering especially for our target group. So benefits are what gives the customer value and therefore they are often described in terms of economy, time, comfort or values. In our example, comfort and values are the benefits. These values and benefits should be communicated to the target group in our mix of promotional activities. We can prepare many more benefits for communication. So pause the video for a minute and see if you can identify some additional features and translate them into advantages and most importantly benefits for our chosen target group. So to sum up, we should choose, investigate and understand our target group. We should define how we will augment the product and we should understand the benefits that our product gives the target group. We have now established an understanding of what defining a product means, why we need to know about it and how we can go about doing it. So let's move on. In addition to the factors we have just discussed, we as marketers have many additional tools and theories we can use to guide us when defining, developing, managing or replacing a product or a service. These will not be described in detail in this video but let us just introduce an overview of some of the tools and theories we might want to use. We can look at where in the product lifecycle our product is and which strategic marketing objectives we have. We can investigate brand equity and use other branding tools. If we are dealing with a line of products, we could benefit from using the Boston or GE model. When considering how to facilitate growth, we can use and source product growth matrix. When talking about replacing existing products, we would benefit from looking at some different product replacement strategies. And finally, if we're developing or introducing a new product and innovation, we should look at how some different characteristics of our innovation will affect how quickly we can expect to be adopted by the market. We have now established an understanding of what, why and how to define a product and lastly we have presented an overview of some additional tools and theories available to us when defining developing, managing or replacing products. To learn more about how to use the different tools and theories introduced in this video I recommend that you read chapters 9, 11 and 12 in David Jobber and Fiona Innis-Chadwick's principle and practice of marketing 7th edition. My name is Tina Wade. Thank you for watching.