Product and the marketing mix

Product is the good or service a business sells to its customers. A good is something physical, such as a refillable water bottle; a service is something done for the customer, such as repairing a mobile phone. Product is one of the four Ps of the marketing mix — product, price, promotion and place — the four decisions a business blends together to sell successfully.

Why a product must meet customer needs

A product only sells if it does the job customers want, at a quality and reliability they accept. If a café's sandwiches are stale or its service is slow, buyers switch to a rival, because most markets have a competitor ready to serve them. Meeting customer needs is therefore the starting point of the mix: the other three Ps can only work if there is a product people actually want to buy.

Product choices are tied to the other three Ps

Product decisions cannot be made on their own. A tough, long-lasting water bottle made from expensive materials can support a higher price, but only if promotion convinces buyers that the quality is worth paying for, and only if it is sold where those buyers shop — an outdoor equipment store rather than a budget supermarket. Change the product and the price, promotion and place usually have to change with it; change the price or the place and the product may need adjusting too.

As part of the product element, a business decides:

• how to balance the design mix of function, aesthetics and cost;
• where the product sits in the product life cycle, and whether extension strategies are needed to keep sales going;
• how far to use differentiation, including a unique selling point, so the product or service stands out from competitors.