Product Innovation & Branding
It should be known that no-one can ever completely design a proposition that meets
everyone’s needs all of the time.
What does the term ‘product’ mean?
The term ‘proposition’ includes the ‘tangible’ & ‘intangible’ attributes, not just the physical
goods but also to services, ideas, people, places, experiences and even a mix of these
various elements.
A proposition/offering is anything that can be offered for use and consumption, in exchange
for money or some other form of value.
What are products?
A product is anything capable of satisfying customer needs.
Products are bundles of benefits (different benefits integrated into their offerings)
Benefits can be both: Tangible – which refers to an item’s ability to be touched and
stored. Intangible – things that cannot be touched or stored such as services.
Spectrum of proposition combinations
This spectrum of product-service combinations incorporates strategies designed to increase
the value offered to customers through improved services. HOWEVER, developing the
service element to provide a point of differentiation has not always been successful, as it
can attract price competition. To avoid this, some businesses develop a 3 rd approach based
on improving customer experience. – Customer experience strategy refers to the memories
& fantasies individuals retain/imagine as a result of their interaction with an offering –
Tynan and McKenzie 2009
Creating product bundles
A product is a ‘bundle of benefits’. – When people buy propositions, they do not just buy for
the function that the product offers, as there are other complexities involved. E.G. when
drinking coffee, the taste is important, however in addition to this core benefit, people are
, also attracted to the packaging, the price and other psychosocial associations that we have
learnt about the brand.
There are 3 different proposition forms:
1. Core proposition – the real core benefit. This
may be a functional benefit in terms of what the
product can do for you, or an emotional benefit
in terms of how the product makes you feel.
2. Actual/Embodied proposition – consists of the
physical good or delivered service which provides
the expected benefit. E.g. the durability, design,
packaging, brand name.
3. Augmented proposition – extra benefits such as, credit and financing, delivery,
installation, warranties.
When brought together, businesses hope to provide customers with a reason to buy and
keep buying.
Development in the web, social media & other digital tech has impacted on the nature of
the offering and benefits accruing from using it. This opened opportunities to redefine core
& actual propositions, such as supplementing them with ‘information’ about the offering.
Chaffey et al 2009 suggests there are several ways in which ‘digital value’ can help augment
the proposition. E.g. coordinating activities to engage customers through an increasingly
digital purchase journey in order to empower the consumer to build their own identity.
Businesses now have also provided evidence of the awards they have won, whilst others
parade other positive comments and endorsements, all as a part of a content marketing
strategy. – These are designed to provide credibility, reduce risk and enable people to
engage with a brand.
Classifying products
There are 2 main ways of classifying products: Consumer products and B2B products
CONSUMER PRODUCTS -
The first way of classifying consumer products is to consider them in terms of
durability. ‘Durable goods’ often require the purchaser to have high levels of
involvement in the purchase decision. There is a high perceived risk and so
consumers can spend time, care and energy in making the right decision. –
Marketers should therefore provide sufficient information and support.
‘Non-durable goods’ such as food/grocery reflect low levels of involvement. Risk is
seen as low so there is little to no need to shop around for the best possible price.
Buyers may buy on availability, price, habit or brand experience.
Convenience products are ‘non-durable’ and are bought due to consumers not
wanting to put in very much effort. Most decisions in this category are made
