Imagine that your research and development department wants to come up with a new product. Now how would you describe this product inside your company? What would you tell the customers after it has been released in the market? A new product requires to be categorized in a basic way so that people talking about it immediately picks up its features and quality without even taking a look at its label. In the marketing world, this work has been made flexible through the introduction of six product categories as described below. As a marketer, you have to basically check which category best suits your product.
1. New-to-the-world: This category is for those products that have just been invented. No one knows how they work. So knowledge about what they do and how they are used must be imparted to potential customers. And once they start getting buyers, they give birth to new markets and thus companies producing them get to enjoy the first mover advantage. Another term for new-to-the-world is really-new.
2. New-to-the-firm: Sometimes companies wish to produce products that are new to them, but old to the customers. The markets already exist and the companies through the products just need to enter into them. Now how would the companies categorize these products? They would mark them as new-to-the-firm. New-to-the-firm is also referred to as new product lines.
3. Addition to existing product lines: Under this category, both new-to-the-world and new-to-the-firm products can be added. It is very common for big companies often embark on creating products to add to the existing product lines. There are many reasons behind this. But the ultimate one is profit.
4. Improved and revised: Companies wishing to offer the best to customers often restudy their products so every bit of them gives the best service. Such products are categorized as improved and revised. It is usually seen this category is used by companies specializing in electronic and makeup products.
5. Repositioning: Many existing products often end up being valuable for other usage. When companies realize it they reintroduce them to the customers by emphasizing this other usage. This is basically known as repositioning.
6. Reduction in cost: It can cost a lot of money to make a new product. However, after careful study sometimes companies find out that the same product can be made at lower cost and thus its price can also be reduced. In short, an expensive product’s cheaper version is marked as reduction in cost or cost reduction.
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