A core product or flagship product is a company's primary promotion, service or product that can be purchased by a consumer. [1] Core products may be integrated into end products, either by the company producing the core product or by other companies to which the core product is sold.
The concept of a Core Product originates from Philip Kotler, in his 1967 book – Marketing Management: Analysis, Planning and Control. [2] It forms the first level of the concept of Three Levels of a Product.
Kotler suggested that products can be divided into three levels: core product, actual product and augmented product. [3] The core product is defined as the benefit that the product brings to the customer. The actual product refers to the tangible object and relates to the physical quality and the design. [4] The augmented product consists of the measures taken to help the consumer put the actual product to use. [1] By using a mixture of the three levels of product in research and development, business firms can better understand their customers, better position themselves in the market and create a more successful product. [5]
The New Product Development (NPD) process, often referred to as the Stage-Gate innovation process, was developed by Dr. Robert G. Cooper as a result of comprehensive research on reasons why products succeed or fail. [6] The process initially focuses on idea generation that defines the core product. [7] If the core product is innovative and addresses market demand, it can lead to successful actual products. [8]
One marketing strategy emphasizes product issues. In a competitive market, product-based success requires that customers obtain significant value from the core product. [9]
Product marketing is the process of promoting and selling a product to an audience. It further includes defining the scope of the product line, identifying potential markets for a product and determining optimal pricing. [10] Product Marketers also act as a bridge between Sales, Marketing and Product, reporting on the market's response to product launches and updates in order to refine messaging and features.[ citation needed ] As mentioned, the core product directly affects customers' interest level. [11]
A company usually does research and development (R&D) before creating a new product. In order to meet customers' needs, the core product is an important element that attracts people to buy the firm's product. International marketing research conducted by the University of Southern California found that customers and professionals usually emphasize service characteristics such as heterogeneous products (variation in standards among providers, frequently even among different locations of the same firm) and inseparability from consumption. [12] This can show how important of having a core product is to a firm, in order to meet customer expectation. And this has to be done only by injecting money to do R&D.
The competition between businesses focuses mainly on the distinctiveness of the Augmented Product and the Core Product, according to Kotler. It is about consumer perceptions of purchasing a product and less about value. He states: “Competition is determined not so much by what companies produce, but by what they add to their product in the form of packaging, services, advertising, advice, delivery (financing) arrangements and other things that can be of value to consumers”. To beat the competition, product companies focus on factors to which consumers attach extra value, such as packaging, advertisements, service and payment terms. The element of surprise is key. [13]
Core products are usually the first products that the company created and sustained itself from its founding like the BASIC for Microsoft, The Apple II computer for Apple Inc. and the Google Search platform. Therefore, emphasis is placed on the profitability of core products while working on other products, hoping that they will become a competency. Core products usually make the most profit.
Examples of core products by notable IT firms include:
The above core products are then produced as an actual product. Examples of how the core product and actual product are used together include:
Marketing is the act of satisfying and retaining customers. It is one of the primary components of business management and commerce.
In sales, commerce, and economics, a customer is the recipient of a good, service, product, or an idea, obtained from a seller, vendor, or supplier via a financial transaction or an exchange for money or some other valuable consideration.
Distribution is the process of making a product or service available for the consumer or business user who needs it, and a distributor is a business involved in the distribution stage of the value chain. Distribution can be done directly by the producer or service provider or by using indirect channels with distributors or intermediaries. Distribution is one of the four elements of the marketing mix: the other three elements being product, pricing, and promotion.
Pricing is the process whereby a business sets the price at which it will sell its products and services and may be part of the business's marketing plan. In setting prices, the business will take into account the price at which it could acquire the goods, the manufacturing cost, the marketplace, competition, market condition, brand, and quality of the product.
In marketing, market segmentation or customer segmentation is the process of dividing a consumer or business market into meaningful sub-groups of current or potential customers known as segments. Its purpose is to identify profitable and growing segments that a company can target with distinct marketing strategies.
The marketing mix is the set of controllable elements or variables that a company uses to influence and meet the needs of its target customers in the most effective and efficient way possible. These variables are often grouped into four key components, often referred to as the "Four Ps of Marketing."
Marketing management is the strategic organizational discipline that focuses on the practical application of marketing orientation, techniques and methods inside enterprises and organizations and on the management of marketing resources and activities. Compare marketology, which Aghazadeh defines in terms of "recognizing, generating and disseminating market insight to ensure better market-related decisions".
Marketing strategy refers to efforts undertaken by an organization to increase its sales and achieve competitive advantage. In other words, it is the method of advertising a company's products to the public through an established plan through the meticulous planning and organization of ideas, data, and information.
Megamarketing is a term coined by U.S. marketing academic, Philip Kotler, to describe the type of marketing activity required when it is necessary to manage elements of the firm's external environment as well as the marketing variables; Kotler suggests that two more Ps must be added to the marketing mix: public relations and power.
A business can use a variety of pricing strategies when selling a product or service. To determine the most effective pricing strategy for a company, senior executives need to first identify the company's pricing position, pricing segment, pricing capability and their competitive pricing reaction strategy. Pricing strategies and tactics vary from company to company, and also differ across countries, cultures, industries and over time, with the maturing of industries and markets and changes in wider economic conditions.
In marketing, segmenting, targeting and positioning (STP) is a framework that implements market segmentation. Market segmentation is a process, in which groups of buyers within a market are divided and profiled according to a range of variables, which determine the market characteristics and tendencies. The S-T-P framework implements market segmentation in three steps:
The target audience is the intended audience or readership of a publication, advertisement, or other message catered specifically to the previously intended audience. In marketing and advertising, the target audience is a particular group of consumer within the predetermined target market, identified as the targets or recipients for a particular advertisement or message.
Value-based price, also called value-optimized pricing or charging what the market will bear, is a market-driven pricing strategy which sets the price of a good or service according to its perceived or estimated value. The value that a consumer gives to a good or service, can then be defined as their willingness to pay for it or the amount of time and resources they would be willing to give up for it. For example, a painting may be priced at a higher cost than the price of a canvas and paints. If set using the value-based approach, its price will reflect factors such as age, cultural significance, and, most importantly, how much benefit the buyer is deriving. Owning an original Dalí or Picasso painting elevates the self-esteem of the buyer and hence elevates the perceived benefits of ownership.
Global marketing is defined as “marketing on a worldwide scale reconciling or taking global operational differences, similarities and opportunities to reach global objectives".
In marketing, a company’s value proposition is the full mix of benefits or economic value which it promises to deliver to the current and future customers who will buy their products and/or services. It is part of a company's overall marketing strategy which differentiates its brand and fully positions it in the market. A value proposition can apply to an entire organization, parts thereof, customer accounts, or products and services.
Market environment and business environment are marketing terms that refer to factors and forces that affect a firm's ability to build and maintain successful customer relationships. The business environment has been defined as "the totality of physical and social factors that are taken directly into consideration in the decision-making behaviour of individuals in the organisation."
Customer experience, sometimes abbreviated to CX, is the totality of cognitive, affective, sensory, and behavioral customer responses during all stages of the consumption process including pre-purchase, consumption, and post-purchase stages.
Multicultural marketing, also known as ethnic marketing, is a strategic approach in marketing aimed at specific ethnic audiences distinct from the majority culture within a country, often referred to as the "general market." This practice leverages the unique cultural attributes of ethnic groups—including language, traditions, celebrations, and religious practices—to effectively communicate with and persuade these audiences. In multicultural societies like the United States, marketers utilize cultural and ethnic diversity to develop targeted consumer segments. This entails tailoring marketing initiatives directly to the cultural insights and preferences of diverse consumer groups.
Product strategy defines the high-level plan for developing and marketing a product, how the product supports the business strategy and goals, and is brought to life through product roadmaps. A product strategy describes a vision of the future with this product, the ideal customer profile and market to serve, go-to-market and positioning (marketing), thematic areas of investment, and measures of success. A product strategy sets the direction for new product development. Companies utilize the product strategy in strategic planning and marketing to set the direction of the company's activities. The product strategy is composed of a variety of sequential processes in order for the vision to be effectively achieved. The strategy must be clear in terms of the target customer and market of the product in order to plan the roadmap needed to achieve strategic goals and give customers better value.
Demarketing may be considered “unselling” or “marketing in reverse”, which includes general and selective demarketing.