It includes the physical item or service itself, along with design, quality, features, branding, packaging and the overall consumer experience.

Effective product strategy ensures that customers recognise value and prefer the product over alternatives in the market.

The key elements of product strategy are:

1) Positioning
2) Features
3) Branding
4) Packaging

1. Positioning

Product positioning is the strategic process of defining how a product should be perceived in the minds of target customers, relative to competitors, by emphasising its unique value and benefits.

It creates a clear and desirable brand impression that guides marketing and sales, helping customers understand, trust and choose the product.

A product may be positioned as:

• premium
• affordable/value-focused
• innovative/technology-driven
• convenient and time-saving
• luxury and exclusive
• environmentally or socially responsible

How positioning works

• Identify the target market: The business first decides which customer group it wants to serve.
• Analyse competitors: It looks at how rival products are already perceived (e.g., cheap vs premium, basic vs luxury).
• Choose a desired image: The firm decides what it wants to be known for — like quality, value, innovation, or convenience.
• Align the marketing mix: Price, promotion, product design, branding, and customer experience are all shaped to reinforce that image.

2. Features

Features are the specific characteristics, attributes and functions of a product that provide value to consumers.

They influence how well the product meets customer needs and help differentiate it from competing offerings.

Features may relate to:

• performance – how well the product operates or delivers its purpose
• durability – product lifespan and reliability over time
• convenience – ease of use, practicality and accessibility
• technology – innovation, functionality and technical capability
• style and design – appearance, aesthetics and user appeal

3. Branding

Branding involves creating a distinctive identity for a product or business so it can be easily recognised and remembered by customers.

4. Packaging

Packaging refers to the materials, structure and visual design used to protect, present and promote a product.

It is often the first physical contact consumers have with a product and plays a major role in shaping perceptions of quality and brand identity.

Packaging performs both functional and promotional roles, including:

• Safety & protection – prevents damage, contamination and spoilage
• Convenience – supports storage, transport and ease of use
• Sustainability – influences environmental impact and recyclability
• Visibility – attracts attention at the point-of-sale
• Brand communication – conveys brand identity and positioning

Businesses select pricing strategies based on their objectives — for example, market entry, profit maximisation, competitive response, brand image or long-term growth.

In this course, four key pricing strategies are examined:

1) Price Skimming
2) Penetration Pricing
3) Psychological Pricing
4) Premium / Prestige Pricing

1. Price Skimming

Price skimming is a strategy where a business launches a new or innovative product at a high initial price to maximise revenue from early adopters, before gradually lowering the price over time to attract broader market segments.

It is commonly used when a product is unique, technology-driven or faces limited competition at launch.

2. Penetration Pricing

Penetration pricing involves setting a low initial price when launching a product in order to rapidly attract customers, increase market share and discourage competitors.

Once demand and loyalty grow, the business may gradually increase prices.

Examples

• New food delivery platforms entering a city → offering discounted delivery fees or first-order specials to quickly attract users
• Budget airlines launching new routes → setting very low introductory airfares to build passenger numbers before increasing prices
• New telecommunications providers → offering heavily discounted mobile or data plans to win customers from established competitors
• Streaming platforms such as Disney+ at launch → entering the market at a lower monthly price than existing services to build rapid subscriber growth

3. Psychological Pricing

Psychological pricing refers to pricing techniques designed to influence customer perception rather than simply reflect cost or value.

The aim is to make the price appear more attractive or affordable, even where the difference is minimal.

Common techniques include:

• “Charm pricing” — e.g., $9.99 instead of $10.00
• Price anchoring — showing a higher price first
• Bundling — combining products for perceived savings

Examples

• Supermarkets pricing products at $4.99 instead of $5.00 → making the price appear noticeably cheaper even though the difference is minimal
• McDonald’s and Hungry Jack’s bundle deals → to signal affordability and value
• Retail fashion stores promoting “Was $129 — Now $89” → anchoring the higher price so the discount feels more significant
• Cinema combo deals (e.g., popcorn + drink package) → customers perceive bundled value rather than evaluating each item separately
• Apple pricing apps at $1.49 or $9.99 in app stores → keeping the price just below a whole-dollar threshold to encourage impulse spending
• Furniture and appliance stores promoting ‘interest-free for 24 months’ → shifting focus away from total price toward small repayments

4. Premium / Prestige Pricing

Premium or prestige pricing sets prices deliberately higher than competitors to reinforce an image of exclusivity, luxury, status or superior quality.

Consumers pay more because they value brand reputation, craftsmanship, status signalling or perceived excellence.

Examples

• Fine-dining venues such as upscale Perth CBD restaurants
• Luxury fashion boutiques in Claremont Quarter and Perth city
• High-end hotel accommodation at Crown Towers Perth

It concerns how, where and through which intermediaries a business delivers goods and services to the market. Effective distribution ensures products are accessible, convenient to purchase and available where the target market shops or operates.

Place strategy includes decisions about:

1) direct distribution
2) indirect distribution
3) location (including online “virtual location”)

1. Direct Distribution

Direct distribution occurs when a business sells its products or services straight to consumers, without using intermediaries such as wholesalers, distributors or retailers.

Direct channels may include:

• online stores – customers purchase directly through the business website or app
• company-owned retail stores or showrooms – the business operates its own outlets
• factory outlets – products sold directly from the manufacturer
• direct service delivery – services provided straight to the customer (e.g., trades, consulting, hospitality)

Examples

• Cafés, restaurants and service businesses selling directly to customers
• Businesses selling through their own websites or apps
• Local producers selling through markets and pop-ups

2. Indirect Distribution

Indirect distribution involves using intermediaries—such as wholesalers or retailers—to deliver products from the producer to the final consumer.

This approach is common for mass-market, convenience and consumer goods.

Examples

• Consumer goods sold through Woolworths, Coles, Chemist Warehouse, David Jones or Myer
• Electronics brands such as Samsung and Sony → sold through JB Hi-Fi, Harvey Norman and The Good Guys
• Clothing and footwear brands such as Nike and Adidas → stocked through department stores and sports retailers such as JD Sports

3. Location

Location refers to the physical or online site where a business operates or sells its products.

Traditionally this meant retail stores, offices or service premises. However, online platforms now function as a “virtual location,” allowing customers to access products digitally rather than through a physical store.

Its purpose is to increase awareness, shape customer attitudes and encourage purchasing behaviour, while reinforcing the business’s desired brand image.

In this course, the key promotional methods studied are:

1) Advertising
2) Publicity
3) Sales Promotion
4) Personal Selling
5) Viral Marketing

1. Advertising

Advertising is paid, non-personal communication through mass or targeted media, designed to inform and persuade consumers about a product, service or brand.

Common forms of advertising include:

• television advertising
• radio advertising
• print media (newspapers and magazines)
• online and digital advertising (websites, apps, search engines)
• social media advertising (paid sponsored content)
• outdoor advertising (billboards, bus shelters, transit ads)
• cinema advertising

Examples

• Perth Zoo digital and billboard advertising → encouraging family visits and seasonal events
• HBF health insurance radio and online ads → targeting WA members with healthcare messaging
• Mineral Resources and BHP recruitment advertising → promoting careers in WA mining
• Perth Festival promotional trailers and social media ads → building awareness for cultural events
• UWA and Curtin advertising during Open Day periods → attracting new students
• McDonald’s nationwide advertising → promoting limited-time deals and brand themes

2. Publicity

Publicity refers to unpaid media coverage or public exposure gained through news stories, community events, PR activity or social discussion.

Unlike advertising, publicity is not directly paid for and is often perceived as more credible.

Examples

• A new café featured in a lifestyle article → unpaid exposure drives curiosity
• Fremantle Markets on a TV travel segment → boosts tourism
• A WA start-up winning an innovation award → credibility rises through independent coverage
• A winery reviewed positively → attracts visitors without paid advertising
• Big brands gaining media attention through major announcements → free exposure driven by interest

3. Sales Promotion

Sales promotion refers to short-term incentives designed to stimulate immediate purchasing or trial of a product or service.

These promotions add temporary value or urgency, encouraging customers to buy sooner than they otherwise might.

Common forms include:

• discounts and specials
• coupons and vouchers
• buy-one-get-one offers (BOGO deals)
• loyalty and reward programs
• free samples and demonstrations
• competitions and prize draws
• limited-time offers and flash sales

Examples

• Coles and Woolworths weekly catalogue specials → “½ price this week only”
• Boost Juice loyalty programs → points toward free drinks
• Hoyts “cheap day” tickets → fills quieter sessions
• Early-bird pricing for events → rewards buying early
• Gym trial deals → limited-time offers to attract new members

4. Personal Selling

Personal selling involves direct, one-to-one communication between a sales representative and a potential customer.

It is commonly used for high-value, technical or customised products.

5. Viral Marketing

Viral marketing involves creating content or campaigns that are rapidly shared across digital platforms through consumer networks, generating exponential exposure.

In service-based industries especially, staff performance has a direct impact on customer experience, brand image and loyalty. Friendly, capable staff make customers feel valued — while poor service can quickly damage reputation.

A key element of People strategy is training and customer service within Customer Relationship Management (CRM) — the systems and processes used to build long-term relationships with customers.

Training and Customer Service as Part of CRM

Training prepares employees for real customer interactions, not just basic tasks. It teaches staff how to handle enquiries, complaints, refunds and service problems, while ensuring they follow consistent service standards. This means customers receive the same level of service regardless of which staff member is on duty.

Customer Relationship Management (CRM) systems support this training by storing customer information such as purchase history, preferences, past issues and follow-up notes. This allows staff to respond quickly and accurately without asking customers to repeat information.

When training and CRM work together, customer service becomes faster, more personal and more reliable. For example, a medical clinic can follow up after appointments, a gym can track membership issues and renewals, and a hotel can record guest preferences. This improves customer satisfaction, reduces repeated problems and increases the likelihood of repeat business.

They determine how the service is produced, delivered and experienced — from the first enquiry through to after-sales support.

Processes include things like:

• booking systems – how customers make appointments or reservations
• ordering steps – how customers place an order or request a service
• payment processes – how payments are made (online, card, invoicing etc.)
• complaint handling procedures – how issues are resolved
• service timing and scheduling – when and how fast service is delivered
• communication methods – emails, reminders, updates and follow-ups

These elements influence confidence, trust, professionalism and brand positioning, especially in service-based industries where the product is less tangible.

Main inclusions of physical evidence:

1) signage
2) webpage / online presence
3) staff uniform
4) overall physical environment (layout, décor, cleanliness, ambience)

1. Physical Environment / Presence

Physical presence refers to the appearance and atmosphere of the business premises, including layout, décor, cleanliness, lighting, ambience and facilities available to customers.

A professional, well-maintained environment signals credibility, quality and brand identity, while a poorly presented space reduces perceived value.

2. Signage

Signage includes all branded visual displays, such as shopfront signs, internal signs, menus, digital screens, vehicle signage and way-finding displays.

It supports recognition, communication and navigation.

3. Webpage / Online Presence

A business webpage functions as the digital storefront — often forming the primary customer experience.

Website layout, usability, content, branding and functionality strongly influence credibility and perception of professionalism.

4. Staff Uniform

Uniforms are a visible element of physical evidence that communicate professionalism, role clarity and brand cohesion.

They help customers easily identify staff and contribute to brand presentation.