Understanding product decision meaning

In marketing, the term “product decision,” especially product decision in marketing, refers to the company’s deliberate choices—big or small—about its product. The judgments made about a company’s product or service are essentially made to satisfy client demand and secure commercial success. For instance, judgments on a product’s quality, features, and appearance are product attributes. In contrast, each product makes its own choices about product features, branding, packaging, labeling, and support services.

Moreover, product decisions in marketing regarding the “marketing mix components” include decisions regarding the product, value, promotion, and appropriation channels of distribution. Such decisions on products are often argued to be the most important because they provide the best examples of marketing strategy. 

Who makes Product Decisions in a company and why is it important?

A company’s executive committee is frequently in charge of publicly making major product decisions, but another, unofficial group, headed by the CEO, appears to have true decision-making authority. Considering that product planning, also known as product discovery, is the continuous procedure of identifying and expressing market requirements that determine a product’s feature set, it is viewed as a crucial decision and a matter of corporate sustainability. Key KPIs can be used to assess the performance of the decision made by the management. A good Product decision made by the company will attract customers by fulfilling their needs.

Different levels of products

Product levels are used by sales experts to evaluate and allocate exactly how a product may satisfy the customers’ varied demands, needs, and wants. Businesses can achieve this by modifying and introducing goods that appeal to customers at various value levels or product categories. During the 1960s, the economist Philip Kotler (1) developed a model that acknowledges that customers have five categories of demands, ranging from functional or fundamental needs to emotional needs. And they are the key to understanding major product decisions

This model also acknowledges that products are only tools for meeting the various requirements and desires of customers, while also paying attention to the NEEDS, WANTS, and DEMANDS of the customer. The 5 levels are mentioned below

The 5 levels of products according to Kotler:

  • Core product benefit – is the primary requirement or need that customers satisfy by consuming the good or service. For instance, while someone is away from home, a hotel offers a bed for them to sleep in, which serves as the core benefit of the hotel (product).
  • Generic product- it is the version of the product that just has the features or qualities required in order for it to work with no extra benefits. The generic product is a stripped-down version of the item that has only the functionality it needs to operate. For example- a phone that has only calling and SMS capabilities.
  • Expected product- It is the set of attributes that customers anticipate from a product when they purchase it is known as the expected product. The collection of qualities or traits that customers often anticipate and accept when they buy a product. For example, taking the same example of a mobile phone- one can expect a camera and internet capabilities while buying a phone.
  • Augmented Product- The incorporation of extra features, advantages, qualities, or associated services helps to set the product apart from those of its adversaries. These goods offer extra features, advantages, qualities, or associated technology benefits. For example, as mentioned above with the mobile phone example- the unique selling point of the device can be its large display or high-megapixel camera. 
  • Potential product- This covers all future augmentations and modifications a product might experience. A business should continue to enhance its products in order to delight as well as satisfy customers in the future in order to maintain their loyalty. For example, the phone company can pledge to make regular software updates to keep the device performance optimum.

Major Product Decisions 

Major product decisions include all aspects of the product. From how it is sourced/ manufactured; to how to reach the end customers to make a sale; everything is included in the product decision process. To make things more simplified, one can look into the “marketing mix components” used by marketers to market an existing or new product. 

The components of the 7 p’s marketing mix that are used to make major product decisions are:

  • Product: It is the product being sold/marketed (its need, use, and attributes to meet customer demands)
  • Price: It is the pricing strategy of the product that is done to provide the maximum value to the customers while minimizing manufacturing, sourcing, and marketing costs.
  • Place: this entails the selection of appropriate distribution channels to market and promotes the product to a wider audience. For Example, the product decision includes online selling, in-shop selling, or door-to-door selling of the product.
  • Promotion: It is the method by which the product is to be advertised – online, through banners, radio or TV broadcasts, etc. The aim is to reduce this cost to generate better profits.
  • People: it refers to someone involved in the business part of the company, either directly or indirectly such as manufacturers, management teams, suppliers, etc.
  • Process: it is the way (process) in Product decision by which the business operates to reach the end customer. All activities such as logistics, sourcing, transferring as well as daily work activities are included. 
  • Physical evidence: this refers to the actual setting that the customer encounters. Physical proof gives clear indications of the quality of the experience being offered by a business. Example- Product KPIs, performance KPIs, sales KPIs, etc.

Product Marketing Ethics

A company’s values depend on —

  • Honesty
  • Transparency 
  • Accountability 
  • Adherence to fair trade principles. 

This can be highlighted as a marketing tactic by using ethical marketing approaches. So in order to connect with target customers who share similar values, these businesses express their business ethics in marketing materials. All Product marketers must realize that an ethical product is one that does not hurt its customers or the environment in any way. The former involves having a detrimental effect on people’s mental health, such as by disseminating dangerous material or fostering addictive behavior. Adhering to such principles helps influence customers and attract them, thus, generating sales. Maintaining Product Marketing Ethics is the key to a successful product decision process.


To conclude, one can say that “Product decision” refers to an organization’s deliberate decisions, big or small, regarding its product. The main goals of decisions made about a company’s product or service are to satisfy customer needs and ensure financial success. For instance, item credits include decisions made about an item’s quality, features, and look. It’s interesting to note that every product has independent choices for item inclusions, marking, bundling, naming, and support services.
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