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IMPORTANCE OF PRODUCT POLICY


        Importance of Product Policy

      Product policy plays a vital role in the success of a marketing company. Product policy provides enormous advantages to a marketing company. The significance of product policy could be understood by the following points:

1. Product policy provides definite path to be followed by executives, engineers, production managers and sales force while taking action.

2. By an effective policy a marketing company can provide maximum satisfaction to consumers with the help of introducing products according to consumers’ needs and aspirations.

3. Mega market share could be captured and maintained through suitable product policy and strategies. By using diversification and market segmentation a marketing company can obtain good market share.

4. Suitable product policy not only provides target return on investment but also gives maximum profits to a marketing company. Marketing executives may conduct opportunity cost analysis of different existing products and future products and as a result of this exercise high-yielding products are given due priority to achieve high profits.

5. Product policy is a means to achieve responsive marketing. The marketing scene is rapidly changing due to various factors e.g. growing consumer income, changes in tastes, changing consumption pattern, reorientation of social values. With modified product policy a marketing company can effectively cope with new situations.

6. Great assistance can be provided to force and channels of distribution of a marketing company through right product policy. Unwise product policy can demotivate sales force and channels of distribution in selling company’s products.

7. Product policy can be used as a tool to boost the morale of sales-force and channels of distribution.

8. Product policy provides an effective check on wastage of resources by taking judicious decision with regard to quantity of production, quality of products, size of products, and color of products, packaging and branding of products.

9. It can provide appropriate answer to threats of competitors. Effective products policy develops differential value in the company’s products to make it superior to that of competitors.

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