The product (or service) your business offers is by far the most strategic decision your organisation will make. The fact that so many businesses fail, and very few achieve longevity, suggests that most organisations don’t get their offering right.
What product (or service) does your organisation offer? This is one of the most strategic questions your business must answer. Immersed in the answer is what problem your business solves, and what market it addresses. Unless your business answers a real need and successfully targets an audience large enough to deliver a profit, the business model is simply not sustainable.
The reason why Product is the most strategic of the ‘Marketing Ps’ is because it is the very thing that your business offers to the market. It is what is core to your business. If you subscribe to the notion of a strategic driver, being product focused means that your organisation must excel in the realms of product innovation and development, sales and after-sales service. If your business does not nor cannot excel in these areas, it simply cannot be sustained.
There are numerous aspects to consider when reflecting about the product your business brings to the market, including the following:
Form & Functionality
This is the real basics of the product or service that you offer. It focuses on the need your products answers for its target audience. The inclusion of form suggests that its design must be appealing to the user.
Positioning & Differentiation
This draws attention to the market you target and how you position your product to be attractive to them. It also, most importantly, highlights the need to differentiate your offering – either on the basis of price or through features – from competitor offerings.
Disposal, assuming that you offer a physical product, is enjoying increased interest amongst consumers, particularly the younger, more earth-conscious generation. If your product includes batteries or other elements which could present danger or damage to the environment, it is important to consider disposal or recycling options for your users.
Value is exchanged at the moment(s) of use
The old version of this story is that value is exchanged at the point of purchase. This is not longer the thinking. Today, it is about understanding that value is exchanged when, and only when, the user makes use of your product. If you sell heaters, and your customer purchases one in a spring sale, the value of the product will only be derived a few months away when Winter returns. Until that point, the heater will be in a cupboard, adding no value to the user.
Products must become services
Knowing that usage is the point of value creation, the question then becomes ‘How can you add value at the point of usage?’ The answer can be found in the move from organisations away from one-off product sales to longer-term product service. The best example I can think of is Rolls Royce engines. One might imagine that these are sold as one-offs, and serviced at particular intervals. Game-changing Rolls-Royce chose a new model. Engines on aeroplanes, for example, are paid on a per-usage basis and Rolls-Royce monitors the performance of the engines through remote information mechanisms on behalf of the airliner. The relationship becomes a partnership, rather than a transaction.
It is extraordinarily challenging to maintain a flow of once-off customers to purchase your products. It is significantly preferential to acquire a customer and nurture them through the process of increased product usage. This entails communicating with your customer in a way that your customer invites and offering product-related value that encourages and demonstrates increased usage of – and perhaps even applications for – your product. This relational approach not only benefits the organisation through increased product usage, it opens up opportunities for cross-selling, up-selling and on-selling.
Many organisations underestimate the importance of getting their product right for their chosen market. So-called experts can design your products a million ways, but in truth, the only real experts are the customers who will ultimately use your product. There is no substitute for engaging and co-creating with them. The ultimate success of your business depends on it.
If you need help in establishing and embedding your product strategy, In2Great Consulting can help.
Contact us here, or mail us at info@in2GreatConsulting.com.