wardell books

Product Strategy

The marketing potential of your products may seem fairly obvious. After all, they are the reason your customers come to you in the first place. Many business owners forget, however, that their products are more than the mere contents of a box. From a marketing perspective, your products include everything your customers receive in return for their money. This includes:

  1. Your basic products and services.
  2. The packaging they are sold in.
  3. The warranties or guarantees that back them up.
  4. Any additional services such as installation or maintenance.

1. Your Basic Products and Services

Design — Begin by considering your products main features as they relate to the benefits they provide to your customers. How well do they fulfill your customers’ needs and how often are they updated?

If your business is positioned as “cutting edge,” you'll probably want to upgrade your products on a regular basis. In the computer software industry, for example, product features must be upgraded continuously.

If your product design is completely unique, you may be tempted to rest on your success. After all, why mess with a good thing? The problem is, if it's that good of an idea, you'll have competition before long.

Customer-Centric Product Design

We have all heard the phrase “The customer is always right.” There are some situations where that is more true than others, but when we are talking about the design of your products, it's fundamentally important – especially when you have clearly identified your customer. Your customers can be your best source of design information. When designing or revising products, it's important to be responding to customer wants and needs above all else.

The basic steps involved in designing your products with your customer in mind are:

Step 1 – Put together a team that includes all relevant departments. These may include sales, marketing, research and development, operations, even finance.

Step 2 – Define the right customer. Earlier, we spoke about your Target Market, and your ideal customer. In this case, customer selection is based on use. Identify key customers that are necessary to obtain a clear image of your customer as a whole in terms of product use. It can be tempting to focus too much on your biggest and best customer, especially if they are the ones requesting the new or revised product. While they will put you on the right track, they may not have fully defined the problem, and getting a broader understanding of your customers’ needs may give you a clearer picture of the information you need.

Step 3 – Identify the end user. For product design, you want to get to the end user of your product which is sometimes different than the person making the actual purchase.

Step 4 – Visit your customers. Take your team to visit your actual customers. Focus in on the end user no matter how insignificant they may seem. Visiting customers may be time consuming, but it will yield high return on the time invested, especially during the early stages of product design.

Step 4 – Clearly define the problem(s) you are trying to solve for your customer. Since you have visited a fair cross section of your end users, you'll be able to do more than just address some of the problems for some of your customers. Be careful not to oversimplify the problem(s) that your product hopes to fill for your customers.

Step 5 – Test your product design on your actual customers and end users. At this point, you'll have invested a decent amount of time and effort making sure that you are delivering a product that your customers will want. Go the last mile, and make sure that you have something that your customers are willing to pay for.

Let’s take a medical equipment manufacturer that specializes in chemical testing equipment as an example. They have the following main Target Market segments (classified by the ways in which they use the products)

  • Large hospitals with laboratory capabilities
  • Independent testing laboratories
  • Research laboratories

Within each market segment, there are the following key employees regarding chemical testing equipment, in terms of sales efforts:

  • Doctors
  • Nurse
  • Lab technicians
  • Lab supervisors
  • Purchasers
  • Administrative staff
  • Research scientists
  • CFO

However, since the business is seeking to visit clients for purposes of product development and not sales, the end user of the product should be identified. In this case there are only two actual end users:

  • Lab technicians
  • Lab supervisors

So, to get an accurate picture, the two end users from each market segment should be visited, making the overall customer visitation process a lot more manageable as opposed to visiting all the key employees involved in the purchase of the product.

Generally speaking, three to five visits per function across all major segments is probably adequate to represent each function and give a good overall picture of product use by the customer.

Quality — Product quality also supports your marketing position. Be sure your level of quality sends the right message to your customers. If your business is a high-end restaurant, for example, you'd be wise to use only the finest and freshest ingredients in your meals.

Style — Style is also important. What does your product:

  • Look like?
  • Sound like?
  • Smell like?
  • Taste like?
  • Feel like?

Apple Computers, for example, had enormous success with their introduction of a brightly coloured, stylized computer into a market of mostly white, angular computers.

How should your basic products and services reflect your Market Position?

2. Packaging

Robert de Graff, a reprint publisher, decided to launch a 25-cent line of 10 different “pocket books.” Although bookstores were not excited about the new 25-cent line, Robert sold 1.5 million copies the first year. In 1941 his sales manager convinced four major magazine distributors to take his line, and soon after, 600 wholesalers wanted them. “Pocket books,” or paperbacks, sold 9 million copies in 1941 and 33 million copies in 1943. Today, paperback sales far outsell the hard covers.

There are two components to packaging. These are product presentation and product arrangement.

Product presentation — This concerns the way a product is presented to the customer. For example, is it put into a container? If so, what kind of container? What colour, shape and size is it? Can you see through it? In the case of certain beverages, for example, this is so important that many manufacturers actually spend more on the package than they do on the drink itself.

Product arrangement — This concerns the arrangement of the product when it is sold. For example, the number that are sold at a time (i.e. packages of 10) or the combination of products sold together (i.e. a garden hose packaged with a spray nozzle).

If you have a service business, the question is similar. How do you bundle your services? Do you sell time (i.e. hourly, weekly or monthly rates) or volume (i.e. by the project)? If you run an amusement park, do you offer a family package or an annual pass?

How should your packaging reflect your Market Position?

3. Guarantees and Warranties

You may wish to bundle a guarantee along with your products or services. While we have already touched on the value of a good guarantee, it bears repeating here. If you have positioned your business on quality, reliability, or confidence, you may want to consider an appropriate warranty or guarantee to support it. An excellent example of the successful use of this strategy is the Midas guarantee. Once you buy a muffler from them, they guarantee it for as long as you own your vehicle. An outstanding guarantee can add tremendous value to your products and services and may even support a higher asking price.

How might your guarantee reflect your Market Position?

4. Additional Services

What additional services do you offer along with your main products or services? The two basic categories are installation and maintenance.

Installation — This is commonly bundled with products that are difficult for the customer to install because of complexity (i.e. car stereos), size (i.e. refrigerators), or both (i.e. furnaces).

Maintenance — This is commonly bundled with more expensive products that require upkeep such as automobiles or large photocopiers.

How should your additional services reflect your Market Position?

The goal of your Product Strategy is to satisfy all of your customers' needs relating to your products or services. How can you make use of your products and services as marketing tools? Consider your notes above and write your Product Strategy below.