Your Product Strategy is all about knowing what to sell!
The best way to ensure that you have a high-level product marketing strategy in place for development and business growth is to embrace the concept of regularly reviewing your product and service range with your target customers in mind.
You can find detailed information about defining your target market and creating your target audience here in our blog “Why Target Marketing Strategies are Critical to Your Business Success”. If you have already defined your target market(s) and you are looking for more information about taking your product to market, you can read all about that in our Marketing Channels blog.
Products and Services
This is quite likely the most straightforward of all of the concepts that I am covering in the Marketing Strategy series. However, I find that with a structured approach the final decisions can have a significant positive impact on sales and profits.
What is your Product and Service Range?
In marketing when we talk ‘range offering’ and ‘product and services mix’ we are simply talking about the complete range of products and services that you make available to your target market.
Range Definition versus Range Review
The steps that I have outlined below apply to both existing business operators and those in the start-up phase.
Existing business operators will already have a range of great products or services and therefore will complete a product range review.
Business operators in that most exciting start-up phase will quite often be at the point of defining their optimum range of products and services. They are in the beginning stages of getting ready to market a product.
Reviewing and Defining your Product and Services Mix
I have summarised what I consider to be the most logical approach to reviewing and defining your product and services mix, namely:
- Competitor and Allied Industries Review
- Customer Needs Review and Gap Analysis
- Range Rationalisation Decisions
- Range Expansion and Innovation Decisions
- Continuous Innovation Program
Naturally, the approach taken to these steps will vary depending on if you are an existing business or if you are in startup mode.
Critical Steps in Reviewing and Defining your Product and Services Mix
Step 1 – Competitor and Allied Industries Review
Identifying what is out there through market research and what your customers are being exposed to.
Take a look at the competitors in your industry and determine what is already out there in your marketplace and ask yourself some questions including:
- What do my customers need or want?
- What do my customers currently buy from me?
- What do my customers currently buy elsewhere?
- What do my customers ask for on a regular or semi-regular basis?
- Do I have enough products or services?
- Is my product and service range too narrow or limited?
- Do I need to add innovation to my range?
- What new products or services do I need to add to my range?
- What are my competitors offering?
- What innovations or trends are evident in your marketplace?
- What mistakes are being made out there in the marketplace?
Step 2 – Customer Needs Review and Gap Analysis
Identifying how you can better satisfy your customers
Previously in the marketing strategy series, I have written about the different stages of the marketing planning process and highlighted some research and investigation points that help you identify the needs of your customer groups. You can find the detailed process of how to conduct this research in our blog “Brand Positioning: How To Make The Right Impression Immediately!”
Questions to ask yourself include:
- What innovations have I identified that I should consider making available to my customers?
- What products or services should I consider removing from my range offering because they are no longer current, in demand or a strategic fit with my desired brand positioning?
- What products/services should I keep but require modification to better service the needs of my customers?
Step 3 – Range Rationalisation Decisions
Deciding what to let go!
After Step 2 you may have made decisions to remove specific products or services from your range as part of your ongoing product strategy.
However, this decision-making process can be a difficult one as we sometimes feel that we are losing part of ourselves when we delete products and services from our range. This can lead to a delayed decision-making process or making decisions in an unplanned way, which will ultimately cost you money.
Deciding what to let go can be simplified by asking yourself these questions:
- Has the level of demand for this product or service fallen to a point where your trade customers are likely to start deletions?
- Are volumes of this product or service low enough to create inefficiencies in production, delivery or inventory management?
- Has the marketplace changed to the point where your product is out-priced or rendered obsolete?
- Is this product/service no longer profitable for you to produce or deliver?
- Do you struggle to think of good reasons for not deleting the product/service?
If these questions resulted in one or more ‘yes’ answers, then the chances are you have a candidate for deletion.
Step 4 – Range Expansion and Innovation Decisions
Deciding what to add
Deciding what to add can also be tricky. It is sometimes tempting to rush in and simply extend your range of products or add a new service when you spot an innovation in the marketplace or see a competitor having a high level of success.
The following are some questions to consider when deciding to progress a new addition to your product or service range:
- Does this product or service represent an innovation within the marketplace and does it better satisfy a vital customer need?
- Does this product or service have potential for sales and profits?
- Will this product or service be profitable even after absorbing development and product launch costs?
- Can this product or service be introduced without creating any logistic, staffing or financial problems?
- Does this product have an excellent strategic fit for my business, brand and desired brand positioning criteria?
- Will this product/service be straightforward to launch to your team and customer groups?
If you got a high proportion of ‘yes’ answers to the above, then there is a good chance that you are staring down the barrel of a new product/service opportunity.
Step 5 – Continuous Product Strategy Innovations
Keep improving your range offering.
A great way of ensuring that you keep your range offering current and of most interest to your customers is to implement a Continuous Innovation Program.
The Continuous Innovation Program is simply a scheduled meeting that you have at least once per year and up to four times per year, where you meet with key team members and outside advisors such as a professional sales and marketing team to discuss product development or deletion.
The meetings would focus on a defined agenda the objectives of which would include:
- To review available information including competitor activity, market trends and other factors impacting on product and service range decisions.
- To identify innovations that should be considered for further investigations
- To make recommendations regarding new product/service introductions and rationalisation
Your Product and Service Priorities
Many new product and service innovations and opportunities are apparent and need to be seized and implemented rapidly. So too are many tough decisions on the deletions side.
However, I have found that many of our clients are so busy dealing with their current business that they can benefit from locking in a structured approach to researching, identifying and reviewing opportunities to extend or rationalise their product and service ranges.
The suggestions that I have summarised above are not intended to stifle the creative side of product development or service offerings. But instead, offer a structured approach in this area that can foster creativity and innovation.
Like everything, we do at Baker Marketing our approach to product strategy has been developed over the last 20+ years working with small to medium enterprises, as well as in our own business. By taking a systemised approach to product management, we have been able to help many businesses re-energise their product and service offerings if you feel like your business could benefit from support in this area feel free to ask about a free product marketing consultation.
What is your product marketing strategy?
If you feel that you need help and support getting your product marketing strategy right get in contact with one of our senior marketing consultants and ask about a strategic marketing consultation for your business. Call us today on (08) 8352 3091