Your Marketing Planning Journey So Far
If you have been following the last four installments of the Baker Marketing “Marketing Summer School” your will have given consideration to the following components of your marketing strategy:
- Part 1 – An overview of your Marketing Strategy
- Part 2 – Your Primary and Secondary Target Markets
- Part 3 – Your Desired Brand Positioning
- Part 4 – Your Sales Partners and Sales Influencers
I hope the steps that I have outlined for the above marketing planning and decision making areas have been useful for you.
This week I am going to cover the concept of reviewing your product and service range.
Products and Services
This week I will strive to help you complete a review of your product and services in order to optimise your range offering to your customers.
This is quite likely the most straightforward of all of the concepts that I am covering in the Marketing Summer School. However, I find that with a structured approach the final decisions can have a significant positive impact on sales and profits.
What is your Range Offering or Product and Services Mix?
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 various customers.
Range Definition versus Range Review
The steps that I have outlined below are applicable to both existing business operators and those in start-up phase.
Existing business operators will already have a range of products or services and therefore will complete what I would consider to be 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/or services.
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 start-up mode.
Range Rationalisation versus Range Expansion
I have treated Range Rationalisation and Range Expansion as two separate steps.
The reason for this is that I believe that all business operators should regularly consider the opportunity to both delete and add products or services to their portfolio.
I have found that by treating this as one step business operators will often take a singular approach and either rationalise their range or increase it. However, the real opportunity is often to routinely do both (i.e. add and subtract products and/or services from your range).
Key Steps in Reviewing and Defining your Product and Services Mix
Step 1 – Competitor and Allied Industries Review
Identifying what is out there and what your customers are being exposed to
Take a look at 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 services 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 positive or negative factors do my competitors have in relation to my range offering?
- What innovations or trends are evident in your market place?
- What mistakes are being made out there in the marketplace?
Ask the same questions of allied industries or industries where you think there could be some learning for you regarding your customer’s preferences.
Step 2 – Customer Needs Review and Gap Analysis
Identifying how you can better satisfy your customers
In your earlier stages of the marketing planning process I have suggested that you complete some research and investigation into the needs of your customer groups.
The customer needs review and gap analysis is simply about combining your research or knowledge of customer needs with your competitor review (from Step 1 above) and looking for opportunities to better serve your customers.
Questions to ask yourself include:
- What innovations have I identified that I should consider making available to my customers (i.e. what new products/services)?
- What products/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 that require modification in order to better service the needs of my customers?
Step 3 – Range Rationalisation Decisions
Deciding what to let go
As part of Step 2 above you may have made decisions to remove certain products/services from your range offering.
However, this decision making process can be a difficult one as we sometimes feel that we are losing a part of ourselves when we delete items from our range. I have noticed that some of the business owners we work with often delay this decision or make deletions in an unplanned manner which often costs them money.
Deciding what to let go can be assisted by determining the answer to the following questions:
- Has the level of demand for this product/service fallen to a point where your trade customers are likely to start or escalate deletions in terms of their own ranging?
- Are volumes of this product/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 in terms of features and benefits resulting in poor sales outcomes?
- 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 level of success.
The following are some questions to consider when deciding to progress a new addition to your product/service range:
- Does this product/service represent an innovation within the marketplace and/or does it better satisfy an important customer need?
- Does this product/service have significant total potential in terms of sales and profits?
- Will this product/service be profitable even after absorbing development and launch costs?
- Can this product/service be introduced without creating any logistics, staffing or financial problems?
- Does this product have a good strategic fit with my business, brand and desired brand positioning criteria?
- Will this product/service be straightforward to launch/introduce to your team and/or customers 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 Innovation Program
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 can be as simple as defining a meeting schedule of between one and four meetings per year where you meet with key team members and/or outside advisors.
Meeting participants should be selected based on their ability to contribute to identifying innovations within the marketplace and providing input on the topic of new products and services.
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/service range decisions
- To identify innovations that should be considered for further investigations
- To make recommendations regarding new product/service introductions and/or rationalisation
Your Product and Service Priorities
Many new product/service innovations and opportunities are obvious 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 just 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/service ranges.
The suggestions that I have summarised above are definitely not intended to stifle the creative side of product/service development.
I believe that a structured approach in this area can foster creativity and innovation by helping business owners/operators to allocate some quality time to take a step back and view their marketplace and the many opportunities that they may be too busy to notice on a day-to-day basis.
I wish you good luck in getting your product and service priorities on track for 2014 and beyond.
Next week I cover ‘Key Communication Messages – Choosing your words carefully’.