This week we will look into Product or Service. Here is the marketing strategy template again, for your reference.
- Unique Sales Proposition
- Product or Service
- Promotion Goals
Product or Service
What is your product or service? You should be able to define your product in terms of what it does for the customer. How does it make the customer’s life better, easier, faster or cheaper? How will your customer’s life be improved by buying your product? What makes your product superior over every other similar product already on the market? If you can’t think of a good answer to these questions, your customer probably can’t either.
Describe, in detail, the products and services you will be selling. Your description should include a general description of each product or service, plus pricing models and distribution channels for each product or service.
Your company strengths and weaknesses will help you evaluate which opportunities are right for you and the threats to avoid. As you develop your products and service offering, keep in mind the needs, wants and desires of your target customer. You might think that the latest add-on or upgrade to a do-dad is the hottest next thing in the market, but does your customer? Many a product or service has been designed and marketed only to find that no real market exists. While the company owner spent lots of money developing marketing plans and buying advertising, if there is no real market for a product or service, that money will have been wasted.
Talk to your customers, conduct focus groups or other market studies. Make sure that your prospective customers actually want to pay money for your particular product or service. One way is to select some individuals who are in your target customer group and ask them. If the difference in color, shape, size and packaging is potentially important to the marketing effort, take the necessary time to understand these factors. If your plan is big and the risk is high, you might need to hire a market research firm to help determine which characteristics will be included in your product or service.
Make sure you understand the difference between features and benefits. A feature is a factual statement about a product or service; it’s what products have. A benefit is what those features mean; it describes why your customer should care. Theodore Levitt, a 19th Century economist and Harvard University professor described the difference like this: “People don’t want to buy a quarter-inch drill; they want a quarter-inch hole.”
Your customers only care about benefits. They are what’s in it for me kind of people. In fact, everyone is a what’s in it for me kind of person. As a manufacturer, you care about your product features; it has a little handle here, this one is blue, that button makes it fly higher, those straps keep it from falling off. As consumers, your customers only care about your product benefits; it’s easy to carry, it matches my carpet, I can feel the exhilaration, it’s safe. Just keep in mind that only you and your salespeople care about features. Your customers only care about benefits.
What will you charge for your product? Why? Will you have different pricing models for a retail environment vs. a wholesale environment? How does your price compare to that of your competitors? How does your price compare to your cost of production? What are the benefits of being cheaper than your competitors? Are there benefits to being more expensive? How will you use payment terms and customer accounts to support your sales and financial goals?
Don’t forget to think about total cost of product ownership. If the cost of your product doesn’t end with the initial purchase, your customer will certainly be considering the total cost of ownership. If your sales price is cheap but operating the product is very expensive, your customer could become dissatisfied. Think about how your price compares to the cost of owning your product.
We discussed distribution channels at length during the research section. You should understand how your industry and target market segment(s) operate. How will you get your products and services into the hands of your customers? Will you utilize your own sales force or rely on manufacturer’s reps or distributors? Analyze your choices make a decision that best serves you and your customers.
Where will you sell your product? How will you go to market? Will you sell directly to the public through a retail environment, on-line to wholesalers, or something else? Will this be a catalog or direct mail type environment?
Stay connected with us on social media and our blog. Next week we will look at strategy for promotion goals.