Delivering the right products or services at the right cost with strong marketing support will ensure you’re competitive. To stay in the game, you’ll need to keep your offer fresh – which means refining your products in line with trends in your market and emerging technology.
In an ideal world, you would use market research to find out what your customers want and then design products to suit them.
In reality, product management starts with existing products, and you have to improve on them with limited cash, skills and technological resources. But the principle still applies – good product marketing looks for ways to adapt and promote products to match customer requirements.
Product features, design and quality can all be tailored to the needs of your target market. So too can its image and the customer service that you provide.
Simply meeting customer needs is not enough – you also need to make sure they pick you ahead of your competitors.
You could focus on quality, reliability and customer service to position your product as a premium offering that’s better than the competition. Customising products and services for individual customers will also make you seem unique.
A tight focus on the different customer segments you’re targeting can help you identify opportunities to differentiate effectively. Products targeted in this way – such as car insurance specifically for women – can give you a competitive edge, even if the product itself has few specific features.
Product life cycles
Successful products don’t often stay at the top for long. What usually happens is that they follow a life cycle, from introduction to the point where they are overtaken by newer, better alternatives. If you understand where your product is in its life cycle, you can market it in a way that will maximise sales.
When you introduce a product, for example, you need to invest in promotion to build awareness (such as free samples) and target your marketing at people who influence others to buy.
As the product’s popularity grows, sales will increase and your unit costs will go down. But competitors will emerge to grab a share of the profits to be made. Your marketing objective will now be to maintain and increase your market share – for example, by improving your offer and making it more widely available.
Your sales will peak and competition will heat up as the product reaches maturity. At this point, stressing the way your offer differs from your rivals’ can help you maintain margins and market share.
Finally, sales will fall as new products emerge. At this stage, you should focus on controlling costs and boosting efficiency.
New product development
To keep up with your customers – and your rivals – you will need to ensure you have a steady flow of new products.
If you’re aiming to be the first to market with new products, you’ll need to invest heavily in innovation. This is a high-cost, high-risk strategy, but the payoff can be immense – especially if you patent your invention.
Being second to market is the best strategy if you’re a smaller firm with fewer resources. Costs and risks are lower, and you need to focus more on differentiation than innovation to tap into a growing market.
Finally, you should aim for a product mix that fits your overall marketing strategy and helps you maximise sales to your existing customer base. For example, if you sell products which customers purchase infrequently (such as IT equipment), you could think about diversifying into related products or services that will bring them back more often (such as consumables, IT support or service contracts).