|7Ps of Marketing Mix|
|What is it||Any tangible good or an intangible service that satisfies what a customer wants.||The amount customer pays in exchange of the product or service||Refers to providing the product at a place which is convenient for consumers to access.||Various strategies applied to raise customer awareness of a product or brand, generating sales, and creating brand loyalty.|
|Why is it important||There is no point in making a product that nobody wants to buy. Successful companies first find out what the customer wants and then develop the right product.||The price of your product
is a cost to the customer and helps identify the importance of the product to
An underpriced product loses excess additional money that the customer is willing to pay for an existing product or service whereas on overpriced product result into loss of sales and revenue.
|Delivery performance is one
of the most important criteria when choosing a supplier.
Distribution channel members can provide greater efficiency in making the availability of goods to the target markets through their contacts, specialization, experience and scale of operation.
|Promotion helps increase
product awareness, product knowledge and preference, increase distribution
network, and sales.
Remember, whatever method of promotion you're using today will, sooner or later, stop working.
|Points to consider||Ensure that:
1. The product provides desired value to the customer
2. The product is a strategic fit to the company’s product portfolio. It is an addition to the existing product line or length.
3. Be cautious going too far on product quality and delay launch when the customer is happy with ordinary product.
4. Develop a mechanism to regularly check what customers think of your product, their usage pattern, their needs and wants.
|1. The price should be
competitive but not necessarily cheap.
2. It is one of the ways to position your product in the market. The more you charge, the more value or quality is expected by the customer.
3. Consider the pricing objectives of the product, be it market penetration, company growth, survival or profit maximization, and offer the product at a price suitable to the objective and has market acceptance.
|1. The means of product or
service distribution should be appropriate and convenient to the customer.
2. The product must be available to the customer at the right place, at the right time and with the right quality keep costs within acceptable level.
3. Distribution strategy for the product should be properly designed considering various channel design, channel mix, channel management etc.
|1. Promotion should
communicate on the benefits that a customer obtains by use of the product and
not just the features of the product.
2. Whether the promotional material is a leaflet or complex brochure, it must attract the customers. It should be easy to read and communicate WHY they should buy the product.
3. Ensure that internal stakeholders are aware of the value and attributes of the product so that they can re-share with the customers.
|What is it||Everyone who contributes to the product development. It includes each member of the cross-functional team.||The processes and systems within the organization that affect the delivery of product and / or execution of service||The evidence which shows that a service was performed, such as the delivery packaging for the item delivered by a delivery service|
|Why is it important||Customers make judgments
about product delivery and support based on the people representing your
Having the right people is essential because they are as much a part of your business offering as the products/services you are offering.
|Process is the way in which a service is delivered to the end customer. Companies thrive on their quick service and the reason they can do that is their confidence in their processes.||The intangibility
associated with the service makes it risky business to be chosen for use.
Physical evidence helps potential customer “see” what they are buying.
|Points to consider||1. All members of the team
should must be appropriately trained, well motivated, and have the right
2. The entire customer facing staff should not only be properly trained, but also be the right kind of people for the job.
3. The support person becomes very critical to the consumer of the product once it is sold, even more important than price in case of product lock-in situation.
4. Consider undergoing accreditation for the staff to show your team better than the rest.
|1. All process should be
customer centric. Remember, the processes are designed to ease customer
interaction with the company or usage of the product.
2. Product / service should be supported by clearly defined and efficient processes for leads, delivery, support and maintenance.
3. Have a product / service blue print providing details of the product / service delivery process, often going down to even define the lead generation / service script and the greeting phrases to be used by the service staff.
|1. Physical evidence
demonstrated by the company must confirm the assumptions of the
2. Physical evidence should match the actual product to be purchased by the customer.
3. Consider using physical evidence to use as a differentiator in service marketing.
Wednesday, September 10, 2014
You've made a great product. You've defined your market segment, crafted compelling positioning ensuring competitive advantage, and identified perfect pricing strategy for the product in a clear and relevant way. And now you are ready to take the product to the market.
Ahhh…. You realize that the marketing plan is built around a traditional guide with a bunch of conventional methods risking the product launch, a critical time for any company, the success of which can determine your product’s survival. And now you want to carefully examine the marketing plan of your product one last time for marketing mix to ensure success of the product.
Each "P" of marketing mix is a key to success. None of them can be considered in isolation. Though the last 2 Ps, i.e. Process and Physical Evidence are important for service marketing, they are of equal importance to products that requires customer lock-in before being produced. Examples are apartments built by real-estate firms, expensive industrial grade machines that require an upfront booking amount or product that are delivered with the service.
An effective marketing strategy must be designed by doing a detailed investigation of the market and segments. This is followed by a marketing audit by conducting PESTEL analysis, various trends and company’s own position and its resources. A marketing plan is then developed by defining budget, objectives, targets and other KRAs. The marketing plan for new product launch should be evaluated against the “points to consider” items and modified accordingly. The marketing strategy should be then finalized with a specific plan of action, only to be constantly monitored and updated as the marketing campaign progresses.
It’s your turn:
What do you think? How do you ensure that the marketing plan designed is suitable to the new product? Share your experience in the comments box below
Wednesday, August 27, 2014
A few days ago, I posted a blog on Stage-gate model that received lot of comments for suitability of the model to use in today’s world where companies are under pressure to roll-out new products in shortest possible time-frame and constrained budgets.
While Stage-gate model has proved to be successful and highly evolved model with 70%-80% companies using it for new product development, it has also been criticized for being too linear, rigid and planned as well as being non-adaptive. Product Managers are looking for more agile, flexible and dynamic processes that put something in front of the customers and involve them in early stages of new product development. The idea is to get something out to the customers in the form of “virtual product” or “crude working model” that they can feel, use and respond to providing useful insights for product under development. Thus, the product might be less than half defined while entering development stage, but it evolves by adapting to new information and moved through development and testing. This change to stage-gate model is what people know as “Agile Product Management”.
AGILE PRODUCT MANAGEMENT is a product development approach that adds to Stage-gate model and reduces development time by eliminating undesired dependencies, incorporating customer involvement in early stages of the product thereby reducing the chances of product failure at launch.
|Agile Product Management|
Agile Product Management allows early kick-off for the development stage (Stage 3) of the NPD process once identification of the CVP (Customer Value Proposition) is completed in scoping stage with the intention to develop something that the customer can see and provide feedback. It does not require Product Managers to finish writing down Product Requirement Document enlisting detailed feature set or wait for other departments to finish on their tasks. Rather, it allows them to efficiently manage cross-functional teams working in parallel on tasks of their domain.
While rest of the cross-functional team works toward other activities of “scoping” and “business case” stages (market sizing, P&L projection, GTM plan and more), product manager creates the story-board and requirements for first (maybe few more) sprint cycle for the product development. While technical team completes initial sprints, the product requirements are completely identified; TG2 gate is qualified, and product comes to visible and usable form. At this juncture, QA team is involved in testing the product and analyzes the suitability with the original value proposition.
Once the product comes to a usable form after few cycles of QA testing, customers are involved for early stage testing and feedback to ensure adherence to market requirements. Please mind that these customers are not open-market customers but the internal customers from cross-functional groups, other employees in the organization, friends and family members.
It is very likely that the final product that is launched to the market is very different from what was targeted at the beginning of first sprint. It is primarily because, over the time, more features are added; more changes are done as recommendation from the work of cross-functional teams for “scoping” and “business case” stages are incorporated.
Some of the benefits of using Agile Product Development process are:
- Reduced time to market
- Reduced uncertainty and chances of launch failure
- Eliminate undesired dependencies among cross-functional groups
- Early customer feedback
- Deliver as fast as possible
Most efficient way to use Agile Product Development is to customize the development and testing stage to progress in concurrence with “scoping” and “business case” stage and best fit for the project goal. The sprints should be planned to achieve maximum value from the product in early stages of development. This will ensure delivering a stable and maintainable product that satisfies your customer.
Wednesday, August 20, 2014
New Product Development: is an organizational process that includes set of activities required to deliver a new product to the market identified on the basis of perception of market opportunity. Each organization has its own new product development process and they make changes to it over the time learning from experience and adapting to market standards. However, all of them typically follow stage-gate model. According to several independent research studies (i.e. Product Development & Management Association, AMR Research, Booz-Allen Hamilton, etc.) between 70-85% of leading U.S. companies now use Stage-Gate to drive new products to market.
According to the official site of stage-gate model, “Stage-Gate® is a value-creating business process and risk model designed to quickly and profitably transform an organization's best new ideas into winning new products. When embraced by organizations, it creates a culture of product innovation excellence - product leadership, accountability, high-performance teams, customer and market focus, robust solutions, alignment, discipline, speed and quality.”
How it works:
Stage-Gate System is a conceptual and operational road map for moving a new-product development from idea to launch. It is a product management technique in which any product development process is divided into various stages separated by gates.
Each stage consists of a set of activities and has to quality corresponding gate to start with the activities of the next stage. The gates serve as quality-control checkpoints with three goals: ensure quality of execution, evaluate the business rationale, and approve the project plan and resources. At each gate, the decision to continue product development is taken by the manager or steering committee based on the analysis done till that stage or information available at the time. The process is iterative in nature and product manager can switch to any of the previous stages in case of failure to qualify through appropriate gate.
Now, let’s discuss each stage-gate of new product development in detail.
Stage 0: Idea Discovery:
New ideas are be generated by using multiple approaches like:
- Conducting marketing research to find out the consumers' needs and wants.
- Inviting suggestions from employees, consumers, vendors and partners.
- Brainstorming suggestions for new-product ideas.
- Tracking global trends by searching in different markets viz., national and international markets.
- Exploring disruptive innovations to create new products.
- Tracking competitors for new products.
Ideas are screened for its uniqueness, market perception, and competitive scenario to qualify Gate0.
Stage 1: Scoping:
In this stage, the gap analysis is done between customer needs and available solutions. Once a gap is identified between customer needs and existing products, a customer value proposition (CVP) is drafted. During this time, the product manager conducts surveys and interviews with existing and potential customers, along with staff members. This stage also lets product manager initiate discussion with the vendor to establish a strategic collaboration for the product development, support and launch. The Scoping stage is concluded by preparing the market requirement document to qualify Gate 1.
To qualify Gate 1, product manager ensures a rock-solid customer value proposition, suitable time to market estimation and seek vendor support to continue product development.
Stage 2: Business Case
This is the last phase of concept development where it is crucial for product manager to perform a solid analysis before they begin developing the product. This phase is generally difficult, complex, and resource-intensive. To begin with this stage, product definition and analysis are carried out by using the gap analysis, market research to determine the market size and segmentation, growth rate followed by competitive analysis. This will not only help you build a great product, but will also help in determining how and where to launch your new product.
Next, a technically feasible product concept is prepared, often called PoC (Proof of concept). Once the technical feasibility is established, the prototypes are developed and presented to staff and customers to gain feedback and gauge customer reaction. An analysis of production and operations cost along with the market and launch cost analysis is also carried out in-parallel to PoC testing.
On completing the technical feasibility test, a business case document for the product is prepared. This document set consists of:
- Market sizing and penetration,
- P&L statement,
- Product Requirement Note (PRD),
- Legal and Regulatory Requirements,
- Safety and Other Considerations, and
- Project Plan highlighting tasks lists with timelines, risk analysis and mitigation plan, resources required and cost involved.
Stage 3: Development
Essentially the execution stage of the product development, the most preferred process used is an Agile methodology wherein the product manager shares user stories with the project managers who specifies the product to be developed by the development team. The development team maps out a realistic timeline with specific milestones that are described as SMART: specific, measurable, actionable, realistic, and time-bound. In the development phase, the product builds momentum as more resources are committed to the project and makes full use of cross-functional teamwork as the marketing, technical, manufacturing, and sales departments all come together to offer their expert opinions.
The criteria to pass gate 3 are quality of work, adhering to development timeline, product consistency with the original definition of the product, and accepted maintenance cost of the product.
Stage 4: Testing and Validation
This phase provides validation for the product under development. A long list of tests is carried out to validate the product including at least:
- White box & Black box testing
- Regression and Performance testing
- User acceptance testing
- Functional & Non-functional testing
- Alpha Testing
- Beta testing
The gate 4 is the final gate and opens the door for full commercialization, i.e. market launch and full production of the product. Criteria for passing gate 4 largely focus on test results, user experience, organizational readiness for the product, and GTM execution.
Stage 5: Launch
Stage 5 involves execution of GTM (Go-to-market) strategy and the operational plan. Industrial set-up for mass production of the product is done, the distribution channel is established and the selling begins.
Post-launching the product, the product review plan is executed focusing on the product performance measured mainly in terms of market share, growth rate and profitability. A debriefing document is prepared periodically and the product is customized or modified to adapt market requirements and feedback.
The entire new product development process is an ever evolving platform where product managers and entire organization learns from errors, design mistakes, losses. Having the entire team working in close synchronization will ensure creating and launching successful products. Productivity during product development can be achieved if, and only if, goals are clearly defined along the way and each process has contingencies clearly outlined on paper.