The old view of, “telling and selling” no longer exists. It is all about “Satisfying Customer Needs Profitably and Creating Value.” Product marketing acts as the Voice of the Customer to the rest of the teams in the company and its function focuses on defining a narrow statement of the product type, customer needs, customer type, and geographic area.
Product Marketing is a very vital and broad function. Here are few important Did You Know (DYKs) I would like to share related to Product Marketing.
DYK – Product Marketing Process
- Based on market research understanding the marketplace and customer needs and wants
- Designing customer driven marketing strategy
- Constructing a marketing program to deliver superior value
- Offer products and services to build profitable relationship and create customer delight
- Capture value to create profits and customer equity
You may have by now realized that the first four steps are about creating value for customers and build customer relationships and the last step is about capture value from customers.
DYK – 4 P’s Marketing decisions are made by Product Marketing Business Unit
Marketing mix – 4Ps
- What products will be offered (i.e., the breadth and depth of the product line)?
- Who will be the target customers (i.e., the boundaries of the market segments to be served)?
- How will the products reach those (i.e., the distribution channel and are there viable possibilities that create a solid business model)?
- At what price should the products be offered?
This may differ based the product marketing function of different firms.
DYK – There is Product Market Expansion Grid
Market penetration – increase sales to current market segments without changing the product. How?
Market development – identify and develops new market segments—demo- or geographic—for current company products. How?
Product development – offer modified or new products to current market segments. How?
Product diversification – offer new products to new markets. How?
DYK – Market Segmentation, Target Marketing and Product Positioning
Marketing Mix Strategy
Market Segmentation – Market Segmentation is a process of dividing a market into distinct groups of buyers with different needs, characteristics, or behavior who might need separate products or marketing programs.
A market segment consists of consumers who respond in a similar way to a given set of marketing efforts.
Target Marketing – Target marketing is associated with evaluating each market segment’s attractiveness and selecting one or more segments to enter.
Positioning – Arranging for a product to occupy a clear, distinctive, and desirable place relative to competing products in the minds of target consumers. Promoting attributes, benefits, usage situations, or users can help to establish a product’s position in the consumer’s mind.
DYK – Product Life Cycle
In the introduction stage, the firm focuses on creating awareness and developing market for the product. The impact on the marketing mix is as follows:
- Product branding and quality level is established, and intellectual property protection such as patents and trademarks are obtained.
- Pricing may be low penetration pricing to build market share rapidly, or high skim pricing to recover development costs.
- Place/Distribution is selective until consumers show acceptance of the product.
- Promotion is aimed at innovators and early adopters. Marketing communications seeks to build product awareness and to educate potential consumers about the product.
In the growth stage, the firm seeks to build brand preference and increase market share.
- Product quality is maintained and additional features and support services may be added.
- Pricing is maintained as the firm enjoys increasing demand with little competition.
- Distribution channels are added as demand increases and customers accept the product.
- Promotion is aimed at a broader audience.
At maturity, the strong growth in sales diminishes. Competition may appear with similar products. The primary objective at this point is to defend market share while maximizing profit.
- Product features may be enhanced to differentiate the product from that of competitors.
- Pricing is low due to new competition.
- Distribution incentivized to promote preference over competing products.
- Promotion emphasizes product differentiation.
As sales decline, the firm may select one of the option below:
- Maintain the product, rejuvenating it by adding new features and finding new uses.
- Harvest the product – reduce costs and continue to offer it, possibly to a loyal niche segment.
- Discontinue the product, liquidating remaining inventory or selling it to another firm
The marketing mix decisions in the decline phase will depend on the selected strategy. For example, the product may be changed if it is being rejuvenated, or left unchanged if it is being harvested or liquidated. The price may be maintained if the product is harvested, or reduced drastically if liquidated.
I hope this information is useful to you.
… and there are many more DYKs of Product Marketing. Please reach out to me if you need more info.