Successful companies don’t market products, they market offerings.
An offering encompasses the benefits or satisfaction provided to your target markets, tangible and intangible. To successfully market your product, you must understand its benefits from the buyer’s perspective. This approach allows you to think beyond the tangible “product” entity and consider what the consumer is actually buying and their reasoning behind that purchase.
Your offering includes a tangible product or service, plus any related services, such as installation, warranties, guarantees, and packaging. It also includes intangible benefits, from peace of mind, to validating an identity, to showing off to the neighbors.
Focusing on the offering, rather than on the actual product or service itself, can be valuable for analyzing consumers’ alternatives, to better identify unmet needs and wants of your target markets, and to enhance development of new products or services.
In a larger sense, an organization’s offerings are a part of who they are as a business. Your marketing plan should address what types of customers you seek, what the buyers need, and how your offerings meet their needs. It should also describe how your offering is communicated and what value it holds for the consumer.
Most organizations sell more than one product. A multi-product approach often adds value, leverages economies of scale and expertise, and increases revenue generation potential. Banks offer dozens of services. Most retail stores offer hundreds of products to meet the breadth of needs of their customers. General Electric has over 200,000 products. The combined offerings of an organization is known as their offering mix.
This offering mix can be classified according to the width, length, depth, and consistency of the products. These four dimensions are the tools for developing the company’s marketing strategy and deciding which product line to grow, maintain, harvest, or divest. Strong products should be grown or maintained. Weak or unprofitable lines should be sold or discontinued.
Four basic factors are critical in the decision to manage individual product lines.
- Consumer demand
- Cost to produce
- Gross margin
- Total sales volume
When change occurs in any of these areas, you should analyze the product line and decide how many resources should be invested.
The Product Manager
The product manager often stands between the product development team and the marketing team, bringing the concepts together throughout the implementation process. Some organizations have the resources and the need to have a position dedicated to manage the one or more product lines. The role of the product manager is to develop product plans, implement them, monitor the results, and take corrective action when necessary.
The product manager’s goal is to intimately know the target markets the product or products serve and understand how these markets perceive the product. There are critical customer questions the product manger must answer:
- What needs are our customers satisfying when they buy our product?
- Why do they buy it?
- What do they consider to be viable product alternatives or substitutes?
- How do our products compare to those other potential choices?
Tasks to Achieve the Goal
The product manager’s tasks most often can be described by these activities:
- Develop an enduring competitive strategy.
- Prepare and maintain a product marketing plan with a sales forecast.
- Work with advertising and merchandising agencies to develop copy, programs and campaigns.
- Stimulate an understanding of the product and support among the sales force and distributors.
- Gather product performance data from customers, resellers, dealers and others in the sales channel regarding attitudes, new problems, and opportunities.
- Initiate product improvement to meet changing market needs.
The focus and specialization a product manager offers an organization can prove to be a valuable resource in making certain that the return on investment for each product is optimized.