The leading theoretical approach to marketing demands that you first determine what your markets want, then provide a way to satisfy them profitably. That's fine if you have the luxury of choosing your target market and product/service mix before you start a business. Most of us, though, are limited by our experience and interests, to say nothing of other limitations such as money, family obligations, and so forth.
Most products and services are generic. While you may think your products and service are special, that perception is not necessarily shared by your market. To gain a competitive advantage, do three things.
- Know your products and services better than the competition knows theirs.
- Know the benefits of your products and services from your customers' perspective.
- Know where your product stands on the "product life cycle". The position on the product life cycle affects pricing as well as sales strategies.
Understand the benefits your customers hope to get from your products or services. Look at your business from their point of view: Without a strong reason to think otherwise, one hardware store is like another; lawyers are interchangeable; seafood markets are where you buy fish. What's so special about your screwdrivers, or wills, or halibut?
People buy benefits. What they want is not necessarily what you think you are selling. They buy solutions to their problems. They buy satisfaction of needs and wants. The solutions and satisfactions are the benefits they buy along with your products or services. Benefits are the "what's in it for me?" that customers seek.
What are the benefits of your products and services?
- List all the products and services you currently sell.
- For each product or service ask: What is the purpose? What needs or wants does it satisfy for your customers? For your prospects? Write down the most obvious needs and wants. This will give you a better understanding of the markets you can reasonably target and provide the basic layer of your marketing strategy.
- For each product or service: Is it a breadwinner now, or will it be in the future? Is it past its prime? Should it be continued? Or given more support (financial, personnel, promotion)?
- Should you expand your product lines?
- What are the particular advantages/disadvantages of each product or service as compared with competitive products and services? Product/service comparisons tip you off to competitive positioning.
- Are you offering the right mix of products and services to meet your customers' demands?
- Have you made improvements in your products or services lately? Are you planning any?
- What new products or services are you planning?
- What are possible substitutes for your goods or services? Are there any new developments (technological, social, economic) that might result in new ways of satisfying your market's wants and needs?
- List five new applications for your products and/or services. Repackaged products or new applications of old products open up new marketing opportunities.
Ask questions. Ask your customers, suppliers, sales force, and other interested people what your products and services might be used for. Their answers might provide new applications that result in tomorrow's sales.
Work with these answers and ideas to rethink how your products might be marketed. For example, basketballs are used as float valves in some industrial applications. Their features of toughness, uniform size and quality, roundness, and floatability made them ideal for this purpose.
One result of product and service analysis is to help you spot competitive strengths and weaknesses in what you market.
What is the Unique Selling Proposition (USP) of your products and services?
What sets your products and services apart from the rest? For each product and service ask: Is it quality? Price? Convenience? Style? Professionalism? Ask the same questions about your store, restaurant, or office.
Your aim is to develop an image or perception in the marketplace that you offer something special. Look at competing businesses and ask what's special about them. Can those insights help you position and define your business? Every business has something special to recommend it.
You can set your products apart from the competition by looking at the following:
- New, improved products.
- Advertising and promotion
- Computer-based convenience
- Follow-up service