Strategic Marketing Strategic Marketing Product Strategy Session II.

Strategic MarketingStrategic Marketing

Product Strategy

Session II

What Is Product Strategy?What Is Product Strategy?

A strategic approach to developing, A strategic approach to developing, enhancing, products to fit the needs of enhancing, products to fit the needs of the market and;the market and;

Going about activities to maximize Going about activities to maximize sustainable sales of the product in the sustainable sales of the product in the most profitable mannermost profitable manner

Product Strategy Involves…Product Strategy Involves…

Market SegmentationMarket Segmentation Development and differentiationDevelopment and differentiation Taglines and unique selling propositionsTaglines and unique selling propositions

Overview:Overview:

DefinitionDefinition Market SegmentationMarket Segmentation Development & DifferentiationDevelopment & Differentiation Nine Ways to Build DemandNine Ways to Build Demand What Product Development and What Product Development and

Differentiation can doDifferentiation can do

SegmentationSegmentation

What are “market segments”?What are “market segments”? Why do we need to worry about Why do we need to worry about

them?them?

Differentiated Markets/SegmentsDifferentiated Markets/Segments

The five criteria are that a segment The five criteria are that a segment should be:should be:

1.1. Measurable;Measurable;

2.2. Accessible;Accessible;

3.3. Substantial;Substantial;

4.4. Unique in its response; andUnique in its response; and

5.5. Stable in behaviourStable in behaviour. .

Differentiated Markets/SegmentsDifferentiated Markets/Segments

Market differentiation/segmentation Market differentiation/segmentation allows an institution to:allows an institution to:– View a market from the customer’s point View a market from the customer’s point

of view;of view;– Exploit its strengths better by selecting Exploit its strengths better by selecting

compatible market segments;compatible market segments;– Develop more sharply focused strategies Develop more sharply focused strategies

aimed at market requirements; andaimed at market requirements; and– Identify gaps in the market that offer new Identify gaps in the market that offer new

product opportunities.product opportunities.

Modifying or DevelopingModifying or Developing New ProductsNew Products … …

Refining your existing products or Refining your existing products or developing new ones is a complex and risky developing new ones is a complex and risky under-takingunder-taking

Use a systematic process to:Use a systematic process to:– Minimize riskMinimize risk– Maximize likelihood of successMaximize likelihood of success

Use a market research and product Use a market research and product prototype prototype processprocess and then pilot-test and then pilot-test carefullycarefully

Creating Creating Demand for Demand for

our Microfinance our Microfinance Loan ProductLoan Product

Creating Demand For Creating Demand For Our Microfinance Loan ProductOur Microfinance Loan Product

9 Ways to Build Demand9 Ways to Build Demand Challenges to Rural BanksChallenges to Rural Banks Our Response to the ChallengesOur Response to the Challenges

Philip Kotler’s 9 Ways to Build Demand MatrixPhilip Kotler’s 9 Ways to Build Demand Matrix

ProductProductExistingExisting ModifiedModified NewNew

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ExistingExisting Sell more of our Sell more of our existing products to existing products to our existing types of our existing types of customerscustomers(Market Penetration)(Market Penetration)

Modify our current Modify our current products and sell more products and sell more of them to our existing of them to our existing customers customers (Product Modification)(Product Modification)

Design new Design new products that will products that will appeal to our appeal to our existing customers existing customers (New Product (New Product Development)Development)

Geographically Geographically ModifiedModified

Enter and sell our Enter and sell our products in other products in other geographic areas geographic areas (Geographic (Geographic expansion)expansion)

Offer and sell modified Offer and sell modified products to new products to new geographical marketsgeographical markets

Design new Design new products for products for prospects in new prospects in new geographic areasgeographic areas

NewNew Sell our existing Sell our existing products to new types products to new types of customers of customers (Segment Invasion)(Segment Invasion)

Offer and sell modified Offer and sell modified products to new types of products to new types of customerscustomers

Design new Design new products to sell to products to sell to new customers new customers (Diversification)(Diversification)

STRATEGY 1: EXPANSION THRU MARKET PENETRATIONSTRATEGY 1: EXPANSION THRU MARKET PENETRATION

ProductProductExisting ProductExisting Product Modified ProductModified Product New ProductNew Product

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Existing MarketExisting Market Sell more of our Sell more of our existing products to existing products to our existing types of our existing types of customerscustomers(Market Penetration)(Market Penetration)



Geographically Geographically Modified MarketModified Market




New MarketNew Market Sell our existing Sell our existing products to new types products to new types of customers of customers (Segment Invasion)(Segment Invasion)



STRATEGY 2: GEOGRAPHICAL EXPANSION USING EXISTING PRODUCT STRATEGY 2: GEOGRAPHICAL EXPANSION USING EXISTING PRODUCT TO BE OFFERED TO SIMILAR MARKET IN NEW AREASTO BE OFFERED TO SIMILAR MARKET IN NEW AREAS


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STRATEGY 3: EXPANSION USING EXISTING PRODUCT TO BE STRATEGY 3: EXPANSION USING EXISTING PRODUCT TO BE OFFERED TO NEW MARKET/S OFFERED TO NEW MARKET/S


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STRATEGY 4: EXPANSION THRU PRODUCT MODIFICATIONSTRATEGY 4: EXPANSION THRU PRODUCT MODIFICATION


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STRATEGY 5: GEOGRAPHICAL EXPANSION USING MODIFIED PRODUCTSTRATEGY 5: GEOGRAPHICAL EXPANSION USING MODIFIED PRODUCT


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STRATEGY 6: EXPANSION THRU A MODIFIED PRODUCT TO BE OFFERED STRATEGY 6: EXPANSION THRU A MODIFIED PRODUCT TO BE OFFERED TO NEW MARKET/S TO NEW MARKET/S


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STRATEGY 7: EXPANSION THRU A NEWLY DESIGNED PRODUCT TO BE STRATEGY 7: EXPANSION THRU A NEWLY DESIGNED PRODUCT TO BE OFFERED TO EXISTING MARKET OFFERED TO EXISTING MARKET


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STRATEGY 8: GEOGRAPHICAL EXPANSION UTILIZING A NEWLY STRATEGY 8: GEOGRAPHICAL EXPANSION UTILIZING A NEWLY DESIGNED PRODUCT DESIGNED PRODUCT


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STRATEGY 9: EXPANSION THRU PRODUCT DIVERSIFICATIONSTRATEGY 9: EXPANSION THRU PRODUCT DIVERSIFICATION


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Response to ChallengesResponse to Challenges

Develop a Develop a marketing-oriented marketing-oriented institution.institution.

Develop a sales Develop a sales culture within the culture within the organization.organization.

Continuing Market Continuing Market Research and Research and Product Product Development Development ActivitiesActivities

Sales Skills Sales Skills Training ProgramTraining Program

Product StrategyProduct Strategy Brands, Taglines, USP’s, Brands, Taglines, USP’s,

Benefit StatementsBenefit Statements

Session IISession II

Overview:Overview:

Brands, Taglines, USPs and BenefitBrands, Taglines, USPs and Benefit StatementsStatements

What do Customers Want?What do Customers Want? Product BrandingProduct Branding TaglinesTaglines Unique Selling PropositionsUnique Selling Propositions Benefit StatementsBenefit Statements

In most professional services, you are not In most professional services, you are not really selling expertisereally selling expertise____your expertise is your expertise is assumed, and because your prospect assumed, and because your prospect cannot intelligently evaluate your expertise cannot intelligently evaluate your expertise anyway. anyway.

Instead, you are selling a Instead, you are selling a relationshiprelationship. And . And in most cases, that is where you need the in most cases, that is where you need the most work.most work.

If you’re selling a service, If you’re selling a service, you’re selling a relationship.you’re selling a relationship.

What Is Your Bank Really Selling?What Is Your Bank Really Selling?

Check Again …Check Again …What Do Customers Want?What Do Customers Want?

What then is What then is ‘VALUE’ and how ‘VALUE’ and how would you specify it?would you specify it?

What Do Customers Want?(2)What Do Customers Want?(2)

Value is extremely subjective, but it can still Value is extremely subjective, but it can still be calculated with some exactness. be calculated with some exactness.

Value is a balance between:Value is a balance between:– A fair price, A fair price, – A quality product and A quality product and – A convenient, service oriented environmentA convenient, service oriented environment

The right combination of those factors triggers The right combination of those factors triggers the mutually beneficial exchange between the mutually beneficial exchange between buyer and seller.buyer and seller.

Where Do Our Products Lie?Where Do Our Products Lie?

Quality productConvenient, service-oriented environment

Price

… and is this in alignment with our brand?

Brand Name:Brand Name: The product’s warranty.The product’s warranty.

TaglineTagline– A short phrase that’s connected to the A short phrase that’s connected to the

product;product;– A positioning “nugget” that describes the A positioning “nugget” that describes the

way you want customers to see the productway you want customers to see the product

Ex: “ Ex: “ Dagdag Kapital- Tulong sa Kinabukasan”Dagdag Kapital- Tulong sa Kinabukasan”

“ “Pang Asenco sa Buhay”Pang Asenco sa Buhay”

Core Strategy Components

Core Strategy ComponentsCore Strategy Components

Unique Selling PropositionUnique Selling Proposition– The difference that makes the The difference that makes the

difference. difference. – Deliver a benefit that is of high value to Deliver a benefit that is of high value to

the target marketthe target market– Differentiates your product from the Differentiates your product from the

market competition market competition

Ex: “Ex: “May Loan ka na, may Promo pa”May Loan ka na, may Promo pa”

“ “ Guaranteed release in 3 days”Guaranteed release in 3 days”

Its Not the Product – Its Not the Product – It’s the BenefitIt’s the Benefit

Remember, customers don’t buy products Remember, customers don’t buy products and services; they buy and services; they buy benefits or valuebenefits or value they expect to drive from those itemsthey expect to drive from those items..

Writing Benefit Statements:Writing Benefit Statements:A Step-by-Step GuideA Step-by-Step Guide

For each product:For each product: Start with the market research findings.Start with the market research findings. Develop a list of every feature of the the Develop a list of every feature of the the

product. product. Translate, one by one, each feature into a Translate, one by one, each feature into a

very short benefit statement. Some may not very short benefit statement. Some may not translate. translate.

If one isn’t “benefitable” after reasonable If one isn’t “benefitable” after reasonable effort cross it off. Experience shows that effort cross it off. Experience shows that 90% of product features deliver benefits to 90% of product features deliver benefits to some market.some market.

Are the benefits the same for each market?Are the benefits the same for each market?

What are the What are the

Key Benefits of Your Product?Key Benefits of Your Product? The list of the benefits for the market by the The list of the benefits for the market by the

product, is the most powerful tool your product, is the most powerful tool your sales force can carry. sales force can carry.

In every customer contact, they should In every customer contact, they should deliver the full key benefit message. deliver the full key benefit message.

Each carefully crafted benefit will appeal to Each carefully crafted benefit will appeal to various clients unequally. various clients unequally.

Price may mean everything to one Price may mean everything to one customer, while availability might be the customer, while availability might be the big problem to another.big problem to another.

Strategic Marketing Strategic Marketing Product Strategy Session II.

Documents

Transcript of Strategic Marketing Strategic Marketing Product Strategy Session II.