After a while, even the most innovative product/service lines may begin to lose some of their luster and appeal, ultimately being perceived by the marketplace more as a commodity-like offering, rather than as a unique or differentiated product or service. Classic examples range anywhere from cameras, to computers, to consulting services. What was initially offered to the market as an innovative product or service, without any direct competition,can soon become just another product or service alternative among scores of increasingly competitive offerings.
It is for this reason that it is critical to understand where your organization’s service offerings stand in the perceptions of the marketplace at any given point in time. In many cases, it will be the new, innovative, “start-up” companies that are doing the bulk of the research and market testing prior to launching their new products and services, and not the companies that are still selling their older, more mature commodity-like and end-of-life offerings.
However, there may still be a great deal of life left in the more mature business lines that comprise a significant portion of your company’s product or service portfolio. Even better, these lines generally tend to be “proven” with respect to market acceptance, and may only need a gentle marketing push every once and awhile to stimulate additional market interest and sales. Even NASA uses a “mid-course correction” every now and then to ensure that its space vehicles get to their targeted destinations.
A further complication may also arise from the fact that many businesses that provide both products and services to the market often find that when sales or market share take a downturn, they are unable to determine whether the decline is more related to problems with their products, problems with their services and support, or a combination of the two. However, more often than not, it is generally a combination of the two. While this is typically a fairly easy matter to resolve, it is one that can often lead to a costly and ineffectual failure if not approached properly.
Conducting A Proper Product/Service Evaluation
Whenever a situation like this takes place, the organization should examine a number of critical areas through the execution of a carefully orchestrated research program, focusing on issues such as:
- An assessment of the changing, evolving or emerging customer/market needs, requirements, preferences, perceptions and expectations associated with its mature product/service offerings;
- The identification of specific new or value-added product features, characteristics and attributes (e.g., functionality, quality, reliability, modularity, packaging, etc.) that could redefine the mature products; and the corresponding features, characteristics and attributes that could similarly redefine the levels of service required to support these products from the customer’s perspective (i.e., professional services, Internet self-support, etc.); and
- Suggested, or recommended, improvements to the existing products and support services required to address these changing and evolving needs.
The results of a program of this nature would be extremely useful to the organization’s sales and marketing management in terms of their ultimate ability to:
- Modify and enhance the historical product and service offerings to address the changing levels of market demand and requirements;
- Project the likelihood of customers switching to new, redefined or replacement, products and services in the near- and long-term future;
- Develop a plan for migrating to new products and service offerings to reflect the evolving needs and requirements of the market;
- Identify and cultivate expanded and/or redefined target markets based on the identified patterns of “core” vs. “value-added” product/service preferences and user perceptions;
- Strengthen the overall product/service awareness and image in the marketplace through a program of heavily promoted refinements, enhancements and/or modifications based on the study findings; and
- Monitor the ongoing positioning of the product/service offering in the marketplace in order to determine when it may no longer be profitable to support it.
More specifically, the primary objectives of the organization should be to first, identify the changing customer needs, requirements, preferences, perceptions and expectations that can be used to assess and fine tune the overall strategic and market position of the company’s historical product and service lines; and second, to ensure that the company can continue to effectively market these mature products and services, with a compelling promotional spin, and to the appropriate market segments.
There are many ways in which a business can determine exactly how much “kick” its historical product or service offerings still have in them – or, conversely, whether it is time to “kick” them out of the company’s portfolio altogether, and replace them with newer, more innovative and competitive products and services.
While your present business lines are probably the key factors that have helped your company to grow to its current size and market position, they may have become “dusty” over the years, and now may be in need of either a good “dusting off” or, possibly, retirement.
Assessing where your business lines stand today in terms of market perceptions, image and their ability to meet your customers’ changing and evolving needs, will allow you to determine just how much change you need to make to compete more effectively in the future.