WHETHER you are entering a new market, launching a new product, growing market share, developing a pricing strategy or managing costs, you will want to understand the products that you are dealing with.
Here are 9 things to think about when trying to understand a product.
1. Identify the product
What is the product? What does it do?
For example, News Corporation produces newspapers, magazines, film, television and cable.
What’s special about the product? Why do people buy it? Why is it useful?
For example, News Corporation provides people with media brands that they know and trust, and media content which keeps them entertained and informed.
What are the disadvantages of the product? Are there any side-effects?
For example, MySpace is a social networking platform that caters for musicians but does not offer a community building platform which encourages trusted connections and privacy protection. Facebook and LinkedIn have done a better job of protecting user privacy and encouraging meaningful connections.
Is the product a commodity or is it a differentiated from other offerings?
For example, Fox has produced an animated sitcom known as “The Simpsons”; one of a kind.
Can we change the product?
Our ability to change a product will depend, in part, on how narrowly we define the product. If your product is “blue ball-point pens” then you will have limited ability to change the product. However, if your product is “small plastic products” then you can change the colour of the pen (red, green, purple), the type of pen (ballpoint, rollerball, fountain, felt tip) or even the type of plastic product (stapler, cigarette lighter, highlighter).
6. Legal protection
Is the product protected by copyright, trade mark, or patent?
For example, Fox has protected any information, text, files, images, video, sounds, musical works, works of authorship, applications, and any other materials or content relating to “The Simpsons” by using copyright, trademark, patent and other laws.
7. Complimentary goods
What is happening to the complimentary goods? If the market for complimentary goods is suffering, this will affect the product.
For example, if our product is the SUV Hummer and the price of petrol (gas) has doubled then that will negatively affect the value of our product in the mind of consumers.
8. Product lifecycle
Where is the product in its product lifecycle?
What does the product include?
For example, if the product is an annual hard copy newspaper subscription, does that include online access?