Product-market strategy

Vocabulary

Target – планування, мета;

implу – мати на увазі, заключати в собі, передбачати;

a chosen route – обраний шлях;

customer needs – потреби споживачів;

to achieve – досягати;

competitors – конкуренти;

to take into account – брати до уваги;

the anticipated moves – передбачувані дії, прогнозовані дії;

current – поточний;

the cost-effective manner – фінансово ефективний спосіб;

cash flow – грошові потоки;

profitability – рентабельність, прибутковість;

at the outset – спочатку;

approach – підхід;

attempt – намагатися, спробувати;

market penetration – маркетингова «проникливість»;

consumption – споживання;

celery soup – суп із селерою;

рroduct range extension – розширення асортименту товарів;

digital watches – електронні годинники;

an outline – схема, план;

critical gaps – принципові вади, недоліки;

polish – шліфувати,

threats – загрози;

capacity – місткість, ємність, компетентність, якість;

perception – сприйняття, відчуття;

revenue – витрати;

receptive – сприйнятливий, рецептивний;

on an emotional level – на емоційному рівні.

"Product-market strategy" is the term used to describe all the deci­sions which the organisation makes about its target markets and the products it offers to those markets. The use of the word 'strategy' is important, for it implies a chosen route to a defined goal and suggests long-term planning. This is quite different from 'tactical' activities which are used to achieve short-term objectives by gaining immediate results. Product-market strategy represents a decision about the current and future direction of the organisation.

The marketing concept of building an organization around the profitable satisfaction of customer needs has helped firms to achieve success in high-growth, moderately competitive markets. However, to be successful in markets in which economic growth has levelled and in which there exist many competitors who follow the marketing concept, a well-developed marketing strategy is required. Such a strategy considers a portfolio of products and takes into account the anticipated moves of competitors in the market.

Product-market strategy must be developed in the most cost-effective manner, paying attention to cash flow and profitability requirements. To minimise costs at the outset, a sound marketing approach will usually attempt to increase profits and cash flow from existing markets. The following examples can help to illustrate the total strategy at work.

Market penetration. Heinz revamped its marketing strategy to in­crease consumption of its tinned soups. This product was traditionally а winter purchase, but Heinz successfully promoted the idea of celery soup, drunk hot or cold, as a suitable summer purchase. The product attributes of celery were linked with concepts of slimming and refresh­ment on summer days.

Market development. A British hotel chain opened up a new market by offering 'Leisure Learning' weekends in its hotels.

Product range extension. A European breakfast cereal manufacturer brought out a new 'variety' pack to appeal to young children who liked the freedom of choosing a new cereal each morning.

Product development. Manufacturers of digital watches soon com­bined the watch function with an alarm component. This not only at­tracted customers who liked the novelty of the idea, but seriously threat­ened the traditional watch market.

Developing a marketing plan or strategy to introduce a new technical product

start by writing an outline of your marketing strategy. Then begin by gathering required information for each section in your outline. As you gather your market information, you may see critical gaps. Find a way to fill the gaps (e.g. telemarketing). Then polish the information with helpful tables, charts and graphs. You can even use the outline to organize your marketing presentation!

Robert Winton, American economist, created this outline to develop marketing strategies:

Customers

How many of them are there?

What are they buying?

What practical problems do they try to solve?

What emotional problems do they try to solve?

What is the size of your market?

What is your customer's price point and other economics?

Exactly what does it take to win an order?

How long does it take to win an order?

Exactly how do customers use competitive products?

What's the current satisfaction with competitors?

Competitors

What are they doing now?

Where do competitors advertise, and how often?

What is their sales pitch?

How do competitors price?

How do they distribute?

How do competitors position themselves?

How do competitors react to threats?

How do successful competitors differ from the lesser?

What are their market shares?

Compare competitors to your organization in terms of your:

Strengths

Weaknesses

Opportunities

Threats

Product Position

Differentiate your product and your service.

Find the opportunity.

Remember that famous glass of water? The one that optimists see as half full and pessimists see as half empty? A scientist, however, sees a question -- Was the glass designed with too much capacity?

What we see is, actually, a matter of perception. What your customer sees is, also, a matter of perception -- his perception. Understand your customer's needs.

Describe your products.

Describe your customer's pain ...

Some sales systems will script sales closing techniques based on customer needs or wants. My opinion is to agree with other sales systems which insist that customers only buy on an emotional level.

Have you bought everything you wanted? Have you bought everything you needed? Of course not. But, how did you feel when your car stranded you on the highway? Were you a bit more receptive to the idea of buying a new car?

You must understand your customer's psychological needs to best succeed in product marketing and sales.

If Possible, Do Market Testing

Show product and promotional concepts to customers.

Double check.

Make Strategy Decisions

Decide on new revenue growth and profits.

Decide on new product development.

Decide on price.

Decide on sales force, distribution, service.

Decide on customer psychological factors, not features and benefits.

Decide on product promotion.

"Introducing Marketing" Wilts, G., et al (Pan Books)

Answer the following questions:

1. What is Product-Market Strategy associated with?

2. How does Product-Market Strategy help to achieve success in competitive markets?

3. What is the relationship between costs, cash flow and profits?

4. Compare different market strategies. Which one is the most suitable for your firm? Why?

5. Using the outline by R. Winton attempt to work out the market strategy to promote your own item.