Product Strategies for Business Markets
Whether a company manufacturers or buys products wholesale, it has to have a product marketing strategy to get its products into consumers’ hands. Most product marketing strategies begin with an idea or concept, then move into various stages of development that can include market testing, setting pricing, training a sales force and executing promotion. The product marketing strategy encompasses every department in a corporation from engineering and design to distribution and sales.
One of the key components of a product marketing strategy is selecting a target market. The target market is usually a specific demographic group that can be defined by a certain age range, socioeconomic status or even sex, race or creed. For example, the target market for baby strollers is usually pregnant mothers or expectant grandparents. A company marketing rosary beads or bracelets would likely target Catholic people. Understanding your customers’ emotions, such as brand loyalty, is key to meeting their needs.
The product marketing strategy usually starts with the core product function, The core product function is the key benefit that the product fills for consumers. From there, an actual product description must be created, which includes the various features or varieties of the product and what differentiates it from those of its competitors. The augmented product function includes additional services tacked onto the product, such as a warranty or free shipping.
The product marketing process then typically moves through a series of decisions that must be made, often with the help of market research or focus groups. These decisions include profit goals, pricing, distribution and methods of promotion, such as advertising, coupons and public relations.
The benefits of a well-planned product marketing strategy include greater sales and profits. Companies that target the right customers and offer products at an acceptable price will usually profit more than companies that do things haphazardly. A company will also be more successful with its product marketing strategy if it markets through the right distribution channels and executes advertising and promotions that reach its target market.
Companies must also account for the life cycle of their products when developing their product marketing strategy. A product life cycle includes the introduction, growth, maturity and decline stages of a product. Sales for a new product technology will typically skyrocket the first few years until more competitors enter the market. Over time, sales will level off and decline. It is up to the corporate management team to extend the product life cycle with additional product lines.