hogeschool van amsterdam interactieve media the anatomy of a product and the product concept...

Hogeschool van Amsterdam Interactieve Media

The anatomy of a product and the product concept document

Hoorcollege marketing blok 2 week 4


Learning goals

By the end of this week’s colleges and the reading you should Be able to explain what a product is Be aware of the different types of product there are Understand the three levels of a product and why this is an

important idea Understand the key decisions that must be made when

developing a product Know how to develop a product concept document


Agenda

What is a product?

Why is product important in interactive media

Three levels of a product

Key product decisions

The product concept document

Positioning and the product concept

Summary


Where are we now?


What is a product?


Definition of a product

A product a thing (or a service) that is offered for use to a target customer / user with the aim of allowing them to satisfy needs and/or wants It helps them achieve their goals It helps them solve their problems


The term “product” is used broadly


Products and interactive media

By its very nature interactive media is often about creating “products” rather than simple communication The level of interaction required is usually (and should be)

greater than a traditional piece of communication

To be successful we need to understand how to develop “products” rather than just communications

We can do this by using the tools used to develop “physical” products


Three levels of a product


A product is more than just its features

When developing products marketers usually think of products as having three levels The core (kern) product The actual (tastbaar / werkelijk) product The augmented (uitgebreid) product


Three levels of product


Why is this important?

Thinking about a product in three levels is important because:1. Customers buy benefits or solutions to problems

The Core product focuses on these

2. A product is more than just its features The actual product tool helps us define a more complete

product

3. Actual products today are often quite easy to copy The brand and the augmented product can give us

competitive advantage

4. We can use this tool as the basis for a product concept document A product concept document is critical to the new product

development process since it is the basis of the go/no-go decision


Key product decisions


The product concept document


Introduction

This is a suggested (so not the only possible) format for a product concept document It is based on the three levels of a product

Part 1: The customer / user covers the core product

Part 2: The product covers the key decisions to be made for the actual product

Part 3: The extras covers the augmented product


The customer / user

1. Who is the customer and who is the user? Firstly are the user and the customer the same person? You should try to help the reader create a mental picture of the customer /

user: you might use your market segmentation and personas to do this

2. What is the need(s)/want(s) that the product satisfies Customers buy things that solve problems and help them achieve their

goals, what are these goals?

3. Why your product? There are possibly many ways to achieve goals, why would the customer

choose your product? The context-based scenario you developed to show what is wrong with the

current situation will be useful here

4. When, where and how will the product be used? Think about the time and the place the user will use the product Develop some positive usage scenarios that show how your product

would be used


The product

Product positioning How is the product positioned

for the target customer?

Quality What is the requirement for

product quality?

Features Features provide benefits and

benefits allow users to achieve their goals

What features does the product need to meet the need(s) that the product will be developed to fulfil?

Beware of “feature bloat”

Brand What brand will be used -

company or product?

Design guidelines Are there any minimum needs

in terms of design (think about size, style etc.). Always leave the designer room for creativity

Packaging Does the product need any

special packaging, or indeed does it need it at all?

Labelling What labelling is required for:

legal requirements, usability, promotion etc?


The extras

Installation Will you offer the customer

installation help, do you need to?

Service What level of service support does

the product need? This will be affected by your positioning and the complexity of the service

The level of service for a Chunky KitKat will be different from a piece of software that runs a factory

Help What sort of help do you offer the

customer? Again this is more important for complex products. Sometimes it might be just a manual or a quick start guide, for other products you may need online help or a telephone line.

Manuals Does the product need a manual?

What type of manual, user manual or a full technical manual?

Training Could you offer the customer

training? Does this make sense? If o, then how do you do this?

Delivery Do you deliver the product?

Credit Do you offer the customer credit?

Warranty How long is the warranty on the

product?


Positioning and the product concept


Not everyone accepts new products at the same rate

Source: Rogers, E. M., 1962. Diffusion of Innovation, Free Press


Factors affecting rate of adoption

1. Relative advantage when compared with alternatives

2. Compatibility to consumer’s tastes, needs, attitudes and existing products

3. Complexity - the less complex the quicker adoption

4. Divisibility (deelbaarheid) - how easy it is to trial (to reduce purchase risk) e.g. software

5. Communicability - ease of communicating benefits

6. Perceived risk - the cost to the consumer (in money and pride) if they make the wrong purchase decision

Source: Gatignon, H. and Robertson, T. S., 1985. ‘A Propositional Inventory for Diffusion Research’, Journal of Consumer Research, 11 (March), pp. 849-867


Good product positioning helps adoption

Product positioning is an important decision in the life cycle of a product because it helps with the product adoption process

Product positioning is about positioning the products benefits in the mind of the target customer Rather like positioning a company, but the focus is on the

benefits of the product

The aim is to overcome some or all of the factors that affect new product adoption


Positioning

Once we have chosen our target segment(s) we need to position our organization and its offers

Positioning is about owning a space in your target customers mind


Positioning is natural but it can be influenced

We naturally position products We organize the thousands of offers into categories

The aim of positioning as a conscious process is for us to actively try to get our target customer to position our offer in a certain way By planning a positioning that is attractive to the target

customer And by designing a marketing mix that supports this

positioning


Being number 1 is a good positioning strategy

Generally consumers do not remember all the products they are exposed to They organize them into categories or product ladders E.g.

Soft drinks: Coke → Pepsi → Fanta Beers: Heineken → Amstel → Grolsch

The top company is the one they remember most easily


More than one way to be number 1

The company or brand that is perceived as number 1 is usually easy to remember

However, there is more than one way to be number 1

Example Who crossed the Atlantic first by airplane?

Charles Lindenbergh? Not true?

Allcock & Brown did it first - Lindenbergh was the first to do it alone

Being perceived as number one has a lot of advantages

But there are lots of ways of being number 1 The trick is to know ensure it is relevant to your target customer


The number 1 approach to positioning

This approach was proposed by Al Ries and Jack Trout in their book Positioning: The battle for your mind

They noted that only one company can be number 1

But they argued that there are many number 1 positions available, such as: Biggest First Best quality Most innovative Etc., etc…

The trick is to understand what will work for your target customer

Ries, A. and Trout, J., 1981. Positioning: The battle for your mind, New York: McGraw-Hill


Three approaches

Ries and Trout suggested 3 possible approaches:

1. Strengthen your current position in the target customer’s mind Avis were number 2 to Hertz in the hire car market, so they

positioned themselves as ‘we’re number two, we try harder’

2. Look for an unoccupied position in the mind of the target customer Market holes are places where you can be first (e.g. the

number one MP3 player)

3. Deposition or reposition your competitor Stolichnaya vodka attacked Smirnoff by being noting that

only their vodka was actually made in Russia


Levels of positioning


Positioning and product positioning

The positioning of a particular product does not necessarily have to be the same as the brand or company positioning It will often be based on the product’s unique benefits

However, a product positioning must not conflict with the brand or company positioning


How position a product

Product positioning should be based on the goals of the target customer / user

The positioning should show how the product benefits the target customer in ways that are appropriate to that customer Like brand and company positioning, being number 1 in

some way is one approach

BUT there is another way

The successor approach to product positioning Your product is the successor (opvolger) to an already

familiar product This is like Ries & Trout’s 3rd option


The successor approach to product positioning


Why I Dark Side of the Moon wasn’t my first MiniDisc


Summary

Interactive media by its nature means that we tend to develop products

Developing products requires a different way of working compared to developing communications

The product concept document is a tool that allows you to develop products more effectively

Positioning your product is essential to success

There are at least two approaches to product positioning Number 1 approach Successor approach

hogeschool van amsterdam interactieve media the anatomy of a product and the product concept...

Documents

product product positioning

product key product

product important

product need

core product

product quality

term product

complete product