Every leading company has a winning game plan that includes the 4 Ps of marketing – product, place, price, and promotion. Understanding the 4Ps has served me well during my career as a senior executive and serving my clients in industry today.
A focus on Product came to light in a recent marketing class I was teaching when one of the students asked how companies know when to make changes in their game plan for existing products. Know that the definition of product includes the actual product that is consumed, the packaging that protects and showcases it, and any service aspect that supports the value the product delivers for its customers.
My response was that leading companies apply ongoing assessment to ensure that their product delivers appropriate value for their customer. The first indicator to consider change is if sales are declining. In addition, scanning the environment for changes in consumer trends, competitive innovations, and societal and social influences are also important areas they monitor regularly.
While this works in theory, and for those companies that apply this approach, there are many examples of companies providing new and improved that is more like new and worse. Research on new product development confirms that approximately 80 per cent of new products fail. I believe the failure rate for changes to existing products is also very high.
Case in point. Recently, I purchased one of my familys favourite pickle brands, Strubs. Except that the Strubs packaging was changed from a glass jar to a plastic container. I was intrigued by this move as I had purchased pickles in the U.S. earlier this year that were also in plastic containers. The U.S. containers remained vertical with an easy to open and close lid. The Canadian Strubs package is horizontal, and the lid does not open easily nor close easily. In fact, I had to place the container into a resealable bag to avoid pickle juice spilling in the fridge.
Because of the poor package redesign, I will not buy Strubs pickles in that container again. The bigger question is how many other customers experienced the same level of frustration with the package. It really felt like you had to be a NASA engineer to know how to pry it open and then reseal the top. It is very evident I am not a rocket scientist.
There can be many reasons for a company to make a change like this, such as lower cost of materials, decreased breakage in transit, and ease of in-store handling/stocking. Lets identify three guiding elements for the product section you should have in your winning game plan that Strubs seemed to have overlooked.
First, ensure that any change to existing products is based on the customer. While it is important for you to look for continual improvements in your organization, when these improvements are only made for the benefit of you, not your customer, then your possibility of failure increases dramatically.
Next, ensure that all the people in your organization understand the rationale for any changes. The best way to determine if there is a customer need for change is by direct observation of use of your current product. Simply using a survey does not provide the level of understanding required in your decision process. From a customers perspective there was no need for the Strubs pickle container to be changed from glass to plastic where the lid does not open or close easily and properly.
This leads to the final point which is testing. Leading companies always test product enhancements before moving to full commercialization. In the case of the perplexing pickle container, I am not certain of the level and type of customer testing that Strubs conducted. Were customers asked about any frustrations or challenges with the existing jars? Or was this a company decision to change containers for the reasons noted above?
Investing time in this process to analyze the current usage of your product combined with a detailed process to test the potential enhancements is akin to practicing the very plays you are planning to use in a game. Only by testing against the current version are you able to know if there is a need for change and if the change will achieve its goals with your customers.
Too often companies will try to expedite the process and they may skip a step or simply gloss over some of the data. The risk by doing this will be felt when you go to market. I believe the proper investment of time and research and gaining insights from customers and staff will create an improved chance of long term success.
If your product is not wanted or needed by customers, the value of your product and brand has evaporated. Leading companies focus on making a product or a product enhancement that every employee is proud of and that customers will ask for now and in the future.
Tims bits: Your ability to have an eye to the future by focusing on improving your understanding of your customer will allow you to create superior value for your customers. Remember that the customer pays you for something of value and it is your responsibility to deliver that value consistently as part of your winning game plan.
Tim Kist is a Certified Management Consultant, authorized by law, and a Fellow of the Institute of Certified Management Consultants of Manitoba.
Tim is a certified management consultant with more than two decades of experience in various marketing and sales leadership positions.