Your customer will consider your product or service in up to five different ways. Which of the fives ways customers consider when purchasing, will depend on the type of product you sell. Understanding how these aspects align will be crucial to the strategy you should adopt.
The Five Product and Service attributers important to Customers are:
- Product Characteristics – are you the best in your category?
- Supplier Support – how service focused are your sales and support staff?
- Product Availability & Convenience – how easily and reliably can people locate your product?
- Product Perception – what does your brand name, image and awareness communicate?
- Price – Are you expensive, affordable or the cheapest?
Your product may fall broadly into one of three product types:
(i). Shopping Products – as the name implies, customers will shop around to research features, advantages and benefits of your product or service. e.g. new cars, specialty items, appliances or strategic advisors like me 😉
(ii). Convenience Products – these are everyday items which do not require a great deal of decision making e.g. groceries, petrol or tax return agents.
(iii). Commodity Products – these are purchases based on price alone, with few if any additional attributes. e.g. water, electricity and foreign currencies.
For Shopping Products, actual product characteristics and quality are of primary importance. Of lesser importance will be the product’s brand perception and the level of retail presence. Hence, investment in R&D and product development will be more important than brand development.
For Convenience Products, brand name, brand image and brand awareness are of primary importance. Of lessor importance is having a continuous ubiquitous retail presence. Investment in brand development will be more important than R&D or continuous product innovations.
For Commodity Products, price is King! Investments in process improvements that drive down the cost of production and supply are far more important than any real brand development. e.g. Country Energy is a simple brand name, with little or no other associations apart from being an electricity retailer.
Need a hand choosing and executing the right strategic approach for your future? If so, we can help.
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