Positioning a product in one market is a challenge. Positioning and launching a product into several distinct markets at the same time can be an Olympic feat.
Therefore, when you believe your product will do well in several markets, you must decide whether to roll out one market at a time or go for the gusto and create multiple product marketing campaigns to hit the street simultaneously.
SWOT Team members, we need your valuable advice on positioning products for different audiences.
Is it best to prove the product in one market first and then expand into other markets? Are three markets three times the work, or are there certain marketing economies that can be achieved by synchronizing your product launches? This issue's dilemma asks, Can a company successfully position a product for launch in several markets simultaneously?
Not interested in product positioning? Let us know what keeps you up at night. What dilemma do you take with you when you leave the office? Your peers would love to help. Write to us and ask our SWOT Team about your dilemma. Tap into the collective strength, wisdom and experience of this group. It works, and you could win a free copy of our book, A Marketer's Guide to e-Newsletter Publishing.
Revisit our previous dilemma—read below for your peers' best advice on how to kill a popular but unprofitable product.
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This Issue's Dilemma
SWOT Category: External Opportunity
We have a product that we'd like to position and launch into several markets. What advice can SWOT Team members provide for staging a successful product rollout to three separate target markets simultaneously?
—Anonymous, Product Marketing
SWOT Category: Internal Weakness
We need to cut our losses and make a gracious exit.
After much consideration, research and number crunching, we've decided to cut one of our most popular but least profitable products. We have a loyal and established client base and are concerned about how to handle the transition without alienating them. SWOT Team, your wisdom would be helpful here. What have your experiences been? What is the best way to not only keep customers, but to deepen the relationship, even after their favorite product is removed from the mix?
—Anonymous, Product Manager
Summary of Advice Received
Anonymous, you've raised an interesting dilemma—one that demonstrates the disparity that sometimes exists between companies and their markets. What's good for your company is not always good for your customers, and vice versa.
Marketing—the great testing ground that it is—gives you the opportunity to adjust your mix until you find a balance that meets your company's objectives and also serves the needs of your customers.
Several SWOT Team members provided insights into how you can turn this situation around and deepen your customer relationships at the same time. Here's what your peers had to say:
1. Understand the product's popularity.
2. Talk to loyal customers.
3. Make price adjustments to the product.
4. Add value and raise the price.
1. Understand the product's popularity
If you don't know what makes the product popular already, you should invest some time in understanding why consumers buy it. Any element of your marketing mix could be affecting the product's success.
An anonymous marketing manager questions your evaluation process and offers additional factors to consider:
Your dilemma implies that you believe price to be the factor that controls the popularity of the product. Have you tested this? Perhaps there are other aspects of the marketing mix that can be adjusted to improve profitability while keeping the product on the market. Look at these factors:
- Is there a component of the way your product is packaged that makes it a better selection than that of competitors?
- Can you adjust the packaging or the quantity to still hold appeal with customers?
- How does your product reach the market?
- Are there distribution options that will allow customers to still get what they want, when and how they want it, while reducing costs?
It's important to understand the customer's perception of the product's value before you make adjustments.
2. Talk to loyal customers
The best way to find out what customers think about your products is to ask them. There is an underlying assumption among many marketers that when you ask customers their opinion they most often say one thing and then do another. But a well-designed feedback campaign gives customers the opportunity to express their real expectations while giving you the insight you need to meet those expectations profitably.
One SWOT Team member suggests these cost-effective approaches to communicating with customers and getting to the heart of what matters:
There are several cost-effective ways to reach out and connect with your customers and most importantly to discover what they find most valuable about your product.
- Use online or automated voice response surveys.
- Conduct tele/Web conference focus groups.
- Offer a different poll on your Web site each week that asks visitors to rate a specific aspect of the product.
You may find your answer somewhere in between continuing to sell an unprofitable product and killing it altogether.
Another anonymous SWOT Team member reminds us that customer input can be a key factor in determining your future profitability:
Thanks to the input of your customers/established client base you will be able to introduce an even better product, albeit with a profit.
3. Make price adjustments to the product
Even if you decide to “kill” a product, there are a few ways to do it. Your peers suggest raising prices to test demand. You may be surprised to find that your customers are willing to pay more for the product. This will allow you to achieve profitability by selling fewer products at a higher price. Ironically, you may even attract new customers whose perceptions of value will be heightened by your increased price tag. Remember that an increase in price is not always matched by an equal decrease in demand.
Greg Nothacker, MBA, a senior consultant with Zenmark, offers this advice:
If you kill a popular product, you are giving away enormous equity in the brand and potentially losing synergy in the marketing mix. Instead of killing the product, raise prices to a profitable level, test consumer response, and re-evaluate. Odds are, a decline in sales will be compensated by an increase in overall profit. Repricing the product is another form of repositioning it. Give it a try. A popular product is such a gold mine; don't “kill” it unless you've tried everything else.
Advice from another Anonymous SWOT Team member suggests that raising prices will allow you to discontinue the product gradually, without alienating customers:
Is it popular because of its low price? If so, raise the price to reach desired profitability. If it's low price that creates demand, an increased price should kill the product without alienating customers.
You mention “transition,” so apparently there is a replacement product in the works. If the new product has been “feature-reduced” to reach your profitability goal, you may be hard pressed to retain, much less deepen, your customer relationships. Your hardest sell may be internal. Internal stakeholders can be less understanding than customers.
4. Add value and raise the price
Rarely are we limited to an “either/or” selection in marketing. You may want to think about re-introducing the product by adding value and raising the price simultaneously.
An Anonymous SWOT Team member rounds out our dilemma with this final point:
Have you spoken to your customers? What do they find most valuable about the existing product? What value would they like to receive that you are not offering now?
By involving your customers in the process and adding value to the newly improved product, you will achieve both of your primary objectives, profitability and deeper relationships.
Excellent advice, SWOT Team—thanks again!
We did our best to provide a thorough overview of your responses to this timely topic. All of the advice we received was insightful. Thanks for your participation. We appreciate it!