More Information About Starting Your Small Business
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Product Basics |
Products may be described in terms
of their features and benefits. Features are product characteristics;
benefits are customer needs served by those features. Some examples
of features are size, color, horsepower, functionality, design,
hours of business, and fabric content. Benefits are less tangible
but always answer the customer’s question: What’s in
it for me?
While product features are usually easy to define, product benefits
can be trickier because they exist in the customer's mind. The most
compelling product benefits are those that provide emotional or
financial rewards. It’s not the brighter smile that the toothpaste
offers that is its benefit; it’s what the smile might bring
you (a good-looking mate, a better job, etc.).
Emotional rewards run the gamut of human emotions, but basically
allow the buyer to feel better in some way. For example, sending
flowers to a friend or family member allows the buyer to feel supportive
or loving. Buying products made from recycled materials offers the
buyer the chance to feel environmentally responsible.
Products that deliver financial rewards allow the buyer to save
money (e.g., a discount long-distance phone plan) or make money
(e.g., computer software for managing a home-based business). |
Discovering Your Product's
Benefits |
To identify your product’s
benefits, you must consider your customers' needs. Imagine yourself
in your customers’ shoes, talk to them directly, or conduct
surveys asking about their needs and perceptions.
If possible, hire an independent firm to conduct a focus group
with a sample group of customers to test your product for usability
and desirability.
Examine customers who have purchased your product in the past.
What do their customer profiles tell you about your product’s
benefits?
Once you have a basic sense of your product's benefits, you can
set up systems to develop and track their evolution:
- Ask customers for suggestions for improvement.
- Pay careful attention to customer complaints and prospect inquiries.
Train and reward employees for questioning customers and prospects
to learn what they like and don’t like about your product.
- Watch your competitors. Do the changes in their product offerings
suggest product benefits you hadn't yet considered?
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Why is it important to understand
my product’s features and benefits? |
Understanding product features and
benefits allows you to:
- Describe your products in terms relevant to your customers.
- Differentiate - explain how your product is different than the
competition’s, with different benefits.
- Effectively choose pricing and positioning strategies. Refer
to strategy ideas below in "Strategies that are based on
features."
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Differentiation |
Products may be highly unique (specialty
products), virtually indistinguishable from competitors’ products
(commodity products), or in between these extremes. No level of uniqueness
is necessarily better than any other, but they do require different
marketing strategies. A potentially important strategy for specialty
products is differentiation, which sets them apart from the competitors’
products in the minds of customers. A thorough understanding of how
your product’s benefits compare to your competitors’ allows
you to compete effectively with them through differentiation.
Commodity Products Few, if any, perceived differences
among competing products
Specialty Products Highly unique features compared
to other products competing for buyers dollars |
Strategies that are based upon features |
- Introducing - Identifying yourself as the first
to offer a new product feature is a proven competitive strategy.
For example, specifying a product as the first organic body lotion
containing Vitamin E will position your company as a leader, at
least for a while.
- Improving/Modifying - Instead of being at the
head of the pack with a totally new feature, you might modify
or improve your product’s features, which creates the impression
that your company cares about satisfying its customers. Modifying
product features is a strategy many businesses use when a competitor
has lowered prices. For example, if the maker of one organic body
lotion lowers its price, the maker of another may add Vitamin
E as a "new and improved" feature but keep its price
the same. It is important to remember that modifying features
usually leads to changes in benefits. Stay aware of the evolution
of perceived benefits your product offers so you can use them
in your marketing.
- Grouping - Often, features are grouped into
different product models — and prices — escalating
from a basic model to a "fully loaded" model. Automobiles,
electronic devices, and vacation packages each offer features
that may be added to a basic product model. Services can also
be grouped in this fashion. For example, an accountant might offer
a certain fee for preparing annual tax returns, another fee to
also process payroll, and another to manage all of a client's
financial affairs.
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