Introduction to Product Marketing
Product marketing is creating, communicating, and delivering value to target customers by focusing on the product or service (or the category of products/portfolio of services). It is an essential component of sales and marketing that helps organizations to develop demand for their product or service. Essentially, it’s a strategy for boosting products and services to maximize growth and profitability. Product marketing is about as much revenue as gross margin.
What is Product Marketing?
Product marketing is about building the strategic positioning of a product or service.
On one end, product marketing deals with defining the product, the type of technological platforms available, and the price positioning (all of which depend on a customer target but also impact the channel mix). So a typical product marketing challenge is to define which benefits are essential for your product and how to make them credible in a way that they are cost-effective. A typical example is the consumer electronics industry, where new technologies and features are typically adopted first by the most expensive products in the range to become, in time, the standard for the whole line (think in terms of Retina displays or Mac Processors). Companies that select a multi-channel strategy like Sony for their Bravia TVs require product marketing to address which lines should have access to the luxury channels and which ones to the mass-market ones.
On the other end, product marketing is about cost control and platform choices. In our TV examples which lines are 4K and which 1080? Which has the 3D TV feature, and which of the existing 3D engines would they use?
Product marketers develop strategies to communicate with customers, partners, and prospects about products that will fulfill their needs. They are in charge of building and managing the marketing toolboxes used by the commercial teams by communicating the value, benefits, and technical aspects of the products or services to customers. They work closely with sales and Marcom teams to develop messaging strategies that attract, convert, close, and delight customers. Product marketers are responsible for creating marketing strategies that the Marcom teams will compose in materials used in sales conversations with prospective buyers.
Why is Product Marketing important?
Product marketing is a critical part of the product development process. A well-executed product marketing strategy will:
- Support the brand building.
- Drive NPS.
- Enable commercial development and ease Key Account Management.
- Differentiate the product portfolio from the competition.
- Drive short- and long-term profitability.
Product marketing is also essential for driving revenue growth through new sales channels like eCommerce or direct sales teams by defining products with high channel potential.
Product Marketing: Benefits, Features, Platforms
Product marketing is one of the most outward-looking activities. It is fundamental to monitor what are the emerging technologies in the market, as well as how competitors and suppliers are moving. In industries where technologies move faster and faster, product marketers must be ahead of the curve so as not to risk the tail of commoditization of the market, which is the least profitable segment.
Being ahead of the curve also means understanding consumer sentiment and which consumer needs might or might not be emerging. Assume you are the product manager of the category of digital cameras when more and more phones are introducing cameras on their devices: do you bet on consumers switching to cameras on those phones or on consumers keeping those categories separate?
Understanding consumers allows product marketers to formulate a plan on which benefits (with which Reasons to Believe) to add to which line of products. Maximizing the differentiation and novelty of the line while utilizing technology with the desired gross margins.
What else does a product marketer do?
Product marketing is the crucial part of the product development process that defines what a company sells and how it is sold. Product marketers are responsible for the entire product life cycle, from concept to launch. They work with engineering/R&D teams and business units to understand what makes their products unique in the market and how they fit into current/future market trends.
Product marketers must be able to evangelize salespeople on why a customer should buy their product but also educate customers on how their product can solve specific problems or needs.
Product Marketing Framework: Philips’s Value Proposition House
Identifying key drivers and the unique value proposition is a good starting point, but it’s not enough. To create an effective marketing plan, you must ensure that your value proposition aligns with the company’s overall mission and vision.
To understand what it means, we look at the example of Royal Philips, a Dutch multinational conglomerate corporation founded in Eindhoven in 1891. Philips was a pioneer in consumer electronics, lighting, and domestic appliances, once a semiconductor manufacturer and now primarily focused on medical devices.
In Philips, they developed a framework to visualize their product concept: The Value Proposition House, or VPH.
The VPH is a summary framework to position products or services relative to other offerings in the market. It specifies what unique benefits they bring, who would benefit from them most, which needs those benefits addressed, and what makes them unique from competing products/services.
In addition, the VPH included:
- A detailed summary of the competitive landscape.
- Focusing on competing technologies.
- The critical Reason to Believe in those benefits.
Finally, in the VPH, each product had to address how it did deliver against the Brand Pillars: in a way, each product had to support the brand building.
The VPH could be easily plugged into the corporate messaging architecture for the Marcom department to develop communication materials, ATL and BTL campaigns, and even digital assets. It also represented a shared platform to create future consumer insights, test and validate incoming technologies, and ultimately match those benefits with consumer needs.
Product Marketing is an essential part of any business. It helps companies to differentiate themselves from their competitors and promote their products on the market. Product marketing professionals use various techniques and tools to reach new customers and manage profitable portfolios or categories.