The product strategy cannot be considered to be an isolated function of marketing. Product strategy involves multiple marketing functions which are executed under the umbrella of product strategy.
As already described earlier, the product strategy involves analyzing and strategizing to attain the required capabilities in terms of engineering, of production, of distribution (sales) existing in the company or of time to acquire them (by hiring or by mergers). It must evaluate the customers’ expectations at the time of delivery. It must guesstimate the competition (including new entrants) probable moves to enter the same market.
Now we will be looking at how these different functions are applied within the B2B market in order to carry out the product strategy to achieve the desired goals and objectives. It is important to note that each function described below should be considered as a building block of the product strategy and product strategy is actually how the different functions are applied in order to develop, market and sell the product to the target market.
B2B Branding is different from B2C in some crucial ways, including the need to closely align corporate brands, divisional brands and product/service brands and to apply your brand standards to material often considered “informal” such as email and other electronic correspondence.
Product (or Service)
Since business customers are focused on creating shareholder value for themselves, the cost-saving or revenue-producing benefits of products and services are important to factor in throughout the product development and marketing cycles.
People (Target Market)
Quite often, the target market for a business product or service is smaller and has more specialized needs reflective of a specific industry or niche. A B2B niche, a segment of the market, can be described in terms of firmographics (as opposed to demographics) which requires marketers to have good business intelligence in order to increase response rates. Regardless of the size of the target market, the business customer is making an organizational purchase decision and the dynamics of this, both procedurally and in terms of how they value what they are buying from you; differ dramatically from the consumer market. There may be multiple influencers on the purchase decision, which may also have to be marketed to, though they may not be members of the decision making unit.
The business market can be convinced to pay premium prices more often than the consumer market if you know how to structure your pricing and payment terms well. This price premium is particularly achievable if it is supported with a strong brand.
Promotion planning is comparatively easy when company are well aware of media, information seeking and decision making habits of your customer base, not to mention the vocabulary unique to their segment. Specific trade shows, analysts, publications, blogs and retail/wholesale outlets tend to be fairly common to each industry/product area. They key factor here is find out what are the different parameters with respect to the customer behavior for your product/industry. Once this key operation has been performed then the process of designing a promotional campaign becomes seamless process. Promotion techniques depend on marketing communications strategies.
Place (Sales and Distribution)
The significance of a knowledgeable, experienced and valuable direct (inside or outside) sales force is often critical in the business market. If you sell through distribution channels also, the number and type of sales forces can vary tremendously and your success as a marketer is highly dependent on their success.
B2B Marketing Communications Methodologies
The Objective of B2B marketing communications is to sustain the organizations’ sales effort and improve company profitability. B2B marketing communications tactics include advertising, public relations, direct mail, trade show support, sales collateral, branding, and interactive services such as website design and search engine optimization.