Before you go to market with your product or service offering, be it within existing markets or entering new ones, a strong product development strategy is key to your success.
When creating and developing products for business customers, it is critical to pay careful attention to the components of how your ‘product’ is constructed, as this will impact how successful your startup or SME will be in pursuing the markets and customers you seek.
What is a B2B product?
A B2B product can be either tangible goods, such as engineering equipment, or a service that is provided such as business consulting or office cleaning.
The end goal for any B2B product or service provider is to create value for its target markets and customers. Therefore, in order to really create value, the business must take a holistic view of the product or service it is offering.
What is a product development strategy?
Often in business, we believe a product development strategy is simply the development of products and then taking these product ideas to market through innovative product design and marketing. Unfortunately, this approach does not take into account the customer or the market.
An effective B2B product development strategy takes a new product or improves an existing product, to provide new innovation to consumers that the market seeks. The key here is the customer is considered all the way through the process – from business analysis to product development, manufacturing, product management, testing, advertising and marketing.
What are the components of developing a B2B product or service offering?
To create products and services that business customers will want to buy, they must consist of the following:
The core product or service:
- the key function of your product or service that solves a customer’s problem.
i) An example of a core product is a piece of biomedical diagnostic equipment that enables doctors and scientists to conduct analyses for specific medical conditions.
ii) An example of a core service is a Managed Service Provider that manages IT services for companies to ensure they are fully operational.
However, in B2B, simply providing a core product or service is not enough to get business customers to want to buy. You have to provide additional offerings that enhance the core product or service. These are commonly referred to as ‘the value adds’:
The value adds
- Additional offerings that meet a market’s and customers’ broader set of needs and preferences and provides even more value to business customers in meeting their key priorities and objectives
- They can consist of services, programs and systems that help customers to use your product and/or help them achieve their broader business objectives such as
i) Increasing revenues
ii) Decreasing costs and risks
iii) Increasing customer retention
- Examples of value-adds include:
iv) Order Management and Inventory
v) Advice and Consulting
vii) Joint Market Research
Therefore, when building out your product development process, it should consist of your:
CORE PRODUCT OR SERVICE + VALUE ADDS
Your company offering, in essence, is what I call The Customer Solution as it is delivering to a broader set of market and customer needs.
The link between Product Development and your Go To Market strategy
Your “Go To Market” strategy is the way in which your company brings its product (i.e “The Customer Solution”) to market.
It is important that your complete offering meets the needs, requirements and priorities of the specific markets and customers you are targeting. If you are planning to enter new markets, these areas should be given strong consideration during the product development process:
- Service and support including:
i) Queries and complaint handling
ii) Fault Restoration
When developing your go to market strategy it is important that you consider how these elements may need to be tailored to the different target markets and customers. For instance, will you require:
- Different service levels (eg such as response times)
- Different channel preferences (eg online or phone) for service queries
- Mechanisms to service different time zones as well as different languages
Refining your product & service offerings
Knowing how to tailor your product and service offerings to meet the requirements of your target markets is achieved by “Listening to your Markets” and “Listening to Your Customers”, something we covered in a recent episode of LIG TV – How to Listen to Business Customers.
In the next post, we dive deeper into the product development process and look at how to provide your core product(s) & value adds as flexible market offerings to your business customers.
People typically regard innovation as being about creating a new product (“a thing”) or technology. However, regardless of what your service offering is, there are three ways you can innovate your business to increase revenues, clients and ultimately grow your business.
If you are looking to take your start-up or SME global, here are some tips on developing an effective international B2B Go to market strategy to help you take your business to the next level.
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