Enp presentation products_and_markets_v3

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Understanding your product in a competitive market.

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Enp presentation products_and_markets_v3

  1. 1. Governance ■ Leadership ■ Blended Value Design ■ Products & Markets ■ BusinessOperations ■ Customer Relations ■ Marketing ■ Risk Analysis 1Products and Markets
  2. 2. Social Enterprise Products and MarketsToolkitUnderstanding the value and social impact ofproduct/services in the marketplaceGovernance ■ Leadership ■ Blended Value Design ■ Products & Markets ■ BusinessOperations ■ Customer Relations ■ Marketing ■ Risk Analysis
  3. 3. This toolkit looks at thefundamentals of product and marketassessment, and the importance ofunderstanding one’s product in acompetitive market.Presented by ENP and Octopus StrategiesGovernance ■ Leadership ■ Blended Value Design ■ Products & Markets ■ BusinessOperations ■ Customer Relations ■ Marketing ■ Risk Analysis
  4. 4. Marketing Fundamentals: The 4P’sGovernance ■ Leadership ■ Blended Value Design ■ Products & Markets ■ BusinessOperations ■ Customer Relations ■ Marketing ■ Risk AnalysisAt its essence, marketing is:Putting the right product (or service)…in the right place…at the right price…with the right promotion.Together, this framework is referred to as “the 4 P’s,” acommonly used tool to help entrepreneurs understand theirproduct and assess the market in which they’re selling theirproduct.This toolkit looks at the first three P’s. The fourth P, Promotion, is explained in detail in theMarketing Toolkit.
  5. 5. Governance ■ Leadership ■ Blended Value Design ■ Products & Markets ■ BusinessOperations ■ Customer Relations ■ Marketing ■ Risk AnalysisThe First “P”Product
  6. 6. Know Your ProductA product consists of goods or services produced or provided by an enterprisethrough its economic activities. To find out if you’re selling the right product, start by asking yourself: • What are you selling?• Who does your product appeal to?• Why will these people want to buy your product or service? Howdoes it meet their needs?Governance ■ Leadership ■ Blended Value Design ■ Products & Markets ■ BusinessOperations ■ Customer Relations ■ Marketing ■ Risk Analysis
  7. 7. Know Your ProductIn addition, social entrepreneurs need to consider one more question:• How, if at all, does your product align with your socialmission? Your product may or may not directly support your social impact goals, but it’sessential that you think this through. The products sold in a thrift shop may have little to do with the children’s charitythe thrift shop supports -- but it’s critical that they’re not supporting thechallenges the charity exists to solve (in other words, people might stay awayfrom a hospital gift shop that sold cigarettes).Governance ■ Leadership ■ Blended Value Design ■ Products & Markets ■ BusinessOperations ■ Customer Relations ■ Marketing ■ Risk Analysis
  8. 8. Know Your ProductWhat are you selling?•What does your product look like? What does your service provide tocustomers?•How and where will the customer use it?•What will you call your product?•How is your product different from your similar products/services sold bycompetitors?•What is the most your product can cost to provide, and still be sold witha sufficient profit margin?•How realistic is it that you can successfully deliver the product orservice?Governance ■ Leadership ■ Blended Value Design ■ Products & Markets ■ BusinessOperations ■ Customer Relations ■ Marketing ■ Risk Analysis
  9. 9. Market ResearchOnce you’ve carefully considered your product choice, you’ll need to conductsome research to learn more about your customers and how your productmeets their needs. You’ll also want to look at what your competitors are doing, so that you learnfrom that and, when appropriate, set yourself apart (“differentiate”).Governance ■ Leadership ■ Blended Value Design ■ Products & Markets ■ BusinessOperations ■ Customer Relations ■ Marketing ■ Risk Analysis
  10. 10. Customer ResearchKnow your customer…•What does your customer think about?•What do they care about?•What does the customer need from your product/service?•What features does your product have to meet these needs?•What features does your product have that the customer doesn’tactually need?•Where do buyers look for your product?•What price will they pay?•How often will they buy it?Concepts of market segmentation and understanding your customer are explained in detail in the Sales andCustomer Relations Toolkit.Governance ■ Leadership ■ Blended Value Design ■ Products & Markets ■ BusinessOperations ■ Customer Relations ■ Marketing ■ Risk Analysis
  11. 11. Customer ResearchSocial entrepreneurs also need to be keenly aware that those who benefitfrom your product or service may not be the ones who areactually willing to pay for it. If this is the case for your enterprise, think creatively about who yourcustomers really are, and how their business with you can support yourconstituents.Governance ■ Leadership ■ Blended Value Design ■ Products & Markets ■ BusinessOperations ■ Customer Relations ■ Marketing ■ Risk Analysis
  12. 12. Competitive ResearchWho else is selling a product or service that could meet the same needs asyours? • Direct competitors offer the same primary goods or services tothe same customer base. For example, Coke and Pepsi are directcompetitors.• Indirect competitors offer a good or service that can serve as aviable substitute. For example, Coke and all brands of milk areindirect competitors. Make a list of your direct and indirect competitors.Governance ■ Leadership ■ Blended Value Design ■ Products & Markets ■ BusinessOperations ■ Customer Relations ■ Marketing ■ Risk Analysis
  13. 13. Competitive ResearchFor each competitor you’ve identified, consider:• What are the advantages your product has over yourcompetitors’ product?• What are the advantages your competitors’ product has overyour product?Governance ■ Leadership ■ Blended Value Design ■ Products & Markets ■ BusinessOperations ■ Customer Relations ■ Marketing ■ Risk Analysis
  14. 14. Competitive ResearchA differentiator is anything that sets your product or service apart from yourcompetition. In certain cases, differentiation can be the basis for customers choosing yourproduct over your competition. For a social entrepreneur, the social value of your product or service can be adifferentiator. However, it’s usually not a primary driver of the decision topurchase.Governance ■ Leadership ■ Blended Value Design ■ Products & Markets ■ BusinessOperations ■ Customer Relations ■ Marketing ■ Risk Analysis
  15. 15. Competitive ResearchYou might differentiate your product or service based on one or more of thefollowing attributes, all of which are important to customers:• Price• Efficiency, performance and quality• Health and safety impact• Convenience to buy and use• Symbolism and status What differentiates your product or service?Governance ■ Leadership ■ Blended Value Design ■ Products & Markets ■ BusinessOperations ■ Customer Relations ■ Marketing ■ Risk Analysis
  16. 16. Governance ■ Leadership ■ Blended Value Design ■ Products & Markets ■ BusinessOperations ■ Customer Relations ■ Marketing ■ Risk AnalysisThe Second “P”Place
  17. 17. The Second “P” - PlaceOnce you understand what you’re selling and to whom, you’ll need to decidewhere your product will be sold. Where will your potential customers look foryour product or service? • Will you run a retail operation? If so, what kind?• Will you sell your products or services online?• Will you need to attend trade fairs? Or hire sales people?• Are there other potential distribution channels for your product?Governance ■ Leadership ■ Blended Value Design ■ Products & Markets ■ BusinessOperations ■ Customer Relations ■ Marketing ■ Risk Analysis
  18. 18. Governance ■ Leadership ■ Blended Value Design ■ Products & Markets ■ BusinessOperations ■ Customer Relations ■ Marketing ■ Risk AnalysisThe Third “P”Price
  19. 19. The Third “P” - PriceJust because you’re a social entrepreneur doesn’t mean your products orservices shouldn’t compete competitively on price. In fact, it’s essential that you set your price so that at the end of the day, yourbusiness is profitable!Governance ■ Leadership ■ Blended Value Design ■ Products & Markets ■ BusinessOperations ■ Customer Relations ■ Marketing ■ Risk Analysis
  20. 20. Pricing StrategyWhen setting a price for your product or service, start by factoring in what we’vealready discussed:• What is your product?• Who are you it selling to?• Where are you selling it?The next most important question to consider in your pricing strategy,particularly for social entrepreneurs, is:• What’s the value (or the “value proposition”) to the customer?Governance ■ Leadership ■ Blended Value Design ■ Products & Markets ■ BusinessOperations ■ Customer Relations ■ Marketing ■ Risk Analysis
  21. 21. The Value PropositionThe value proposition is a statement of the unique benefits delivered by youroffering to your target customer. It describes the value of your product or brand,and offers a compelling reason for customers to buy. In addition to the traditional financial definitions of “value,” for a social enterprise,the value proposition is usually defined by the social value the product orservice.Governance ■ Leadership ■ Blended Value Design ■ Products & Markets ■ BusinessOperations ■ Customer Relations ■ Marketing ■ Risk Analysis
  22. 22. Social Value to the customerWhen customers buy a product/service from a social enterprise, they don’t onlybuy it for the benefits that are apparent. They also buy it for its social value. Your product’s social value may be inherent in the product itself – for example,you may be selling consulting services that directly further your organization’smission to create more affordable housing. Or the social value may be moreindirect, as in the case of Girl Guide cookie sales, which raise revenues tosupport the nonprofit’s mission. In either case, the social value is ultimately the social or environmental benefitsthat your nonprofit is able to provide with the revenues generated from thesocial enterprise -- benefits it wouldn’t be able to provide in the absence of thatrevenue.Governance ■ Leadership ■ Blended Value Design ■ Products & Markets ■ BusinessOperations ■ Customer Relations ■ Marketing ■ Risk Analysis
  23. 23. Pricing Strategy – OtherConsiderationsLike any business, in addition to considering your product’s value proposition,you’ll also need to consider the following when setting your price:• What’s the demand for your product or service?• What are your competitors charging?• Is your customer price sensitive? In other words, will a small decreasein price get you extra market share? Or will a small increase in pricenot be noticed, giving you extra profit margin?• How much does it cost you to produce your product or service? Makesure to include fixed and variable costs.• What are your pricing objectives? Do you want to maximize profit ormaximize revenue?Governance ■ Leadership ■ Blended Value Design ■ Products & Markets ■ BusinessOperations ■ Customer Relations ■ Marketing ■ Risk Analysis
  24. 24. SummaryIn social enterprise, as in traditional businesses, choosing the right product andunderstanding its market are important strategic insights.Successful enterprises recognize the fundamental connection between productsand markets, and the interplay between them, as products meet newcompetitors and customers’ tastes and preferences evolve. Remember… conducting proper market research is not a project, but anongoing role within your enterprise.Governance ■ Leadership ■ Blended Value Design ■ Products & Markets ■ BusinessOperations ■ Customer Relations ■ Marketing ■ Risk Analysis

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