This document discusses various topics related to marketing industrial products, including: - Product positioning involves measuring customer perceptions of a product's attributes relative to competitors. Repositioning may involve emphasizing important attributes or better communicating advantages. - New technologies often face a "chasm" between early adopters and mainstream customers. Crossing the chasm requires winning niche customers with 100% solutions to prove the technology for pragmatists. - The "bowling alley strategy" aims to leverage success in one niche to spread adoption to surrounding segments, while the "main street strategy" pushes for rapid distribution to drive the product mainstream before it becomes a commodity.

2.  A business marketer’s marketplace identity is
established through:
 Brand
 Products
 Services
 A brand is one of the firm’s most valuable
intangible assets.
 Branding has emerged as a priority to
marketing executives.

3. Product Management
 Products are developed to fit the needs of the market
and are modified as needs change.
 Tools such as…
 Market & demand analysis
 Business market segmentation
 Market potential forecasting
…help marketers select markets and provide products
that meet their needs.
Product policy is directly related to market selection.

4. MARKETING FUNCTION: LEAD ROLE
 Marketer’s tasks include evaluating:
1. Potential product/market fit
2. New market opportunities
3. Competition
4. Strength & Weaknesses
 Marketer’s lead role is to transform the firm’s skills
and resources into products & services that will
enjoy positional advantages.

5.  Companies need to ask:
1. What do you want your company
name to stand for?
2. What do you want it to mean in the
customer’s mind?

6. Brand & Brand Equity Defined
 Brand
Name, sign, symbol, logo or anything that
identifies and differentiates the product
from competitors
 Brand equity
Set of brand assets and liabilities linked to
a brand; it can add to – or detract from –
the value of the brand

7. Customer-Based Brand Equity (CBBE)
 Kevin Lane Keller defines CBBE:
The differential effect that customer brand
knowledge has on their response to market
activities and programs for the brand.
 Brand Power relies on:
 What customers have learned, felt, seen and
heard about the brand over time.
 How customers link their thoughts to
feelings, perception, imagination and
experience of the brand.

8.  CBBE model lays out 4 steps for building a
strong brand:
1. Develop deep brand identity
2. Establish unique brand identity by
highlighting differences
3. Employ marketing programs to elicit
positive brand responses
4. Build brand relationships with loyal
customers

9. CBBE PYRAMID

10. Brand Identity
• To achieve brand identity, marketers must
create:
 Brand salience – something prominent
about the product
 Brand awareness – ability to recall or
recognize the brand under different
conditions
• Marketers need to create a clear connection
between the product and the brand name in
markets where the product competes.

11. • Establishes an association in the customer’s
mind that differentiates the brands’ meanings
• There are various brand associations
• Following example demonstrates two ways:
1. Brand Performance – the way(s) a
product/service meets customers’ functional
needs
2. Brand Imagery – The way(s) a brand meets
customers’ psychological or social needs
• Brand positioning should incorporate both
points of parity (breaks even to other
brands) & points of differences.

12. Consumer Judgments:
1. Quality: Customer’s attitude towards brand’s
perceived quality with respect to value and
satisfaction
2. Credibility: Customer perceives brand to be
credible with respect to expertise,
trustworthiness & likeability
3. Consideration set: Extent to which customer
finds brand a viable option and worth
consideration
4. Superiority: Extent to which customer
believes that brand offers advantages over
competitive brands

13. • Consumer feeling – a consumer’s
emotional reaction to a brand
• Numerous feelings can be tied to
brands, i.e.:
– Warmth
– Fun
– Excitement
– Security
– Power
– Sexiness
– Functionality

14. Consumer Brand
Resonance
 Final step is brand resonance, which
means forging a relationship. This
connection translates into:
◦ Brand loyalty
◦ Attachment
◦ Active engagement
◦ Word-of-mouth satisfaction & advertising

15. CBBE Pyramid

16. Brand Strategy Guidelines
• The “Brand Mantra”
• Develop a coherent branding strategy and then build on the
reputation of that brand
• A firm with a strong brand can command a price premium
for its products or services. However, to sustain that
premium, important points of differentiation must be
clearly communicated to target customer segments
• Successful branding requires a well-conceived market
segmentation plan

18.  International competition has made
quality an important strategic issue.
 As a prerequisite, suppliers need to meet
ISO-9000 standards.
 The quest for improved quality permeates
the entire supply chain.

19. Meaning of Quality as
It Moves through Stages
Stage One - To be successful:
1. Products must conform to standards
or
2. Meet customer specifications and
possess features the customer wants

20. MEANING OF QUALITY AS
IT MOVES THROUGH STAGES
 Stage Two: Emphasizes that quality is more
than a technical specialty and that pursuit of
quality should drive the entire business core’s
processes.
 Overall value is determined by the service
rendered, product performance and products’
price relative to competitors.

21.  Stage Three: Buyers focus on market-
perceived quality and value verses
competitors’ offerings with the objective of
“not only zero product defects” but “zero
customer defections.”
 The objective is to have a cadre of suppliers
that can produce quality products that keeps
customers LOYAL!

22.  Sustainability is an emerging megatrend that is
transforming the competitive landscape, forcing
companies to change the way they think about
products, processes, and business models
 Sustainability is a “mother lode” of organizational
and technological innovations that yield both
bottom-line and top-line returns. Becoming
environmentally friendly lowers costs because
companies end up reducing the inputs they use
 In addition, the process generates additional
revenue from better products or from new
businesses
22

23.  Companies that excel in sustainability do “old
things in new ways” such as outperforming
competition on regulatory compliance and
environment-related cost management.
 Leading performers also do “new things in new
ways” such as redesigning products, processes,
and whole systems to optimize natural resource
efficiencies across their value chains.
 Sustainability innovations transform core
businesses and even lead to the creation of new
businesses and new sources of differentiation
 GE’s “Ecomagination” initiative provides a rich
illustration of the powerful growth opportunities
23

24. What Value Means to Business Customers
Customer Value
Benefits
Sacrifices
Core
Add-on
Price
Acquisition
costs
Operations
costs
Source: Adapted from Ajay Menon, Christian Homburg, and Nikolas Beutin, “Understanding Customer Value,”
Journal of Business-to-Business Marketing, 12, no. 2 (2005), pp. 4–7.

25. Benefits & Sacrifices
 Benefits:
1. Core – requirements a product must possess
for a relationship to exist.
2. Add-ons – attributes that create
differentiation & provides more value than
competition.
 Sacrifices:
1. Price
2. Acquisition costs (e.g., ordering costs)
3. Operations costs (Can defect free parts really
lower operation costs?)

26. What matters most?
#1 - Add-ons: All qualified vendors provide equal
core, so add-ons are the differentiators, which
include:
a. Differing attributes
b. Relationships
c. Advice
d. Product support: Various Services –
Pre & Post sale
#2 – Trust
#3 – Attention to reducing customer costs

27. Product Policy
 Involves all decisions concerning…
◦ Product
◦ Services
…that a company offers.
 Proper product policy provides the
opportunity to attain and maintain a
competitive advantage by focusing
on core competencies.

28. Four Types of Industrial Product Lines
1. Proprietary/
catalog products
2. Custom-built
products
3. Custom-designed
products
4. Industrial
services

29. Industrial Product Line Defined
• Proprietary: Comes only in certain configurations and
are available in anticipation of orders. The product
decision is to add, delete or reposition it.
• Custom-built: Product(s) offered to meet one or a small
group of customers’ need. The product decision centers
on offering a proper mix of additional options.
• Custom-designed: Unique item is created to meet one
or more customers’ need. Product is defined in terms of
company’s capability, and consumer buys that
capability.
• Industrial service: Buyer buys company’s capability to
do certain task (i.e., maintenance, technical service or
management consulting).

30. Defining the Product Market
• Defining the product market is fundamental
to a sound product policy decision.
• Even if a company has a successful product, it
needs to always be on the alert to consider
alternative (technological) ways to satisfy
customer needs.
▫ This forces the company to be open minded
about product innovation.
▫ The keeps the company in touch with the
market.

31. 1. Customer function dimension.
Technological dimension
Customer segment dimension
Customer function dimension
1. Customer function dimension.
Value-added system dimension

32. Customer Function What functional benefits does the product/service
provide for the buyer?
Technological
Function
Are there alternative ways a particular function can
be performed?
(Example: Communications: cell phone, email,
pager, notebook computer)
Customer Segment Various customer segments have distinct functional
needs. What are they and how can they be served?
Value-Added System Many services are offered by competing “service
chain” of vendors. Sometimes they are separate,
but other times they merge their services to offer a
more overall competitive product.
(Example: Product provider (Apple) aligns with
service provider (Airtel) to offer a more efficient
product/service)

33.  Successful companies need to plan for both today
and tomorrow by assessing their products, their
markets and their customers’ future needs.
 This is done by understanding:
a. The present market and its future needs.
b. WHAT the future might offer, what problems might exist,
what products will solve them?
c. WHO are the:
 Undershot consumers
 Overshot consumers
 Non-consumers
d. WHY is that?

34. Marketing Plan for Industrial Products
 Having a strategic marketing plan for an
industrial product is most vital for a
product to be successful.
 One way to start is to develop a…
“Product Positioning” strategy.

35.  A product’s competitive position in
the market is referred to as the
product’s position.
 It is found by measuring buyers’
perceptions and preferences in
relation to competitors.
 The first question is: “What are the
determinant attributes that play a
central role in the buying
decision?”

36. Copyright © 2007 by South-Western, a division of Thomson Learning, Inc. All rights reserved.Developed by Cool Pictures and MultiMedia Presentations
Steps in Product Positioning Process
1. Identify relevant competitive products.
2. Identify determinant attributes that customers use to
differentiate among options and determine their preferred
choices.
3. From sample of existing and potential customers, collect their
ratings of each product on determinant attributes.
4. Determine own product’s current position versus competing
offerings for each market segment.
5. Examine fit between preferences of market segments and
current product position.
6. Select positioning or repositioning strategy.

37. Positioning or Repositioning Strategy
If change is needed, what strategy(s) should be
employed?
I. For some attributes the product manager may
want to:
a. Increase the importance of an attribute to the
customer
b. Increase the difference of their attribute to that
of their competitors (i.e., increased efficiency,
decreased cost, better training, etc.)

38. II. If the product is truly better than a
competitor’s but is not perceived that way,
product managers need to do a better job
of communicating the message to the
market to bring it in line with reality.
III. A product’s competitive advantage can be
advanced by improving its level of
performance on determinant attributes
that buyers emphasize.

39. Technology
 Discontinuous Innovations: Truly new
products that require the marketplace to
dramatically change their behavior with
the promise of gaining dramatic new
benefits.
 Examples:
o Cars replaced horse-drawn carriages
o Computers opened the doors to
revolutionary new products
o Internet changed the way we do
business

40. Innovation: Classes of Customers
 Technology enthusiasts
 Visionaries
 Pragmatists
 Conservatives
 Skeptics
 Laggards

41. Technology Enthusiasts - Innovators
Innovators:
a. Explore latest innovations
b. Possess a significant influence over
product perception by others
c. Usually lack resource commitments
d. Try things out but move on to new ideas
as they come about

42. a. These customers desires to exploit
innovation for a competitive advantage.
b. These customers are true
revolutionaries in business, but new
technologies need to be more
customized for this group (i.e.,
expensive).
c. Government visionaries have access to
resources but usually demand
modifications to the product that are
difficult for innovators to provide.

43. Pragmatists – Early Majority
These customers:
a. Make the bulk of technological purchases
b. Believe in technological evolution (not
revolution)
c. Seek products that have proven themselves

44. These customers are:
a. Pessimistic about receiving any benefits
from new technologies
b. A sizable group who are price sensitive
c. Reluctantly purchase technological
products to avoid being left behind

45. Skeptics - Laggards
• These are potential customers
• They are ever-present critics of hype
around new technology

46. Strategy for High Tech
Adoption
1. Put innovative products in the hands of
technology enthusiasts.
2. After a while visionaries will see the value of
the new technology and will begin to view it
in business terms.
3. New technologies usually enjoy a
honeymoon reception from enthusiasts and
visionaries, however sales begin to falter… a
chasm forms…

47. Chasm
 A Chasm is a period of time where sales falter (and
sometimes plummet) due to differences between
Visionaries and Pragmatists.
 Visionaries want change (revolution) whereas
Pragmatists want change (evolution). But
Pragmatists make most buying decisions in
organizations.
 Pragmatists are the gateway to the mainstream
market. If that chasm gap can’t be bridged, often
products become part of ancient history.

48. Strategies to Cross the Chasm
48
 One strategy to cross the chasm is for the
marketer to provide pragmatists with 100%
solutions to their problems using the new
technology.
 Too many companies only supply a part of a
solution. They are trying to be something to
all, not 100% to some. That is unacceptable to
pragmatists.
 Goal: Win a niche foothold with a small group
of pragmatists as quickly as possible … that
is what crossing the Chasm means.

49. Bowling Alley Strategy
 Each market is like a
bowling pin. The momentum
of moving one pin (with
good technology products)
successfully carries over
into surrounding segments.
 The bowling alley is where
mainstream market
segments begins to accept
the new product, but it still
has a way to go.
 Strategy: Win one niche,

50.  This strategy assumes a product has very
wide appeal. The seller’s strategy is to:
1. Move as quickly as possible in getting the
product out to the market.
2. Build distribution ASAP.
3. Drive price down to next lower price break
ASAP.
 This strategy demands product leadership,
operational excellence in manufacturing and
distribution.

51. Main Street
Once the mainstream has adopted the product,
the aftermarket phenomenon occurs:
a. Mass marketers of the products begins to subside.
b. Competitors force supply to exceed demand.
c. Prices fall.
d. High tech product becomes a commodity.
e. Profit growth can no longer come from selling the
commodity.
f. Profit can only come from extending the platform of the
product to other niche-specific needs.

52. Thank You
52