Why make product marketing decisions based on product life cycle and product portfolio structure?
Often when students begin to study marketing they expect to study promotion or perhaps only advertising, but product is the core of the marketing mix. Product defines what will be priced, promoted, and distributed. If you are able to create and deliver a product that provides exceptional value to your target customer, the rest of the marketing mix becomes easier to manage. A successful product makes every aspect of a marketer's job easier—and more fun.
Is it possible to offer a product that is so good it markets itself? Yes. When this is the case, marketers can employ something called viral marketing
, which is a method of product promotion that relies on customers to market an idea, product, or service themselves by telling their friends. Generally, in order for viral marketing to work, the product must be so compelling that customers who use it can't stop talking about it.
Let's look at an example of viral marketing and a successful new product that has changed transportation in cities around the world. How did the individuals who created the product at the beginning of its life cycle develop a winning product concept and take it to market?
Technically speaking, Uber is a ride-sharing solution—an incredibly successful one. The company launched in June 2010, and today Uber drivers provide well over one million rides each day to passengers around the globe. The company's self-reported annual revenue for 2018 was $11.3 billion.
When a passenger needs a ride, he simply opens the Uber app on his phone. He can immediately see the locations of cars nearby and request a pickup. The passenger knows which driver is coming and can track the car's location until it arrives. When the ride is over, the passenger's credit card is automatically billed for the service.
Bill Gurley, a seasoned investor who has put money in Uber, evaluates the company this way: "The product is so good, there is no one spending hundreds of thousands of dollars on marketing." Industry experts who have analyzed Uber's success agree again and again that Uber took on a problem that was real for many people—poor taxicab availability and abysmal service—and completely fixed it.
Among the many problems Uber is tackling are: poor cab infrastructure in some cities, poor service, and fulfillment–including dirty cabs, poor customer experience, late cars, drivers unwilling to accept credit cards, and more.
Uber set out to reimagine the entire experience to make it seamless and enjoyable across the board. They didn’t fix one aspect of the system (e.g. mobile payments for the existing taxi infrastructure); they tackled the whole experience from mobile hailing, seamless payments, better cars, to no tips and driver ratings.
By avoiding the trap of smaller thinking, and iterating on one element of the taxi experience (say, by making credit card payments more accessible in the car) they were able to create a wow experience that has totally redefined what it means to use a car service, sparking an avalanche of word of mouth and press.
Again, the product creates a "wow experience" that creates "an avalanche of word of mouth and press." That is the power of the product in the marketing mix.
- Explain what a product is and the importance of products in the marketing mix
- Discuss the product life cycle and its implications for marketing
- Explain product portfolio management and how it relates to the organization's marketing strategy and tactics
- Define the process for creating new products
- Identify the challenges associated with creating a successful new product
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