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December 4, 2008
Creating Value.
One of the jobs that marketing is often assigned, working in conjunction with product teams, is differentiation. In his ground breaking book "The Marketing Imagination" published a quarter century ago, Ted Leavitt outlined his "whole product" concept in the chapter titled "Differentiation -- Of Anything."
Today, beyond differentiation, we are increasingly focused on defining the "value" our products/services provide customers. This is especially important as you think about what constitutes the "whole product" as it moves through an independent channel of distribution, where distributors and dealers are going to be adding to the layers of value in the final purchased product.
This is part of the sad lesson of GM, Ford and Chrysler. For years, these behemoths lost sight of the "whole product"...the bundle of product, warranty, service, reliability, style, etc. that constituted their offering. They did little to help dealers define and establish value, to their detriment and the dealers'. Back in a 1999 study, Booz Allen consultants concluded that 86% of an autos value was created beyond the factory walls. But Detroit ignored that.
As better manufactured foreign cars moved into the market, and solicitous foreign car dealers focused on customer satisfaction, those "non-factory" factors became big differentiators. And, Detroit cars became easy prey.
The simple "whole product" diagram belongs on every serious marketers wall as a constant reminder of both the components of differentiation...and value.
Posted by jcioban at December 4, 2008 7:19 PM
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