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Types of products that consumers are more likely to buy from a small company

September 21, 2019

Introduction
Companies want to stay relevant and innovative and often look at other successful companies, hot industry trends or new shiny products for inspiration. However, a vital component to growth is at every businesses' fingertips to their customers. Customers are the one with the ability to determine your business' longevity and progress.

US consumers are choosing small businesses because of the personalized experiences they provide compared with larger businesses. According to April 2014 data from AYTM Market Research, personal service was the No. 2 reason US internet users preferred small businesses vs. large companies, cited by 52.7%. This trailed supporting the local economy (56.2%), but it led all other options by at least 23 percentage points. Lower prices did not play a huge role in choosing small businesses. In fact, 61.2% of respondents said they would pay higher prices to support small businesses.


An August 2013 study by Web.com and Toluna found similar results. The factor that US consumers considered the most important when choosing small businesses over other types of businesses was customer service (86% of respondents). Personalized and intimate experiences as well as small businesses’ understanding of customers’ needs were also popular, each cited by 84%.
Web.com/Toluna found that US consumers and small-business decision-makers were relatively aligned when it came to characteristics they associated with small businesses, but the latter tended to focus more on what went into building the company. Unsurprisingly, a focus on the customer was the top characteristic cited by consumers. Meanwhile, small-business decision-makers stressed the fact that businesses of this size were owner-operated and accountable.


As small-business decision-makers focus on building committed businesses that are easy and friendly to work with, they’re creating personalized, customer-focused environments—and drawing consumers in as a result.


"You've got to start with the customer experience and work backwards to the technology," Steve Jobs notably stated. "You cannot start with the technology and try to figure out where you are going to sell it." Although the importance of being a customer-centric company is not a new concept, the right steps to achieve a customer service focus are still hazy.

A customer need is a motive that prompts a customer to buy a product or service. Ultimately, the need is the driver of the customer's purchase decision. Companies often look at the customer need as an opportunity to resolve or contribute surplus value back to the original motive. An example of customer need takes place every day around 12:00 p.m. This is when people begin to experience hunger (need) and decide to purchase lunch. The type of food, the location of the restaurant and the amount of time the service will take are all factors to how individuals decide to satisfy the need.

Below are the most common types of customer needs, most of which work in tandem with one another to drive a purchasing decision.


Most Common Types of Customer Needs for product
1. Functionality
Customers need your product or service to function the way they need in order to solve their problem or desire.

2. Price
Customers have unique budgets with which they can purchase a product or service.

3. Convenience
Your product or service needs to be a convenient solution to the function your customers are trying to meet.

4. Experience
The experience using your product or service needs to be easy or at least clear so as not to create more work for your customers.

5. Design
Along the lines of experience, the product or service needs a slick design to make it relatively easy and intuitive to use.

6. Reliability
The product or service needs to reliably function as advertised every time the customer wants to use it.

7. Performance
The product or service needs to perform correctly so the customer can achieve their goals.

8. Efficiency
The product or service needs to be efficient for the customer by streamlining an otherwise time-consuming process.

9. Compatibility
The product or service needs to be compatible with other products your customer is already using.

10. Empathy
When your customers get in touch with customer service, they want empathy and understanding from the people assisting them.

11. Fairness
From pricing to terms of service to contract length, customers expect fairness from a company.

12. Transparency
Customers expect transparency from a company they're doing business with. Service outages, pricing changes, and things breaking happen, and customers deserve openness from the businesses they give money to.

13. Control
Customers need to feel like they're in control of the business interaction from start to finish and beyond, and customer empowerment shouldn't end with the sale. Make it easy for them to return products, change subscriptions, adjust terms, etc.

14. Options
Customers need options when they're getting ready to make a purchase from a company whether small or big and offer a variety of product, subscription, and payment options to provide that freedom of choice.

15. Information
Customers need information, from the moment they start interacting with your brand to days and months after making a purchase. Business should invest in educational blog content, instructional knowledge base content, and regular communication so customers have the information they need to successfully use a product or service.

16. Accessibility 
Customers need to be able to access your service and support teams. This means providing multiple channels for customer service. If companies can begin to make changes before their customers' needs aren't fulfilled, this can ultimately lead to growth, innovation, and retention.

Definition
Product type is a group of products which fulfill a similar need for a market segment or market as a whole. Product type can also be defined as set of common specific characteristics in products or goods.
OR
Product is a good, commodity or sometimes a service which is produced by company or an individual and can be sold in a marketplace through a contract between a buyer and a seller. Products have a certain usage associated with them which can result in completing a need or a want.



What is customer need analysis?
A customer needs analysis is used in product development and branding to provide an in-depth analysis of the customer to ensure that the product or message offers the benefits, attributes, and features needed to provide the customer with value. To conduct a customer needs analysis successfully, you need to do the following:

1. Customer Needs Analysis Survey
The customer needs analysis is typically conducted by running surveys that help companies figure out their position in their respective competitive markets how they stack up in terms of meeting their target customers' needs. The survey should primarily ask questions about your brand and competitors, as well as customers' product awareness and brand attitudes in general.

Questions can include:
  • Questions about positive and negative word associations with your brand.
  • Questions asking customers to group your brand in with similar and/or competing brands.
  • Questions comparing and sorting brands according to their preferences for usage.


2. Means-End Analysis
Once you've conducted the customer needs analysis survey, you can use the answers to get a fuller picture of the reasons why your customers purchase from you, and what makes your product or service stand apart from your competitors'. A means-end analysis analyzes those answers to determine the primary reasons why a customer would buy your product. Those buyers’ reasons can be divided into three main groups:

1.      Features: A customer buys a product or service because of the features included in the purchase. If the customer were buying a computer, for example, they might buy it because it's smaller and more lightweight than other options.

2.      Benefits: A customer buys a product or service because of a benefit, real or perceived, they believe it will offer them. The customer might also buy the computer because it syncs easily with their other devices tirelessly.

3.      Values: A customer buys a product or service for unique, individual values, real or perceived, they believe it will help them fulfill. The customer might think the computer will help them to be more creative or artistic and unlock other personal or professional artistic opportunities.

As you might imagine, these reasons for purchasing something can vary from customer to customer, so it's important to conduct these customer surveys, collect the answers, and group them into these three categories. From there, you can identify which of those motivating factors you're solving for, and which you can improve on to make your product or service even more competitive in the market.


Types of Customer Service
The communication channel your team uses to respond to customer needs plays a major role in their ability to resolve problems. Some customer needs are time-sensitive and require immediate interaction via phone or chat. Others are less critical and can be resolved at a more casual pace. Let's break down the types of customer service and how each optimizes your team's ability to fulfill customer needs.

Email
Email is one of the most fundamental forms of customer service. It allows customers to fully describe their problems and automatically records the conversation into a resourceful thread. Customers only have to explain their issue once, while reps can reference important case details without having to request additional information. Email is best used with customer needs that doesn't need to be resolved right away. Customers can ask their question, go back to work, and return to the case once the service rep has found a solution. Unlike phones or chat, they don't have to wait idly while a rep finds them an answer.
One limitation of email is the potential lack of clarity. Some customers have trouble describing their problem, and some service reps struggle to explain solutions. This creates time-consuming roadblocks when the issue is overly complex. To be safe, use email for simple problems that require a brief explanation or solution.   

Phone
When customers have problems that need to be answered immediately, phones are the best medium to use. Phones connect customers directly to reps and create a human interaction between the customer and the business. Both parties hear each other's tone and can gauge the severity of the situation. This human element is a major factor in creating delightful customer experiences.

Phones come in handy most when there's a frustrated or angry customer. These customers are most likely to churn and require your team to provide a personalized solution. Your team can use soft communication skills to appease the customer and prevent costly escalations. These responses appear more genuine over phones because reps have less time to formulate an answer.  

The most common flaw with phone support is the wait time. Customers hate being put on hold, and it's a determining factor for customer churn. In fact, more than a third of your customers won't return to your business if they hang up while on hold. This is why your phone channel should be reserved for problems that require immediate, hands-on support.

Chat
Chat is one of the most flexible customer service channels. It can solve a high volume of simple problems or provide detailed support for complex ones. Businesses continue to adopt chat because of its versatility as well as the improvement in efficiency it provides for customer service reps.

When it comes to solving customer needs, chat can be used to solve almost any problem. Simple and common questions can be answered with chatbots that automate the customer service process. For more advanced roadblocks, reps can integrate customer service tools into their chat software to help them diagnose and resolve issues.

The limitations of chat are similar to those of email.  However, since the interaction is live, any lack of clarity between the two parties can drastically impact troubleshooting. As a former chat rep, there were plenty of times where I struggled to get on the same page as my customer. Even though we resolved the issue, that miscommunication negatively impacted the customer's experience.

Social Media
Social media is a relatively new customer service channel. While it's been around for over a decade, businesses are now beginning to adopt it as a viable service option. That's because social media lets customers immediately report an issue. And since that report is public, customer service teams are more motivated to resolve the customer's problem.

Social media is an excellent channel for mass communication, which is particularly useful during a business crisis. When a crisis occurs, your customers' product and service needs become the primary concern of your organization. Social media is an effective tool for communicating with your customers in bulk. With a social media crisis management plan, your team can continue to fulfill customer needs during critical situations.
Social media is different than other types of customer service because it empowers the customer the most. Customers tend to have more urgent needs and expect instant responses from your accounts. While this type of service presents an enormous opportunity, it also places tremendous pressure on your reps to fulfill customer demand. Be sure your team is equipped with proper social media management tools before you offer routine support.

In Person
As the oldest form of customer service, you're probably familiar with working in person with customers. Brands who have brick-and-mortar stores must offer this service for customers living near their locations. This fulfills a convenience need as customers can purchase and return a product without having to ship it back to the company through an online service.

In-person customer service is great for businesses with strong service personnel. Without dedicated employees, your customer service team won't be able to fulfill your customers' product or service needs. Successful teams have reps who are determined to provide above-and-beyond customer service.
There's no "best" type of customer service. When used together, each medium compliments the other and optimizes your overall performance. This creates an Omni-channel experience for your customers which will
keep them coming back for more.




How to Solve for Customer Needs
What stops customers from meeting their needs with your services or products? The first step to solve a problem is to put yourself in your customer's shoes: If you were the customer when we purchase your goods, use your technology, or sign up for your services, what would prevent you from achieving ultimate value?
  • Offer consistent company wide-messaging.
  •  Provide instructions for easy adoption.
  • Ask customers for feedback.
  • Nurture customer relationships.
  • Solve for the right customer needs.

The following list includes common customer pain points and proactive steps to develop customer-first values.

1. Offer consistent company-wide messaging.
Too often customers, get caught up in the "he said, she said" game of being told a product can do one thing from sales and another from support and product. Ultimately, customers become confused and are left with the perception that the company is disorganized.
Consistent internal communications across all departments is one of the best steps towards a customer-focused mindset. If the entire company understands its goals, values, product, and service capabilities, then the messages will easily translate to meet the customer need.
To get everyone on the same page, organize sales and customer service meetings, send out new product emails, provide robust new employee on boarding, require quarterly training and seminars, or staff host webinars to share important projects.

2. Provide instructions for easy adoption.
Customers purchase a product because they believe it will meet their needs and solve their problem. However, adoption setup stages are not always clear. If best practices aren't specified at the start and they don't see value right away, it's an uphill battle to gain back their trust and undo bad habits.
A well-thought post-purchase strategy will enable your products or services to be usable and useful.
One way companies gain their customers' attention is providing in-product and email breakthroughs and instructions as soon as the customer receives a payment confirmation. This limits the confusion, technical questions, and distractions from the immediate post-purchase euphoria.
A customer education guide or knowledge base is essential to deliver proper customer adoption and avoid the ‘floundering effect' when customers are stuck. Other companies provide new customer on-boarding services, host live demos and webinars and include event and promotions in their email signatures.

3. Ask customers for feedback.
Lean into customer complaints and suggestions and it will change the way you operate your business. Criticism often times has negative connotations, however, if you flip problems to opportunities you can easily improve your business to fit the customer's needs.
Take customer suggestions seriously and act on those recommendations to improve design, product and system glitches. Most customer support success metrics is paramount to the customer experience and this mentality should trickle down to every aspect of the organization.
To keep track of this feedback, many companies track and gain their feedback through customer satisfaction scores, customer surveys, exploration customer interviews, social media polls, or simply a personal email can grab helpful candid customer feedback.

4. Nurture customer relationships.
When a customer buys a product or service, they want to use it right away and fulfill their immediate need. Whether they are delighted within the first hour, week, or a month, it's important to constantly think about their future needs.
Proactive relationship-building is essential to prevent customers from losing their post-purchase excitement and ultimately churning. If customers stop hearing from you and you don't hear from them this can be a bad sign that their lifespan is in danger.
Companies solve for customer relationships with a combination of customer service structure and communication strategies. Solve for the long-term customer need and create a customer service team dedicated to check-ins and customer retention, show appreciation with rewards and gifts to loyal customers, host local events, highlight employees that go above and beyond and communicate product updates and new features.

5. Solve for the right customer needs.
Excluding customers from your cohort of business can seem counter intuitive to solve for your customers' needs. However, understanding whose needs you can fulfill and whose you cannot is a major step toward solving the right problems. All customers' needs can't be treated equally and a company must recognize which problems they can solve and ones that aren't aligned with their vision.
To find the right customer priorities, create buyer personas and uncover consumer trends, look at customer's long-term retention patterns, establish a clear company vision, provide premier customer service to valuable customers and communicate with your ideal customer in their preferred social media space to capture questions, comments and suggestions.
Successful startups, brick and mortar shops, and Fortune 500 companies alike all solve and prioritize customer needs to stay ahead and establish industry trends.

Product types on the basis of their features
  • The differentiated product: These are the products that are diverse from other products that fall in the same product category. The differential claim may either be a real distinction on quality, ingredient, service etc., or it may be psychological distinction created through sales promotions.
  • The customized product: These are tailor made products to fulfill customers need. These products demand high level of customer engagement for product designing.
  • The augmented product: These products are created after adding extra features to the product by manufacturer to improve the value of the product. These changes are nor expected by the customers nor suggested by them.
  • The potential product: Potential product is tomorrow’s product which has all the possible improvements and refinement. There is no limit to it, only a firm’s technological ability could limit it.




Six essential elements of a product marketing strategy

1. Product
It may be obvious, but the first step to developing a strong product marketing strategy is making sure you have a strong product. Before you even start putting together your strategy, you need to make sure the product is created with the customer in mind and aligns with their needs.

People don’t want to just buy things, they want to solve their problems. So, ask yourself what problem your product solves for the customer. How will it make their lives better? Answering these questions will help you determine the right messaging for promotion down the road.

The value your product provides is more important than its capabilities. In other words, you should focus more on the benefits of your product, rather than its features. Each feature should be developed for a purpose and provide some benefit to the customer. You should have an innovative product, or at least one that solves a common business challenge.

2. Audience
Just like your product needs to be created with your audience in mind, your strategy should also be created with your audience in mind. To do that, you need to truly understand the individuals in your audience and know everything you can about them.
Start by doing some research and gathering any information you can about your intended audience, such as:
  • Age
  • Gender
  • Marital status
  • Education
  • Profession

Better yet, interview your customers. Set up phone calls or meetings and ask them about their preferences. Listen to how they talk and the language they use. This can help form your narrative.

According to Cintell, high-performing companies are 2.3 times more likely to research their buyers’ drivers and motivations. Any information can be helpful in uncovering your audience’s preferences and how best to market your product to those individuals. Once you have all your information gathered, start building buyer personas.

You’ll probably discover some patterns among your audience. These commonalities can be grouped together to create buyer personas, or an archetype of what your ideal customer looks like and how they behave. This way, you can focus on marketing to one buyer persona at a time, rather than to your whole audience.

3. Messaging
It’s not enough to just think about your audience through product development. You need to communicate with your audience. According to Customer Thermometer, 57 percent of consumers feel trust when they’re emotionally connected to a brand, and that emotional connection is built through your messaging.
Your product messaging should be built around a narrative. Narratives are the easiest way to get your audience to connect with your product because they are relatable and will resonate with your audience.
To craft an effective story, you need to identify your product’s unique selling proposition. What is the main value for the user? Hone in on one key message that will drive your narrative.

4. People
Developing and promoting a product requires a multi-team effort. However, keeping multiple teams on the same page is no easy task. Product marketers need to be the bridge between sales, marketing, engineering, and development. They need to bring the teams together and make sure everyone is on the same page.

According to The Chartered Institute of Marketing, only 35 percent of marketers believe they understand their role in delivering a branded customer experience. It’s the product marketer who is responsible for educating and informing the entire team and organization to ensure everyone knows their part.
With so many people working on one project, it’s easy for miscommunication and disorganization to derail your progress. A product road-map can bring all the teams and internal stakeholders into alignment.

The product road-map provides a summary of the entire product marketing plan and guides the team on what will happen in each step of the process. With this document, you can maintain visibility throughout the entire project and ensure all those involved know what’s going on.

5. Promotion
Having a great product and well-thought-out strategy isn’t where the work stops. You can’t expect your audience to flock to purchase your product if they know nothing about it. You need to get the word out through strategic promotion.

According to CEB, 58 percent of consumers have tried a new brand in the last three months that they didn’t even know about a year ago. Because those brands invested in promotion, those customers were able to learn about them.

Your promotion plan needs to get your message in front of the right audience at the right time. If you’ve done your research and built your buyer personas, you should have no problem identifying the right audience.
But timing is also important. Besides researching your audience, you should also be doing research on the market overall. You need to ensure you have a strong product-market fit and that your launch is timed well to be the most effective.

Communicating through the right channels is also important. Look to where your audience spends time, and include a mix to reach different segments of your audience. Your promotion plan could include:

You should promote your product through the channels that make the most sense for your brand and audience. Make sure you plan your promotion well in advance to ensure everything runs smoothly once you’re ready to launch.

6. Analysis
Your product marketing strategy needs to be just that – strategic. You can’t expect your strategy to have perfect results, and you need to be tracking those results to learn from them.
The Chartered Institute of Marketing finds that only 48 percent of marketers are consistently measuring brand, customer-related, and non-financial metrics of success. If you’re not measuring, how will you know how to improve?

Once you’ve implemented your promotion plan and your product has gone to market, you need to watch and listen to find out how successful you are. Focus on several key metrics to track, such as email clicks, website form submissions, reach, share of voice, and, of course, conversions.

Look at both what did well and where you went wrong. If possible, adjust your strategy as you go along, using the lessons you learn to guide your product marketing strategies in the future.



Types of product category
A product category is a type of product or service. Product categories are typically created by a firm or industry organization to organize products. This can include a hierarchy of categories that resemble a tree structure. Alternatively, product categories can be a flat structure such as a list of product types.
The common type of product category are as follows:
  • Industry: Such as technology or hospitality.
  • Functionality: Such as accounting software or running shoes.
  • Customer needs: Such as summer verses winter tires.
  • Customer preferences: Such as healthy ingredients or particular style like organic tea, punk music.
  • Demographics: In some cases demographic is considered a product category such as children’s goods or women’s clothing.
  • Convenience: Such as fast moving consumer goods and fast foods.
  • Quality: Quality level, such as economy verses business class flights.
  • Performance: Such as city bicycle versus racing bicycle.
  • Premium: Premium features and production methods such crafts production. For instance premium beer verses regular.

Overview of product category
Type
Products
Definition
A type of product or service
Related concepts
Fast moving Consumer Goods: https://simplicable.com/new/fmcg



Advantages
A product benefit is the value that customer realize from a product or service. They are expressed in terms of customer needs, expectations, requirements, and motivations. It is a fundamental rules of marketing and sales that consumers are typically more interested in benefits as opposed to the technical details or features of your product. 
The features of product benefits are as follows:
  • Objectives
  • Cost
  •  Convenience
  • Comfort
  • Usability
  • Productivity
  • Efficiency
  • Sustainability
  • Peak experience
  • Transformation
  • Style
  • Mobility
  • Risk Culture
  • Entertainment
  • Health and Wellness
  • Status
  • Value
  • Performance
  • Customer service
  • Durability
  • Quality
  • Availability
  • Peace of mind
  • Flexibility
  • Character
  • Sensory


Disadvantages
A great product doesn't automatically translate into profits. Some of the drawbacks include:
  • The customers may not be interested in what you're selling.
  • If you don't have an established reputation, customers may not trust you to deliver the goods.
  •  Product-oriented companies stand and fall on the strength of the product. It has to be first-rate.
  • The R&D costs for an ace product may be steep.
  • Making a profit on a first-rate product may require setting a higher price than the market will accept. 


Conclusion
Product differentiation leads to additional revenues and is the basis for conducting experiments for determining what products and product versions to introduce in the future include the following:
  • By adding additional versions, dramatically increases the present value of business.
  • Many large and small businesses, for reasons of simplicity, offer products using a one-price solution in order to have a simplified management agenda.
  • By adopting a one-price solution, companies overlook the high-end consumers and the premium prices that they will pay for a product.
  • A one-price solution also ignores the price-sensitive consumers who could be drawn into the market if an affordable option is made available.
  • If a high-end product is not perceived as being adequately differentiated with higher-end features and additional functionality, the low-end product could cannibalize the demand for the higher-priced product.
  • Two goods are independent if their consumption or use is not related. For example, cell phones and lawn mowers are independent goods.
  • Complementary goods are typically used together like toothbrushes and toothpaste.
  • Substitute goods have an equivalent function and one substitute good can be consumed or used in place of another. Examples are CD players and MP.3 players and cable TV carriers versus satellite TV carriers.
  • Companies have to be very cautious how they use price differentiation to personalize prices lest they incur the wrath of customers.
  • Information asymmetry occurs when the seller has better information about the value of a product than the buyer and vice versa.
  • Selling a product at a higher price in a market where consumers are not knowledgeable or privy to the true market price is called arbitrage.








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