Thomas
Goetz had an interesting article in the February 2017 issue of INC. titled
“Build Your Product for the Consumer, Not the Buyer.” Goetz is a co-founder and the CEO of Iodine,
a digital health startup based in San Francisco
His
example in the article is a mobile app for pharmaceutical companies to give to
customers who use their medicines. The
companies were buying and giving out the app, but the consumers were not using
it.
The
app was too complex. It had too many
features. The problem was solved by redesigning the app for the end user, not
the company buying the app.
This
is a common problem with product management.
Technology constantly changes, but the basics of business never
change. As business owners and managers,
we often have to get back to the basics.
It
is easy to make the mistake of designing a product for your sales staff,
wholesaler, retailer, or retail sales staff, and not the actual consumer or end
user. This can be explained because
people often get bored with selling the same thing all the time.
A
sales person will ask for something they don’t offer because they may have lost
a sale to a competitor. Trying to be
everything to everyone is also a major mistake.
A company must concentrate on what they do best.
Don’t
make the mistake of assuming your personal tastes are representative of the
market, but don’t ignore them either. Do
your market research. Starting a
business based on a perception of a product or service can be a huge
mistake. Sometimes test-marketing can be
easy and cost effective.
I
love to give a simple example about selling donuts. I used to stop at a convenience store on the
way to work when I was in the collector car business. My favorite pastry is a plain,
chocolate-covered cake donut.
This
store had about eight trays of pastries,
When I would stop they would invariably be out of chocolate-covered cake
donuts, yet the racks would be almost full.
Late in the afternoon, about a quarter of the pastries would still be
there and would have to be thrown away.
The
store manager wanted to have an extensive selection, but was not giving the
consumer what they wanted. I encouraged
the manager to increase the number of plain, chocolate-covered cake
donuts. He put in a full rack, then two
full racks, and eventually three of the eight racks were usually sold out in
the late morning. This product selection
was quite boring, but the customer was happy.
And the store realized more pastry sales, less waste, and greater
profits. That is product
management.
We
have a great bakery where I live now with an extensive selection, but they
don’t offer a plain chocolate-covered cake donut. I am sure this costs them business, but it is
great for the convenience stores that do offer the number one single pastry
consumers want.
For
more detailed information and examples of product management, market research,
and selecting the right product read my book, Business Fits. It is available on Amazon as an eBook or a
paperback.
God bless the United States of America America
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