Product Development & Management – Adapting to Local Market Needs
MIT’s Sloan School of Management’s business journal says “knowing what consumers want from a product – is often ignored.” Businesses focus on product designs that are irrelevant to customer buying decisions leading to situations in the words of the late Peter Drucker, “the customer rarely buys what the business thinks it sells them.”
Over the past 12 years, Bain & Company has conducted global management studies to assess management trends among companies around the world and of different sizes to assess what tools seem to work best to improve the bottom line and their strategic position in the marketplace. The most recent study was completed in 2005.
Its results are eye-opening and a good reminder to associations as we assess our own approaches to improved productivity and efficiencies. Some highlights include the following:
Executives are becoming more customer-centric – they felt they do not know enough about their customers, with nearly two-thirds of survey respondents agreeing with the statement “insufficient customer insight is hurting our performance.” They also indicated they aren’t doing a good enough job of satisfying the customers they have.
Innovation is the next big challenge – Executives were concerned that there is an increase in the commoditization of goods and services all over the world . Over three-quarters believe that a growing percentage of the goods and services they offer “behave like commodities,” while 56% say they should “focus more on revenue growth and less on cost reduction.” Over 86% of respondents believed that “innovation is more important than cost reduction for long-term success.” Yet 73% of executives admitted they were not doing enough to support innovation.
Alas when asked what tools and techniques they commonly used to stimulate revenue growth and strategic positioning to enhance customer-centricity or stimulate innovation, executives indicated that investment in CRM (customer relationship management) and market segmentation were not meeting these needs. New approaches in “open market innovation,” “mass customization” and “customer loyalty” were being far under utilized to spur customer intimacy and innovation, despite data that showed that companies who pursued “open market innovation” as a major strategy were significantly more satisfied with their results than those who didn’t.
So What Can Associations Learn from This?
If US associations want to buld and sustain growth in specific regional markets, we need to develop systems and processes that can ensure that products are designed and delivered according to the needs of that market rather than selling them what we have to sell. How can we do this?
Involve the members and customers in product development in the region at various points along the product development process.
Ensure the core value proposition for the product or product portfolio captures the local customer’s point of view and is solutions (or outcome) oriented.
This section on product development and management will showcase “real world” examples of how associations are adapting product to local markets by developing a global strategy and driving it through to the customer via appropriate regional and local delivery systems.
- New Practitioner-focused events opened new audience segments linking research to practice professionals to deliver new revenue sources
- A localized publishing strategy publication sales and order processing infrastructure grew a year over year growth of hundreds of thousands of dollars
- Targeted product design and promotion improved exposure and recognition of a professional certification program
- A regional management system from sales to service delivery strengthened the ability to serve thousands of regional product consumers
- A global product assessment can identify opportunities for market entry and highlight audience needs and how to position products to serve it