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Product Strategy
By Julie Gerstein
Dec 28, 2005, 16:00
As any successful business owner will tell you, a key business decision is the level of service and product you’d decide to provide. Of course, most business owners will immediately say that they want to provide the highest level of both product and service, but that may not be realistic. You may not have the capital, space or staff to run your “ideal” business. Further, your “ideal” business may not be the right fit for the community in which you intend to set up shop.
You need to choose a product and business strategy. You can be a balue provider, similar to companies like Wal-Mart and Southwest. Both companies are industry leaders in providing low-cost products with adequate service and quality. The WalMart customer is most likely not the same customer as a Nieman Marcus client, where high quality goods and service are the norm. Nor are either markets necessarily innovative companies, such as Sony, in which the goal is to produce new and cutting edge products.
Your products need to be in line with your business goals. Consider what you hope to achieve and make sure that the quality of products and services you provide is in line with the prices you’re charging and your bottom line revenue goals. For example, if you own a health food superstore (think Whole Foods) your products must be good quality and good value, because anything not perceived as a good value will not sell. But if you run a boutique health store with less shelf space, but higher quality products and service, your customers have self-selected themselves as people who are willing to pay a little bit more for exclusive or hard to find items.
Make sure that if your products cost more, you find a way to justify it to your customer base (by offering stellar customer service or exclusive offers). Otherwise, you’ll end up with hundreds high end products collecting dust on your shelves!
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