MarketSense

Product Marketing Primer for CEOs

In my last post I introduced the different facets of marketing. Today we will delve into the product marketing specialty.

Product marketing has two focuses:

1. The buyer
2. The product

Role of Product Marketing on Your Team

A product marketer is your internal expert on both the product and the buyer. Put another way, product marketing is the expert on your product from the buyer perspective. In this role, product marketing should act as a buyer advocate.

Product marketing should be the first marketing person you hire. He/she is going to lay the foundation for all of your marketing efforts. Product marketers are invaluable in helping design a new product with market appeal. Ideally, you should hire your product marketing position at the same time you are hiring your product team.

Top 5 Responsibilities of Product Marketing

1. Identify and profile the target buyer

If your definition of a target buyer looks like "everyone in the United States" or "anyone who wants insert-key-feature-here", you need product marketing. These definitions of buyers tell you absolutely nothing useful about the buyer. If you were to pursue individuals in these segments, it would cost you a fortune.

A product marketer should produce detailed profiles (buyer personas) for individuals most likely to purchase your product. These profiles help the entire team get inside the head of the buyer. They also help marketing communications (marcom) find and target these buyers.

As part of the profile of the target buyer, product marketing should map out the prospects' buying process. This enables all members of the team (product, sales, marketing, customer support) work in a way that helps the buyer reach their destination - a successful purchase with you.

2. Develop the value proposition

Do your list of product benefits read like a features list? Are you promoting generic concepts like "higher productivity" and "improved efficiency"? These "values" will not engage your buyer.

Product marketing will identify and quantify the predominant value that will be realized by a buyer. They will do this in relation to your stiffest competition. They will use this value proposition to position your business in a way that most effectively captures your buyers. Communicating value is the most important message product marketing creates.

3. Determine how best to compete in the marketplace

Chances are your product team thinks your product is the best thing since sliced bread. We all drink our own kool aid. This is why you need product marketing.

Product marketing's job is to maintain objectivity about your product in the marketplace. The way product marketing does this is via competitive analysis. Product marketers compare your product against other products and your business against other businesses - the very same products and businesses the buyer might consider.

Part of that competitive analysis ends up in the value proposition. Another part of that competitive analysis ends up in your messaging. And the third part of that analysis ends up in your business strategy. SWOT which stands for "strength, weakness, opportunity, threat" helps your business understand how to maximize the market situation to gain the most market traction.

4. Create your marketing messaging

Simply defined, marketing messaging is: the words you use to compel interest in and understanding of your product in the market place. The person who understands your buyer, your product, your value, and your marketplace is the best person to create these communications. Product marketing is this person.

I like to say that a product marketer is a universal translator. They take product knowledge and translate it into compelling communications to a variety of different audiences: the buyer, sales, the product team, the executive team, partners, etc.

This means that your product marketer must be an excellent writer and an outstanding communicator. Marketing communications cannot pick up the slack for a poor product marketer. Junk in, prettier junk out.

5. Set your Product Pricing

Who in your organization sets the real price that the buyer pays for your product? If the answer is sales, then you have a problem. We incent sales to do whatever it takes to get the deal. Even if that deal doesn't make sense for us. The results are money left on the table and bad customers (customers who cost us more than we get from them).

Product marketing's responsibility is to match the price with the value and then conclusively justify it to the buyer. It is product marketing's responsibility to train the sales team on how to extract that price on the right deals.

There are a host of other things product marketing does which aren't in my top five responsibilities. They include:

• Product packaging
• Go-to-market (product launch) planning and execution
• Sales training, tools, and support
• Business modeling

Who Should Product Marketing Report to?

The best way product marketing works in your organization is as a team with other marketing professionals. I've seen product marketing under engineering. I've seen product marketing under marketing. Product marketing organized with other marketing professionals creates a cohesive, tight knit organization that can respond quickly to market situations.

When product marketing reports to engineering, you get engineering-driven marketing (which is not marketing at all) instead of buyer-driven marketing. In engineering-drive marketing, the objectivity and buyer knowledge which are product marketing's most valuable assets are ridiculed, minimized, and disregarded.

Invest in Product Marketing like you Invest in Your Best Engineer

Hopefully, this post gives you some insight into product marketing's role and responsibilities for your organization. Just like other job roles, you will find excellent, talented product marketers as well as mediocre product marketers. You get what you pay for.

Surprisingly,I am not going to advise you to invest in the best product marketer you can afford. Most businesses don't want to anty up the salary it takes to get a strong product marketer in-house. This is because businesses don't understand the value a skilled product marketer brings to the business bottom line.

Instead, I suggest that you look at investing in product marketing in the same way you look at investing in your lead product engineer.

The success of your business will be directly related to the quality of the product marketing person you hire and your team's ability to let him/her be the expert.

Marketing Primer for CEOs

For a CEO who comes from a background in sales or engineering, marketing can seem like a deep, dark hole where one throws money and never sees it returned. And there are so many different types of marketers. How can a non-marketer distinguish between them all?

Today's post begins a series introducing CEOs and other executive team members to marketing. We'll define what marketing is, what value marketing delivers to an organization, when to bring in marketing for maximum effect, and the best ways to measure marketing.

Philip Kotler, one of the leading authorities on marketing, in his classic text Marketing Management defines marketing management as:

the process of planning and executing

the conception, pricing, promotion, and distribution

of ideas, goods, and services

to create exchanges

that satisfy individual and organizational objectives

Because the job of marketing is so comprehensive, marketing orients itself around two specializations.

1. Product marketing

Focuses on product, pricing, placement and promotion for an offering (product or service). Product marketing usually owns the strategy for the product including feature prioritization and packaging selections (bundling).

2. Marketing communications

Focuses on the communication of the offering (product or service) to the set of target audiences that make up the market. Marcom is involved in all of the activities that drive awareness and promotion of the product - advertising, branding, direct marketing, and public relations.

If an organization is large enough and the product portfolio extensive enough, these two categories further specialize. For instance, you might have an outbound product marketing person who focuses on the target audience relationship and messaging. Or you might have a brand manager who focuses on developing awareness and recognition for an image or brand.

Smaller businesses often group both marketing positions together. Larger businesses often organize product marketing with the product engineering teams and marketing communications with a corporate team.

The Value of Marketing

So, why do I need marketing anyways? We have engineers that know all about the product. We have sales guys who educate and sell the prospect on the product. We've even hired a web guy to create a presence for our company and product on the Internet.

There is one big reason why you need marketing.

Effectiveness

Without marketing ...

• Your engineering team can create a product. But how do you know there are prospects who will buy it? Just because you build it doesn't mean they will come.
• You can set a price you think is fair for your product. But how do you know whether there are prospects willing to pay that price for it? Price must relate to value.
• You can search for prospects who are interested in your product. But the time and cost of finding those prospects using a hunt and peck method could bankrupt your business.
• You are having great conversations with prospects. But it takes them forever to make a purchase decision. They aren't compelled to buy and you don't how to change that.

Yes, your engineers can write data sheets and web content. Of course, you can ask your sales team to do their own lead generation.

But would you have a plumber do your electrical work? Probably not.

For the most critical activities, you want an expert -- someone who specializes in just that type of work. Just because marketing may seem like common sense, doesn't mean that it is.

Good marketers are a combination of scientist, artist, universal translator, and psychologist. Good marketers are experts just like engineers and sales and finance and human resources. You can go-to-market without a marketer. But you aren't going to get very far.

Channel Differentiation - a Retail Buying Experience

Sometimes I get so frustrated with how retailers handle their different channels. Case in point...

Last weekend I headed out to a local retail clothing store to look for a birthday present for my brother. While I was shopping in the store, I noticed a lovely top for myself. It came in two colors. I was interested in purchasing both colors, but the store only had one color in my size.

Since I had already been looking through the direct mail catalog the retailer had sent, I knew that they have both a catalog and an on-line channel. I figured that I would simply go home and order the item on-line when I ordered my brother's birthday present. With free shipping, this seemed the perfect solution.

The perfect solution until I got home and tried to create my order in the on-line channel.

Channel distinction or channel competition

1. First, I found that the discounts currently available at the store were not to be found on-line.

We are talking about 20% off a number of items. The savings was not insignificant for my order. Now I was forced to consider whether it was worth my time and effort to return to the retail store to purchase and receive the discount. The store was 20 miles away.

The retailer's solution - call in the order rather than complete it on-line. The customer order specialist could apply the store discount to the discounted items. Note that this was not publicized anywhere. Store sales associates in two different stores gave me different instructions.

2. Next I discovered that the top I was interested in was not carried on-line.

It took me 10 minutes of searching to reach this conclusion. I learned later that this top was a "store only" item. This was the first time I had run into this situation and frankly, the practice surprised me. The reverse is often true. Catalogs and on-line stores routinely carry more items than the stores do. Limited retail floor space drives this channel distinction.

The retailer solution - call a retail store, have the sales clerk locate the top in my size in another store, call that store and purchase over the phone, have the purchase shipped to me.

If it weren't for the fantastic women (store sales woman and phone order agent) who were dedicated to helping me achieve my goals, this could have been a disasterous buying experience.

But it begs the question, why is the retailer creating cross-channel angst in a business it controls? Aren't there enough challenges competing against other retailers? Why must the retailer create competition in its own channels? This makes absolutely no sense to me.

Buyers determine their channel preferences.

Today's technologies have enabled buyers to seamlessly cross from channel to channel while in their buying process. Buyers set their own preferences.

I prefer to shop for and purchase clothing in retail stores where I can see, size, try on and touch the clothes.

My friend Jennifer prefers to shop for clothes from the comfort of her home. She buys most of her clothes on-line.

Buyers aren't going to be bullied into shopping a non-preferred channel because of distinctions a retailer makes amongst its channels. Indeed, retailers that make these arbitrary channel distinctions (from the buyer perspective) are taking both the risk of losing the sale and the risk of losing the customer.

Channel competition costs sales and customers

In this competitive buying environment, that risk just doesn't make sense.