A Practical Guide to Combating Products and Services
A Practical Guide to Combating Products & Services
Summary:
This article revolves around the concept of hybrid solutions i.e., combining products and services into innovative offerings to attract more customers and provide superior value to them. The article identifies two basic characteristics of any offering- complementarity (when used together) and independence (used separately) based on which four types of hybrid offerings emerge. These are as follows:
i. Flexible Bundle: These bundles (of product and service) are characterized by high complementarity and independence and are best suited to complex products and services. Eg. Oracle software packages and its consulting and management services. ii. Peace-of-mind Bundle: These bundles are characterized by low complementarity and high independence and are best suited for customers who seek assurance and best-of-breed offerings. For example- OTIS elevators provide high quality elevator equipment with outstanding maintenance services that differentiates it from the other elevator companies and strengthen the brand.
iii. Multi-benefit Bundle: These bundles are highly complementary and dependent, they are inseparable. These create value to the customer by adding offerings added to the basic product/services.
iv. One-stop Bundle: These products involve low complementarity and independence and do not provide any additional value to its customers. They attract customers and increase profitability by simply making products/services available at the point of sale (centralized purchasing & scalability).
The article also gives four basic rules that are to be followed by marketers while developing an offering which are as follows:
Create points of differentiation in products and service markets: It involves careful examination of entry barriers in the target market. Some of the points that need to be considered are: (a) degree of commoditization of the product- if the product is highly commoditized one
Summary:
This article revolves around the concept of hybrid solutions i.e., combining products and services into innovative offerings to attract more customers and provide superior value to them. The article identifies two basic characteristics of any offering- complementarity (when used together) and independence (used separately) based on which four types of hybrid offerings emerge. These are as follows:
i. Flexible Bundle: These bundles (of product and service) are characterized by high complementarity and independence and are best suited to complex products and services. Eg. Oracle software packages and its consulting and management services. ii. Peace-of-mind Bundle: These bundles are characterized by low complementarity and high independence and are best suited for customers who seek assurance and best-of-breed offerings. For example- OTIS elevators provide high quality elevator equipment with outstanding maintenance services that differentiates it from the other elevator companies and strengthen the brand.
iii. Multi-benefit Bundle: These bundles are highly complementary and dependent, they are inseparable. These create value to the customer by adding offerings added to the basic product/services.
iv. One-stop Bundle: These products involve low complementarity and independence and do not provide any additional value to its customers. They attract customers and increase profitability by simply making products/services available at the point of sale (centralized purchasing & scalability).
The article also gives four basic rules that are to be followed by marketers while developing an offering which are as follows:
Create points of differentiation in products and service markets: It involves careful examination of entry barriers in the target market. Some of the points that need to be considered are: (a) degree of commoditization of the product- if the product is highly commoditized one