moduel 2.2 cracks in the prodcut centric approach

Why products alone are no longer enough

For decades businesses won bu creating better products and selling more of them

The logic was simple :-

Build a great product → sell it → grow

Today that advantage is becoming weaker

The lecture explain why traditional product-centric model is under pressure and why many companies are moving towards customer centricity & sloution-based businesses

What’s changed product advantages don’t last long anymore

Past

If you created a great product :-

• Competitors needed years to copy it

• You enjoyed a long competitive advantage

• You could dominate the market

Today

technology allows competitors to copy innovations very quickly

Example :- a smartphone company launches a new features

Within months :-

• Competitors A copies it

• Competitors B copies it

• Competitors c sells it cheaper

Your advantage disappears

Marketing insight :- innovation is still important but innovation alone is no longer enough

Customers are smarter than ever

Why?

The internet changed everything

Before buying customer can :-

Read reviews

• Watch youtube videos

• Compare prices

• Ask communities

• Research alternatives

Old customers :- reiled on the sales person

Modern customers :- often knows almost as much as the sales person

Business impact :- you can no longer win through information advantage alone

You most provide

• expertise

• Trust

• better experiences

• Better solutions

Global competition is everywhere

Past :- local competitors were the main threat

Today :- a competitor can emerge from anywhere

Example :-

• China

• India

• Europe

• Usa

Customer can order products with just few clicks

Result :- product protection becomes harder

Marketing insight :- your real competition is often not the shop next door anymore

Commoditisation is happening faster

What is commoditisation ?

When products become so similar that customers see little difference between them

Example :-

Usb cables

Most people don’t care who made them

The cheapest acceptable option wins

Business problem

When products become commodities

• Price fall

• Margins shrink

• Competition intensifies

Dangerous position

If customers only compare price:-

The cheapest player usually wins

And that’s a difficult game

Why companies are moving towards solutions

Instead of selling products :- companies increasingly sell solutions

Product thinking :- we sell printers

Solution thinking :- we help business manage documents

Notice the difference

• The Customers doesn’t want a printer

• The customer wants documents printed efficiently

IBM:- example

Old IBM

Sold :- computers , hardware , equipment

Product centric

Focus:- selling machines

Modern IBM

Focus :- consulting , it solutions , business transformation , cloud services

Customer - centric

Focus :- solving business problems

This makes IBM harder to replace than a hardware manufacturer

Rise of bundle value

Customer increasingly want:-

Not just a product

But:-

• Product

• Services

• Support

• Education

• Convenience

All together.

Example fitness industry

Customer don’t want a treadmill

They want :-

• Weight loss

• Better health

• Motivation

• Coaching

The treadmill is only one part of the solution

Important shift :- From seller to trusted advisor

Old role :- sales person

Goal:-sell products

New role

Trusted advisor

Goal:- Help customers achieve outcomes

Example :-

A perfume sales person says:-This perfume has 120 ML and last eight hours

Trusted advise says :- This fragrance works well for formal events and give sophisticated impression

The second approach solve a customer need

The new competitive advantage Data

This is one of the most biggest lessons in the lecture

Traditional companies:-

Had limited customer knowledge

They knew :-

• products sold

• Revenue earned

Not much else

Modern companies

Can track:-

• Browsing history

• Purchase history

• Preferences

• Repeat purchases

• Customer journeys

Results:- Companies can understand customers at deeper level

Why data matters?

Data Help answer :-

• What do customers want ?

• When do they buy ?

• Why do they leave ?

• What should we offer next ?

This enables customer - centric business models

Example imagine you launch watch brand

Product centric approach

Thinking

• Better materials

• Better movement

• Better design

good, but competitors can copy these

Customer - centric approach

Thinking :-

• Who is buying maybe

• Young professionals

• Fist time luxury buyers

• Entrepreneurs

What do they really want not just a watch

They want :- achievement status, confidence, identity.

Now you are.building :- Content community styling advice, membership perks events

This is much harder to copy

What smart modern brands understand?

Customer don’t wake up wanting products

Customer wake up wanting ;-

Solutions, outcomes, experiences, emotions

The products are simply tools to achieve those goals