This publication is broken up into three sections:
TL;DR - For those wanting a quick take
Summary - For those wanting a bit more context and high level points
Article - Main body of work containing full detailed article and explanations that you might want to consume over several readings
TL;DR
Modern product packaging and positioning of a value proposition is inspired from the ideas of Theodore Levitt of Total Product and later built onto by Phillip Kotler with his Whole Product Experience concept.
The challenge in product packaging is to align to organisational strategy and execution to make sure that your organisational and product strategies co-evolve with eachother.
There is a strong link between product packaging and product branding strategy. A lack of internal product packaging coherency can often be seen and felt in external communication efforts.
In the real-world a single organisation, depending on their history or strategy, could have a variety of product packaging models i.e., Microsoft have the Windows Operating system which is a platform and the Office productivity suite which is in integrated package suite. Microsoft Teams is another example of a Platform solution that Microsoft are developing to become the default way for large enterprise teams to manage their work
To package a product well there are some critical workstreams that are required like:
Research across market, product and client segments
Segment your user groups into distinct segments
Target specific customer segments
Position your offer to targeted customer segments
Summary
Great product packaging enables strategic product positioning. Poor packaging can weaken your ability to differentiate and position your organisation’s offers in the marketplace. Positioning refers to the place that a brand (company, product or person) occupies in the mind of the customer and how it is distinguished from products from competitors.
Modern product packaging and positioning of a value proposition is inspired from the ideas of Theodore Levitt of Total Product and later built onto by Phillip Kotler with his Whole Product Experience concept.
The Whole Product Experience involves viewing your product as more than the collection of its features, but rather as everything involved with the experience customers have with your product. Consider all the touchpoints your customer will have with your product.
The challenge in product packaging is to align to organisational strategy and execution to make sure that your product and organisational strategies co-evolve with eachother.
There is a strong link between product packaging and product branding strategy. A lack of internal product packaging coherency can often be seen and felt in external communication efforts.
In the real-world a single organisation, depending on their history or strategy, could have a variety of product packaging models i.e., Microsoft have the Windows Operating system which is a platform and the Office productivity suite which is in integrated package suite. Microsoft Teams is another example of a Platform solution that Microsoft are developing to become the default way for large enterprise teams to manage their work.
To package a product well there are some critical workstreams that are required like:
Research - Supporting market, product and customer research showing exactly where you plan to play as an organisation and where significant opportunity or value pools exist?
Segment - Accurately segmenting the market based on user needs, one way to do this is focusing on jobs to be done or more traditional methods like demographics or, psychographics or, geographic or behavioral/needs-based segmentation
Target – Once you have segmented the groups of paying customer segments then you can target the various segments with relevant value proposition/s and supporting messaging
Position - In the positioning phase, you can introduce competing companies and brands to the mix to determine where you stand against them when looking at the chosen segments. It should help in focusing your value proposition more clearly and whether you need to think about it again.
Article
What is a product?
"Products are almost always combinations of the tangible and the intangible. An automobile is not simply a machine for movement visibly or measurably differentiated by design, size, color, options, horse-power, or miles per gallon. It is also a complex symbol denoting status, taste, rank, achievement, aspiration, and (these days) being “smart”—that is, buying fuel economy rather than display." - Theodore Levitt
In an earlier post I mentioned that I would unpack some of the ways and typical considerations that go into how products can be packaged. Great product packaging enables strategic product positioning. Poor packaging can weaken your ability to differentiate and position your organisation’s offers in the marketplace. Positioning refers to the place that a brand (company, product or person) occupies in the mind of the customer and how it is distinguished from products from competitors. The objective of positioning is to occupy a clear, unique, and advantageous position in the consumer's mind.
In a sense you could argue that strategy, execution, marketing, sales, distribution and operations are all linked through how we package up, position and deliver our value propositions.
Modern product packaging and positioning of a value proposition is inspired from the ideas of Theodore Levitt of Total Product and later built onto by Phillip Kotler with his Whole Product Experience concept. The Whole Product Experience and Total Product approaches focus not just on the product features, or a singular customer experience, but the end-to-end experience over the lifetime of a customer.
The Whole Product Experience involves viewing your product as more than the collection of its features, but rather as everything involved with the experience customers have with your product. To develop your Whole Product Experience, start at the core – what are the real benefits that your customers expect to receive or experience from your product? Then expand your thinking to consider all aspects of the customer’s experience, from purchase, first use, experienced usage, maintenance, add-ons, and accessories, even to how the product may be replaced or upgraded. Consider all the touchpoints your customer will have with your product. Jobs to be done theory does a great job in being able to make this thinking explicit through structured product innovation.
As an aside, marketing when done well is a strategic function that can at the highest levels inform and influence organizational strategy and execution.
"The way a company manages its marketing can become the most powerful form of differentiation. Indeed, that may be how some companies in the same industry differ most from one another. Brand management and product management are marketing tools that have demonstrable advantages over catchall, functional modes of management. The same is true of market management, a system widely employed when a particular tangible or intangible product is used in many different industries. Putting somebody in charge of a product that’s used the same way by a large segment of the market (as in the case of packaged detergents sold through retail channels) or putting somebody in charge of a market for a product that’s used differently in different industries (as in the case of isopropyl alcohol sold directly to manufacturers or indirectly to them via distributors) clearly focuses attention, responsibility, and effort. Companies that organize their marketing this way generally have a clear competitive advantage." - Theodore Levitt
Please re-read the above quote, there are many gems and insights on how marketing can enable manging for value.
The above quote from Theodore Levitt shows that organizing around and for value can take many forms: e.g., organizing around client segments, organizing around products, organizing around markets and geographies. Modern companies like Meta formerly Facebook is known for organizing around these categories i.e., Global Products like Facebook, WhatsApp, Instagram etc., Client Segments like Financical Services, eCommerce, Retail etc. and by Geography like EMEA – Europe, Middle East and Africa etc.
To create a Whole Product Experience, the feature set needs to be comprehensive and satisfy all personas involved in your value streams. For example, having a robust repertoire of customer focused features in your app, without tooling like a search feature for your contact center staff agent desk to answer customer queries swiftly, can dent your Whole Product Experience.
How features are packaged into a coherent and cohesive offer is the main outcome from product packaging. The other outcomes of packaging are to help to carve out a position that is differentiated from what other competitors are offering.
What are the different ways that you can package a product
There are principally four ways to package your products:
A few examples of the different approaches to packaging software products are listed below.
Product Line:
Description: A range of similar products introduced and sold by the same company
Goal: To develop an ever-expanding product line and product mix that can target a variety of client segments
Level below Product Line: Product lines are made up of sub-products
Pros: Provide an organisation with a flexible mechanism to create product derivatives that can be targeted at specific client segment needs
Cons: Potentially large product portfolio that needs to be actively managed for value and increased cost complexity
Product Portfolio:
Description: A flexible collection of loosely coupled products from one company
Goal: To develop an expanding product portfolio mix that can target a variety of client segments
Level below Product Portfolio: Independent and/or loosely coupled Products or Applications
Pros: Allows for flexible development of products that can be sold in a stand-alone fashion
Cons: Developing stand-alone products that do not provide a cohesive and coherent offering and experience
Product Suite:
Description: A fully integrated product with everything in one box from one company
Goal: Provide a single integrated product suite that has all the required functionality in a single solution that is ‘closed’
Level below Product Suite: Integrated Products
Pros: Provide an all encompassing solution with pre-packaged capabilities supporting very specific use cases
Cons: Integrated offering may not have fit for purpose product capabilities across all required client dimensions
Platforms:
Description: Technology system that provides a foundation on which modular and specialised products can be developed on the system which also allows for integration of products from 3rd party
Goal: Develop an eco-system where 3rd parties develop new innovations within the defined platform
Level below Platform: Modular functionality and 3rd party modules or applications
Pros: Ability to allow various customer consumption or configuration patterns and also allows you scale through 3rd party development
Cons: Requires serious commercial, product management, technical, engineering and development expertise to build a scalable and reliable platform
Additional challenges and considerations:
The challenge in product packaging is to align to organisational strategy and execution to make sure that your product and organisational strategies co-evolve with eachother
There is a strong link between product packaging and product branding strategy. A lack of internal product packaging coherency can often be seen and felt in external communication efforts
In the real-world a single organisation, depending on their history or strategy, could have a variety of product packaging models i.e., Microsoft have the Windows Operating system which is a platform and the Office productivity suite which is in integrated package suite. Microsoft Teams is another example of a Platform solution that Microsoft are developing to become the default way for large enterprise teams to manage their work
HubSpot started off being a CRM Suite but have been evolving their strategy to begin offering more of a platform level type of Solutions
Product packaging is not static but a dynamic issue that requires organisational leadership
The above additional considerations show that product packaging is not a trivial exercise but is highly strategic work that if done well can create serious leverage through organisational alignment by developing shared understanding.
Steps to package a product?
To package a product well there are some critical workstreams that are required like:
Research - Supporting market, product and customer research showing exactly where you plan to play as an organisation and where significant opportunity or value pools exist?
Segment - Accurately segmenting the market based on user needs, one way to do this is focusing on jobs to be done or more traditional methods like demographics or, psychographics or, geographic or behavioral/needs-based segmentation
Target – Once you have segmented the group of paying customer segments then you can target the various segments with relevant value proposition/s and supporting messaging
Position - In the positioning phase, you can introduce competing companies and brands to the mix to determine where you stand against them when looking at the chosen segments. It should help in focusing your value proposition more clearly and whether you need to think about it again.
PS. If you are moved please leave feedback so I can improve the publication and topic coverage
Post Script
If you have a solid product taxonomy, supporting markectecture and positioning framework you are in a good place to choose how you want to package your products.
#productmanagement #brandmanagement #marketmanagement #product #productpackaging #productline #productsuite #productportfolio #productplatform
Resources
Five Product Levels by Phillip Kotler
Marketing Success through Differentiation by Theodore Levitt
Review on Crossing the Chasm by Geoffrey Moore