Products and Services

In addition to marketing, the sales department and throughput, sales depend to a large extent on innovation, on product management and finally on the product itself. Every market-oriented strategy must produce suitable products or services which provide customers with the expected benefits from which the willingness to pay for the market service and thus its value result.

Not only must this benefit in itself, but you must also communicate it to your target customers. The product is a result of marketing and must therefore be communicated via marketing.

The benefit and value of products that can be standardised can be estimated relatively well. For example, we know quite precisely what we get and for what price when we configure a BMW 5 series. For a plant that is to be designed and built for a specific application, we no longer know this so precisely. We have to rely on contracts in which the specifications and delivery conditions are agreed.

Assessing the benefits and value of services is even more difficult, especially when it comes to services that cannot be standardized. Consulting services are an example of this. You agree to pay for information whose benefits and value you cannot know in advance. Substitutes for the quality of the service still to be provided are the reputation of the consulting firm, perhaps comprehensible references, or the trust you have in the people providing the services to you. Game theory provides useful approaches for this. Especially the self-commitment according to Thomas C. Schelling is very helpful.

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