Both the competitive matrix and profile approaches just described com- pare a product against its competitors along established factors. The typical objective is to improve attributes that are competitively weak.
What is generally missing is the internal cost of the specific factors.
Sometimes a product can be made more profitable by reducing the cost Figure 8.2 Competitive Matrix (Perceptual Map)
Easy to use
Product Y
Perceived as leader
Not perceived as leader
Difficult to use
Product Z
Product X
Product A
of unimportant attributes. If this also results in a price reduction, the result can be more value to the customer. Therefore, it is useful to add cost information to the perceived importance and competitive perfor- mance of each attribute, as shown in Figure 8.4.
Note that the first column of Figure 8.4 shows features and attri- butes of the product. These have to be converted to benefits in the sec- ond column. The average importance of each benefit to the market must be determined (through marketing research) or estimated (from informal customer input) and listed in the third column. The next col- umn indicates how well the product supplies the benefit relative to the competition. The final column indicates whether the cost of the related features is a significant proportion of the overall cost of the product.
Look for red flags in the table. The provision of benefits that are highly important to the market should be from features that are at least equal to or better than the competition in terms of performance. If that is not the case, the product manager should improve on those fea-
Figure 8.3 Comparative Product Scaling
High product consistency Inconsistent products
Strong technical support Weak technical support
Well-known brand Little-known brand
Timely delivery Inconsistent delivery
Fair prices Unfair prices
Easy to use Difficult to use
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Product A
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Product B Product C•
tures. If features provide benefits that are not important to the cus- tomer, the relative cost should be low. Otherwise, the feature should be eliminated or provided at as low a cost as possible.
This type of analysis should precede quality improvement and cost reduction programs. By working with teams from other parts of the company, the product manager can use value analysis, quality func- tion deployment, or other techniques to increase customer satisfaction without a commensurate increase in costs or maintain customer satis- faction while lowering costs.
It is important to continually rethink and redefine the product cre- atively to look for opportunities hidden behind the day-to-day grind.
(See Figure 8.5.)What would happen if some features were magnified?
For example, magnifying the screen on a television created a new mar- ket for home theater. Similarly, reducingthe screen created sports TVs.
What if a new feature replaced an old one? For example, Sony cre- ated the Walkman by replacing speakers with a headset. Can two exist- ing products be combined to provide one with more value to the customer? The minivan combined the advantages of a station wagon with those of a van. Sometimes two product managers can bundle their products together to create more value than selling either one sepa- rately to the customer.
Can certain elements be modified? This could include both prod- uct features and ancillary services. Sometimes industries become so embroiled in “that’s the way we’ve always done it” that modifications to sales approaches, contract terms, or other things are overlooked.
Figure 8.4 Costs and Benefits of Features Relative to the Market Importance
Features/ Importance to Competitive
Attributes Benefits Market Performance Relative Cost
Can the development process be reengineered to reduce the overall cost of producing the product or service? Can the traditional approach be changed: for example, can direct mail or the Internet be used as an alternative to the traditional method of distributing the product?
After identifying features that deserve detailed examination, the next job of the product manager is to benchmark these features against the
“best-in-class.” Start by finding out from salespeople, customers, and industry writings what company or product is recognized as best for the aspect under study. Then strive to uncover why it is perceived as best. For example, when Ford redesigned the 1992 Taurus, it benchmarked more than two hundred features against seven competitors. Door handles were benchmarked against the Chevy Lumina, headlamps against the Accord, and remote radio controls against the Pontiac Grand Prix.2
However, benchmarking should not be limited to the competition, and it does not have to be limited to product features. By improving processes used to deliver a product or service, it is possible to provide more value for the customer. Mellon Bank in Pittsburgh, for example, undertook a benchmarking project to improve its credit card billing practices. By benchmarking seven other companies, including an airline,
Figure 8.5 Rethinking Your Product
Magnify Minimize
Replace Combine
Modify Reengineer Change the rules
What if I . . .
they learned about techniques and software technologies to improve the process. After adopting several improvements, they cut outstanding complaints by half and were able to resolve problems in an average of twenty-five days instead of the forty-five days it took previously.3