CHECK OUT THE EVENT PRESENTATIONS!

Conference and Forum,

October 18, 2012

Willbrook Platinum Convention Center,
Bucharest, Romania

Essentials of Product Development Strategy

Colin Shea
Vice President for Strategy, Planning and Regulation, Vodafone, CZ

Colin is a Marketing Wizard! He mixes bold pricing with innovative leading edge services and… Presto! Cool services that customers can’t get enough of. Find out how this strategist goes against the wave, use the ‘basic’ and transforms it into the ‘compelling’ and …generates revenues in the process.

We asked Colin how does one know when the product development strategy is the right one? How much is too little and how much is too much? How do you know if you’re developing products fast enough? Enjoy this article and come to meet Colin for more insights at Leaders in Marketing on Oct 18, 2012, in Bucharest.

Make Innovation core to your value proposition
One of the most important choices for a company to make is to what degree product development and innovation is core to its value proposition. It is not a strategy to be taken lightly; meaningful product development means meaningful investments in technology, people, and customer insights. It is not necessarily bad to be a fast follower, or even a slow follower in some cases. However, what definitely does not work is claiming to be an innovator or product leader but dimensioning as a follower.

As an example, I know of one company which at the beginning of a major product development initiative begins with 16 teams creating concepts – 12 internal and 4 external agencies. This is gradually narrowed down over a series of contests to 8, then 4, 2 and finally 1 winner.

Through each stage the level of detail progresses from conceptual sketches to 3D renderings and eventually to full-size, semi-functional models. The board of directors is intimately involved in this process and makes the final decisions at later stages. When one thinks about the time involved in this and the inefficiency of it, it’s incredible – by definition 90% of the work is wasted. Yet the final product is fantastic and justifies the investment.

Apple is of course an obvious case of this; they have a tiny portfolio compared to Nokia in the handset segment for instance, yet they command 9% of volume in terms of units shipped, 36% of revenue and 74% of industry profits. On the network infrastructure side, Huawei was able to develop superior products to its European competitors and has doubled its worldwide market share in 4 years.

The role of Brand Communication
This is not to say it’s always the winning strategy. It would be difficult to argue that Philip Morris really makes a better cigarette, Starbucks a better cup of coffee or Nike a better running shoe than their competitors to the point that it justifies the price premium these brands enjoy.

A good combination of communications, branding, packaging and customer experience can sustain a brand and product for many years. In such cases, product development can be a hygienic factor which merely illustrates the conviction of brand values – for instance the ‘Nike + iPod’ product has not really changed the essential product in a meaningful way but does important things in terms of communicating brand values and affinities.

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