Session 9 - Managing Products for B2B Markets.pdf

b2b marketing session 9-10

1. Managing Products for
Business Markets

2. Agenda
Product-Line Foundations
Understanding product types and market definitions
Strategic Positioning
Creating differentiated positions in competitive markets
Technology Integration
Leveraging smart, connected products to transform your
business model
Strategic Decision-Making
Optimizing product features, capabilities, and data collection
This presentation will give you a structured approach to product-line management that balances current market needs with future innovation
opportunities. We'll conclude with implementation guidelines and common pitfalls to avoid.

3. The Four Types of B2B Product Lines
Proprietary/Catalog Products
Fixed configurations produced in anticipation of orders
Decision focus: Adding, deleting, or repositioning products
Custom-Built Products
Basic units with numerous accessories and options
Decision focus: Platform design and modularity
Custom-Designed Products
Created for one or a small group of customers
Decision focus: Unique specifications and capabilities
Industrial Services
Selling capabilities rather than physical products
Decision focus: Service design and delivery excellence
The product-line structure you choose directly impacts your development processes, sales approach, supply chain requirements, and profit
margins. Most B2B companies maintain multiple product-line types to serve different market segments effectively.

4. Defining Your Product Market:
The Four Dimensions
A clearly defined product market establishes the distinct arena in which
your business competes. This definition drives product development priorities,
competitive analysis, and market opportunity assessment.
Customer Function
What job does your product help customers accomplish?
Technology
What technological approach delivers your solution?
Customer Segment
Which specific customer groups do you target?
Value-Added System
Where in the supply chain do you operate?

5. Planning for Today vs. Tomorrow
Planning for Today
•Clear, precise definition of current business
•Focus on excellence in meeting existing customer needs
•Operational efficiency in current product markets
•Incremental improvements to existing offerings
•Deepening relationships with current customers
Planning for Tomorrow
•Redefining the business for future competition
•Identifying emerging customer needs
•Exploring adjacent or new product markets
•Developing breakthrough innovations
•Acquiring new capabilities and technologies
Successful B2B companies maintain this dual focus, optimizing current operations while systematically building capabilities for future
market opportunities. This balance prevents both short-term performance problems and long-term obsolescence.

6. Seeing What's Next: Three Customer Types
Nonconsumers
Lack specialized skills, training, or
resources to purchase your product
Opportunity: Simplification, training
programs, financial models
Undershot Customers
Find existing products are not good
enough for their needs
Opportunity: Performance
improvements, premium offerings
Overshot Customers
Current products provide more
performance than they can use
Opportunity: Simplified versions, cost
reductions, focused solutions
By systematically analyzing these three customer types, you can identify unmet needs and emerging opportunities before
competitors do. This framework helps prioritize R&D investments and new product development initiatives.

7. Product Positioning: The Foundation of
Competitive Advantage
Product positioning represents the place that a product occupies in a particular market; it is found by measuring
organizational buyers' perceptions and preferences for a product in relation to its competitors.
Effective positioning creates a distinct, valued place in the minds of target customers. For B2B products, positioning must
address bothrationalevaluationcriteria(performance specifications, ROI) andpsychologicalfactors(trust, reputation,
perceived leadership).
The strongest positions are those that competitors cannot easily duplicate or neutralize, creating sustainable competitive advantage.

8. The Six-Step Product Positioning Process
1
Identify Competitive Set
Map the relevant set of competitive products that target customers consider
2
Identify Determinant Attributes
Isolate the attributes that are both important and differentiating in
purchase decisions
3
Collect Customer Perceptions
Gather data on how customers rate each product on determinant attributes
4
Determine Current Position
Map your product's position versus competitors for each market segment
5
Examine Segment Fit
Analyze the alignment between segment preferences and current
positioning
6
Select Positioning Strategy
Choose a positioning or repositioning approach based on market
opportunities
This systematic process ensures that your positioning strategy is grounded in customer perceptions rather than internal assumptions, increasing the
likelihood of market success.

9. Understanding Determinant
Attributes
Determinant attributes are the cornerstone of effective product positioning. These
are the specific product characteristics that:
•Significantly influence purchase decisions - They carry high importance
weight in the evaluation process
•Differentiate competing offerings - Customers perceive meaningful
performance differences between alternatives
•Create preference patterns - They consistently predict which products
customers ultimately select
For industrial compressors, energy efficiency might be determinant in some
segments, while in others, maintenance requirements or noise levels might be
more determinant. Identifying these attributes requires direct customer research,
not internal speculation.

10. Three Strategic Positioning Opportunities
Increase Attribute Importance
Elevate the significance of attributes where your product excels
Example: A logistics software company highlighting security capabilities amid increasing cyber threats
Align Perceptions with Reality
Correct misperceptions when your performance exceeds perceived standing
Example: A manufacturing equipment provider using case studies to demonstrate superior uptime performance
Improve Performance on Key Attributes
Enhance capabilities on determinant attributes valued by target segments
Example: A cloud service provider increasing data processing speed to match customer priorities
The most effective positioning strategies often combine these approaches, creating a multi-dimensional advantage that's difficult for
competitors to counter on all fronts simultaneously.

11. Smart, Connected Products:
The New Competitive
Landscape
The technology revolution transforming
B2B product strategy

12. The Technology Foundation of Smart, Connected
Products
Cloud Computing
"A style of computing where scalable and elastic IT-related
capabilities are provided as a service to external customers using
Internet technologies"
Enables processing and storage of massive data sets without
local infrastructure constraints
Internet of Things (IoT)
"Connects devices such as everyday consumer objects and
industrial equipment onto the network, enabling information
gathering and management"
Creates continuous data streams from previously isolated
physical products
Big Data
Massive amounts of data collected over time that exceed
traditional database capabilities
Includes transactions, activity logs, and sensor data from
diverse sources
Big Data Analytics
Process of examining large data sets to uncover patterns,
correlations, trends, and actionable insights
Transforms raw data into competitive intelligence and
predictive capabilities

13. Four Capabilities of Smart, Connected Products
Monitoring
Track actual product usage patterns,
environmental conditions, and
performance metrics
Example: Industrial pumps reporting flow
rates, operating temperatures, and
vibration patterns
Control
Remote adjustment of settings, functions,
and personalization of user experience
Example: HVAC systems optimizing
settings based on occupancy and
environmental conditions
Optimization
Algorithm-driven performance
enhancement based on usage data and
environmental inputs
Example: Predictive maintenance
scheduling based on actual wear patterns
Autonomy
Independent operation with minimal
human intervention through integrated
capabilities
Example: Self-diagnosing equipment that
orders replacement parts automatically
These capabilities create a virtuous cycle: monitoring enables control, control enables optimization, and integrated capabilities enable
autonomy.

14. How Smart, Connected Products Transform
Marketing Strategies
1Enhanced Customer Insights
Real-time usage data reveals how products actually create value, enabling more precise positioning and
more effective value communication
2Sophisticated Segmentation
Rich data flows allow for micro-segmentation based on usage patterns, creating opportunities for
customized product-service bundles with value-based pricing
3Proactive Service Models
Performance monitoring enables predictive maintenance and service productivity improvements that
enhance customer satisfaction while reducing costs
These capabilities fundamentally shift marketing from periodic transactions to continuous customer relationships,
creating opportunities for ongoing value delivery and capture.

15. The Shift From Product-Based to Information-
Based Business Models
Traditional Business Model
•Engineering-led product development
•One-time product sales
•Separate service contracts
•Episodic customer interaction
•Limited post-sale visibility
•Reactive maintenance approach
•Value captured primarily at sale
Information Based Model
•Software and analytics integration
•Product as a service offerings
•Bundled performance guarantees
•Continuous customer relationships
•Complete usage transparency
•Predictive/preventive approach
•Value captured throughout lifecycle
This transformation requires significant organizational change, including new skills (software development, data science), metrics (recurring
revenue, customer lifetime value), and cross-functional collaboration between previously siloed departments.

16. The Product-as-a-Service Revolution
Smart, connected products enable manufacturers to retain ownership while charging customers for usage or outcomes, fundamentally
transforming the value proposition and business model.
Examples Across Industries:
•Rolls-Royce "Power by the Hour"-Aircraft engines sold as propulsion services with guaranteed uptime
•Xerox Print Management - Document production charged per page rather than equipment purchase
•Industrial Compressors - Selling compressed air by volume rather than compressor ownership
•Agricultural Equipment - Precision farming services with performance-based pricing tied to yield improvements
This model aligns manufacturer and customer incentives around maximizing performance and reliability while creating predictable revenue
streams.

17. Five Common Strategic Mistakes to Avoid
Feature Overload
Adding product capabilities that
customers don't need or value,
increasing costs without
proportionate benefits
Security Underestimation
Failing to adequately address data
privacy and system security risks,
potentially leading to breaches and
liability
Competitive Blindness
Missing emerging competitive
threats from non-traditional players
entering your market with disruptive
models
Implementation Delay
Moving too slowly and allowing
competitors to establish market
position and capture early adopters
Capability Overconfidence
Overestimating internal skills and
resources needed for successful
development and implementation
Regular strategic reviews with cross-functional teams can help identify these risks early, allowing for corrective action before they undermine
your product strategy.

18. Building Your Organization's Product
Management Capabilities
People
•Cross-functional product teams
•Software development expertise
•Data science capabilities
•Design thinking methodologies
•Agile project management
Process
•Customer-centric research
•Rapid prototyping cycles
•Continuous feedback loops
•Data-driven decision making
•Systematic feature prioritization
Technology
•Development platforms
•Analytics infrastructure
•Security frameworks
•Integration architecture
•Testing environments
Successful product management requires the integration of these three dimensions. Organizations must invest in developing capabilities
across all areas simultaneously rather than focusing on just one dimension. Most implementation failures stem from imbalances across these
three areas.

19. Implementation Roadmap: From Strategy to Market
1Market Definition & Segmentation
Clarify product market boundaries and identify target
segments with distinct needs
2 Competitive Positioning
Develop clear positioning strategy based on determinant
attributes and competitive analysis
3Capability Prioritization
Select product capabilities and features based on value,
segments, and positioning
4 Architecture Design
Determine optimal distribution of intelligence between product
and cloud
5Data Strategy
Identify critical data to collect and establish governance protocols
6 Go-to-Market Planning
Develop messaging, pricing, and channel strategies aligned with
positioning
This sequential approach ensures that upstream strategic decisions properly inform downstream implementation choices, creating alignment
across functions.