A Quote by Peter Drucker
Suppliers and especially manufacturers have market power because they have information about a product or a service that the customer does not and cannot have, and does not need if he can trust the brand. This explains the profitability of brands.
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Your business should be defined, not in terms of the product or service you offer, but in terms of what customer need your product or service fulfills. While products come and go, basic needs and customer groups stay around, i.e., the need for communication, the need for transportation, etc. What market need do you supply?
Traditional sales and marketing involves increasing market shares, which means selling as much of your product as you can to as many customers as possible. One-to-one marketing involves driving for a share of customer, which means ensuring that each individual customer who buys your product buys more product, buys only your brand, and is happy using your product instead of another to solve his problem. The true, current value of any one customer is a function of the customer's future purchases, across all the product lines, brands, and services offered by you.
What the customer buys and considers value is never a product. It is always utility, that is, what a product or a service does for the customer.
Does the customer invent new product or service? The customer generates nothing. No customer asked for electric lights. There was gas and gas mantles, which gave good light.
Business is all about the customer: what the customer wants and what they get. Generally, every customer wants a product or service that solves their problem, worth their money, and is delivered with amazing customer service.
Nothing a housewife does is of value in capitalist terms because it does not take place on the market and therefore does not contribute to the Gross National Product.
A product is something made in a factory; a brand is something that is bought by the customer. A product can be copied by a competitor; a brand is unique. A product can be quickly outdated; a successful brand is timeless.
When you improve your product so it does the customer's job better, then you gain market share.
If you are ready to put a product or service on the market, look at that product or service and see how you can test it inexpensively. Keep in mind, you'll only need one; you don't need 1,000 to get the answer.
Quality in a product or service is not what the supplier puts in. It is what the customer gets out and is willing to pay for. A product is not quality because it is hard to make and costs a lot of money, as manufacturers typically believe. This is incompetence. Customers pay only for what is of use to them and gives them value. Nothing else constitutes quality.
Setting customer expectations at a level that is aligned with consistently deliverable levels of customer service requires that your whole staff, from product development to marketing, works in harmony with your brand image.
The most common way customer financing is done is you sell the customer on the product before you've built it or before you've finished it. The customer puts up the money to build the product or finish the product and becomes your first customer. Usually the customer simply wants the product and nothing more.
It's a very, very tough market.
So unless you do a really good job, you buy the right products from the manufacturers, you service the customer, they keep coming back, they bring their friends in, it's all about numbers, numbers, numbers.
I think, when I see entrepreneurs, they tend to talk about the market and the industry - which is obviously very important, but the most important thing is you're product. What are you selling? And does it really have product-market fit?
All the businesses from the beginning of history have struggled with product development (assuming there is a market, doing the market testing and so on). But now they start with customer development. Get the customer who says, "Yes. I want that. I need it. I wanna use it. I'll pay for it." And then you go back and work with your engineers. It is changing the world!
Repositioning a brand is never easy and rarely without pain. I believe the Urban brand is making the necessary changes that will allow it to more fully engage its traditional customer and return to solid profitability.
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