Product/Service Management DECA Kpi's

KPI: Explain the concept of product mix.

A product mix consists of the various product lines offered for sale by a particular seller. A product line is an offering of several related products that are on sale individually. Essentially, a product mix is the collection of all products a business sells. Sometimes referred to as "product assortment", a true product mix has to do with the number of product lines offered, the number and types of products offered in each line, and the relevance of those products to the consumers who are presented with the opportunity to buy the products. In general, a company offering a wide product mix is less risky but usually has a lower profit margin. For example, profit margins for Walmart may not be high, but as long as the products have strong sales, the company will fare well. Conversely, a company that offers only a few products may be at risk.

KPI: Plan product mix

A product mix is the set of all product lines/items which a company offers to sell to consumers. They can be similar, such as dish washing liquid and perfumed hand soap or as different as personal care products and pet nutrition. Product mix decisions affect each line and normally influence the entire product mix. The four measurements to a company's mix generally include: Width: pertains to the number of product lines the company sells. For example, Clark's food stand sells fruits and vegetables; thus the product mix is 2. Length: is the total number of products or items in the company's product mix. For example, Clark's fruits are watermelon, apples, peaches and pears and his vegetables are cucumbers, tomatoes, beans and corn; thus the length of Clark's product mix would be 8. Depth: pertains to the total number of variations for each product. Clark's sells one variety of watermelon 2 varieties of apples, 3 varieties of peaches and 1 variety of pears; thus a total of 1+2+3+1 = 7 (depth of fruits.) Consistency: describes how closely the product lines are related to one another in terms of use, production and distribution. Clark's fruits are consistent in use, but may vary in distribution and production; thus Clark's line is not consistent. There are four avenues a company can utilize to increase its business based on the product mix decisions of width, length, depth and consistency, which are: Widen the product lines by adding new products. These new lines can benefit from and build on the company's reputation of is other current lines. Lengthening the existing product lines may result in a more full-line company and provide more of a chance to increase profits. Deepen the versions of each product line in the mix. Work to make consistency of the product lines more in line. Consistency can help decrease expenses. Decision making with regard to the product mix includes issues concerning the product's attributes (quality, features and designs), branding, packaging and labeling. Accurate labeling and packaging products is required by law and should contain certain minimum information to inform and protect consumers. Packaging also helps to create benefits as protection, economy, convenience and promotion. Branding the product line can increase the value of the product. Key branding decisions are based on the following questions: Should the company brand the product? Who will be the sponsor of the brand; manufacturer-owned or a licensed name? Planning the company's product mix requires making decisions which are in line with customer needs. These decision are more than a strategic issue which have impact on the success of the company, they are actually one of the most critical mechanisms a company has. Due to the fact that customer needs can change rapidly, these decisions must be an ongoing process; only then can the company provide the maximum value for the customers. New products can offer the company opportunities to add new sources of sales and profits.

KPI: Determine initial feasibility of product idea.

Business ideas for a product/service begin as impulsive thoughts which come to mind and never disappear. While there are many impulsive thoughts, the ones which become viable products and/or services are those which are unique enough to attract funding, are executed efficiently and pass the feasibility tests. Five important factors to consider concerning the feasibility of a business opportunity are listed below: Real demand: Market demand is the first factor which can make a business opportunity viable or feasible; Products/services must be able to solve a problem or satisfy a need. Good return on investment (ROI): The product/service must have the ability to show a good return on the investment; Thus not only must it be able to solve a problem or satisfy a need, it must do so at a profit. Competitive: Products/services must be competitive; unless of course, it's the first one of its kind. The owners who don't understand how to make and keep their products/services competitive, do not often make profits. Meet the company's objectives: Products/services to be considered viable or feasible must meet the company's objectives and be able to achieve them. The competence of the entrepreneur and his team: Competence of the team working on the feasibility of the product/service is essential. These individuals must have a strong commitment to the project, plus have the knowledge and skills to bring the idea to fruition. Whether or not a product idea has feasibility can best be determined by testing its strong or weak concept components. Not only will testing assist in making the product better or more relevant to the market, it helps eliminate frustration and economic tension before work on the product/service begins. A strong and dedicated team will look at different facets as they consider the viability of the business idea. They evaluate the purpose of the product/service to assess consumer behavior and purchasing habits. They work to identify their customer bases' needs and perceptions. The team looks at what resources the company currently has and what others will be needed for the project; every aspect is considered from the workfloor to the project's office supplies. Lastly, they will look at the growth potential for the project now and in the future. An efficient team will study the feasibility and then conduct research and testing before actually committing the company to produce the product/service. Different research studies a team could utilize are: Industrial Analysis Trend Analysis Financial Goal Analysis and Clarity Product Profitability An ultimate goal for the team and company is that the idea is profitable. Any negative effect on any of the company's stakeholders (shareholders, employees, creditors, suppliers, community and/or the government) is a red flag indicating the idea should be reconsidered before continuing or scrapping it altogether.

KPI: Evaluate customer experience

Businesses who measure the customer experience (CX) at all stages in which there is interaction, are known to be evaluating their customer's experience(s). Consumer-centric businesses work constantly to understand customer's needs and desires. Collecting and evaluating this CX information normally reveals whether the customer is satisfied or dissatisfied, and this information provides the business knowledge of how they can improve their quality of services. Customer service and experience are important for the company to be successful and make profits, but they are not the same thing. Customers today expect the company to give them more. They expect each action they have with the company to be the best experience possible. Therefore, it is essential for businesses to create consumer-centric strategies. A few of these strategies are: Clear customer experience vision: Develop a clear customer-focused vision which can be communicated throughout the business. This vision, once in place, will drive the behavior of the company and its employees. The company's customers: An important step to becoming a consumer-centric company is to build a customer support team whose job is to create customer personas. In order to totally understand what the customer's needs and wants, the team needs to be able to connect and empathize with situations the customers currently and potentially face. Create emotional connection with the customers: According to research from the Journal of Consumer Research, more than 50% of experience is based on emotion and these emotions drive decisions. Customer loyalty is attached to emotion and consumers remember how they felt when they used the product/service. Businesses which optimize the emotional connection outperform competitors by an 85% sales growth. Capture customer feedback in real time: Post-interaction surveys are easily delivered using a variety of automated tools through emails, social networks and phone calls. This information should be provided to the customer support team who can assign a particular support agent to each customer. Team development training: Identify the customer support group training needs. Schedule and track the teams development through coaching, e-learning and group training. Employee feedback action: Provide the customer support team project management software or social media tools, which can create a closed environment where the team can collect continuous feedback and review it for optimum customer-centric strategies. Measure the Return On Investment (ROI): Provide the customer support team with tools which they can gather information and be able to compare the delivery of great customer experience and the company's profits. Consumer-centric companies continually nurture their customers' experiences. By doing so, they realize customer loyalty, higher customer retention and increased revenues.

KPI: Identify internal and external service standards.

Companies classify their customers into two categories; external and internal. External customers are individuals who purchase the products/services the company is selling. Internal customers are co-workers within the business who depend on someone else or some other department for a product or service. For example, if computers have gone down in the sales department, they must contact the IT department to repair them so they can continue their work day. Businesses must consider their customer service and how it is expressed to both internal and external customers. They should incorporate the same sort of respect and compassion for both type of customers. Just as the external customer is seeking the best shopping experience, the internal employee who gets respect and a positive attitude from other workers will have a higher morale, and their work will reflect it. Not only will they be more respectful to their fellow employees, they will treat external customers with respect and congeniality. Businesses have service standards for both internal and external customers. The standards each business has depends upon the products/services it provides to the public and whether they are customer-centric or employee-centric. Following are examples of service standards of employee behaviors which can influence great customer service: External Greet customers in a welcoming and professional manner. Respond to customer needs and questions quickly and to the best of each employees' ability Thank the customer for doing business with the company. Provide customer with any detailed information concerning the status of any orders and whatever processes are relevant. During the entire customer interaction and sale process, provide professional and courteous service at all times. Encourage customer feedback and respond to feedback in a timely manner. Internal Be timely, courteous and provide service to the best of ability within the company's' guidelines. Co-workers deserve the same professional treatment as external customers. Use positive communication skills with fellow employees. Assist other co-workers, especially when working with external customers with accuracy and speed. Perform proactively to ensure the company's service standards are adhered to within the employees' abilities. In both categories the speed of responsiveness, along with any resolutions necessary to complete the transactions are extremely important. Both the external and internal customer are seeking superior customer service which they can report to others and make their experience a happy one.

KPI: Determine services to provide customers.

Customers today are seeking more than just the purchase of a product. Customers want a genuine shopping experience which indicates that the company cares they choose to shop at this particular store. Businesses must take the time to think beyond the sale, and focus on finding the solutions for delivering the type of services which benefit both the customer and the business. All businesses rely on the repeat customer. Research shows that, in an established business, repeat customers are responsible for generating approximately 40% of the store's revenue. Repeat sales are not accidental, they mostly happen due to the services the customer received by the business' staff. Repeat customers experience several things during their transaction; The employee knew the product and was able to answer the customers' questions. The employee was friendly, wore a smile and treated the customer with respect. The employee actually listened to the customer and asked for feedback when discussing the company's products. At the end of the day, the employee sent a thank-you note or email to the customer, thanking them for shopping at the store that day. Word-of-mouth (WOM) advertising is one of the most effective advertising tools a business can use and is a free marketing tool. Customers share their shopping experiences with others; whether it is good or bad; on average the customer will tell 3 individuals if they received good customer service, but will tell 11 if they received poor customer service. In order for the company to continue to sell to the repeat customer, they must provide excellent customer service. As a result of excellent customer service, they could also gain new customers. Research provides evidence that customers equate good customer service as part of the emotion in the purchasing process. Customers attest to paying more for a product/service if they feel they have received excellent service. The company is able to set itself aside from competitors if they emphasize excellent customer service as a part of its marketing strategies and mission. After they have implemented it in marketing and mission, they then must back it up! Backing it up means getting to know their customers needs and desires, staying in professional contact with the customer (after the sale) and training employees to provide the excellent service. The Marketing Sphere website states that normally when the business creates the work environment where excellent customer service is the standard, it leads to improved employee morale. Employees become eager to comply with the company's guidelines and, in turn, provide the customer with an improved shopping experience. Another important service the business must engage in is ensuring they make use of any customer feedback; whether it is positive or negative. It is extremely important the business regularly review any feedback they receive, identify any areas where they can improve and make necessary changes when and where they can. The business which understands the importance of excellent customer service, assures that customers are satisfied with the company's products/services, and work to provide an excellent shopping experience, will continue to grow and be successful.

KPI: Adjust idea to create functional product.

Moving the concept to a functional product/service can be intricate, include risks, is expensive and a time-consuming process. The process can be broken down into the following simple stages: The Idea. Part design and prototype development. Mold design, tool build and mass-projection. Assembly, packaging and logistics. Branding promotion and sales. Steps 1 and 5 can typically reap the most popular attention during the process, but steps 2-4 are the meat of the product development. In order to produce a successful product launch, the design must look good, be functional and work correctly. If these things are not in order the product may make it to the store, but it will not sell well. The first design and prototype may travel through a variety of changes before step 3 takes place. A successful product/service includes continually prototyping, tweaking, refining, making mistakes, learning, and repeating. A great tool to use to test and validate the product is consumer groups. Consumer groups provide feedback concerning the tweaking of the product, which is an important, natural part of the process. The company needs to include the validation and tweaking process in their business plans. Research is a vital part of ensuring the product will sell once it is ready for market. When the design and prototype development are in process, the company should research how it fits into the company's intellectual property. Patent, copyright, trademark, etc. should be terms the company's project team make themselves aware of. The research portion also allows the company to see what competition is in the market, what their target market should be and if the product is unique enough to have an edge to exist and excel in the market and provide profits for the company. Creating the product will eventually lead the company to discover what strategies the team is going to use to market the product. Consider creating the sales pitch which emphasizes the product/services' edge. In concept to reality as steps 1- 4 evolve, step 5 then becomes essential as the functional end product cannot be profitable without the branding, marketing and sales. The continual application of these steps make companies able to look forward to future innovations and profits.

KPI: Create processes for ongoing opportunity recognition.

Opportunity recognition means proactively brainstorming a new business venture or expansion idea. Individuals who utilize opportunity recognition constantly brainstorm new and improved ways to confront problems, whether it involves new products, new services or fulfilling needs or expectations of the consumer. With this process, entrepreneurial business owners constantly seek new revenue streams. Three significant factors which play a role in opportunity recognition are: Active search for opportunities engagement Entrepreneurs are more likely than other staff to engage in the active search for potentially untapped profit resources. These opportunities tend to be discovered through personal contacts and specialized publications. Searches must also be conducted carefully in order to succeed. Opportunities alertness Being alert to opportunities allows entrepreneurs the cognitive ability to recognize new product solutions to customer needs with existing information. Intelligence, creativity, optimism and a solid belief that favorable outcomes can occur are personal characteristics which can be linked to individuals with a high alertness capacity and in turn, to opportunity recognition. Prior knowledge of the market, industry or customers which allows for the basis for recognizing new opportunities in these areas. A solid base for opportunity recognition is knowledge, especially those involved with the market, industry or customers. Operating processes indicate that the broader the foundation knowledge, the more opportunities present themselves and the higher the quality of such opportunities entrepreneurs will tend to recognize. Rich and varied life and work experiences are major pluses for any entrepreneur in their ability to recognize potential profitable opportunities. Opportunity recognition is an initial step in the continuing process of feasibility and potential economic growth. A second step to be considered is teaching individuals to be more adept in recognizing opportunity chances; not only to be alert to opportunities or to search actively, but to also search in the best places and methods. Particularly, they should consider focusing efforts on identifying changes in technology, demographics, markets, and other relevant factors playing crucial roles in business success. For long-term viability and success, a company needs some ability to recognize opportunities. The most innovative company leaders who seize opportunities stay ahead of the competition in delivering progressive solutions to customers.

KPI: Build corporate brand

Product positioning and branding are included in product/service management functions. How consumers perceive a product or an entire company is highly important. A brand is a name, term, design, symbol, slogan, or another feature that distinguishes a firm from competitors. It also includes the brand promise created by and delivered by a company, suggesting a specific benefit of the brand. Branding occurs when an identifying concept is marketed so that it is recognizable by more and more people. Branding can be applied to an entire company or to an individual product or service. Brands are often protected from use by others through securing a trademark from the government. Think of different businesses you know, both big and small. What are the characteristics of their brand? When properly designed and managed, a corporation's image will accurately reflect the level of the organization's commitment to quality, to excellence, and to relationships with many entities - including current and potential customers, employees, and future staff, competitors, partners, governing bodies, and the general public.

KPI: Build product/service brand.

The foundation seen in a brand is its logo, packaging, and promotional materials that communicate the specific product/service to customers. A company's brand is their promise to their customers. It not only tells customers what they can expect from the company's products and/or services, but also what makes it different from the competitors. Defining a product's brand can be difficult, however, it is one of the most important aspects of product development and product positioning. At the very least, a business should answer: What is the company's mission? What are the benefits of our products/services? What do your customers and prospects already think of your company? What qualities do you want them to associate with your company? Key parts of a product/service brand include: Product Logo Messaging Tagline Marketing Materials Packaging and more.

KPI: Explain the role of customer service in positioning/image.

The purpose of positioning is to create a positive image of the business and its products and/or services that appeal to consumers. The goal is to set them apart from their competition. Businesses work to project a positive image in hopes of building a solid customer base. Companies who recognize the importance of projecting a professional image and maintaining excellent customer services attract and retain customers. The company's "Big Picture" encompases both its image and excellent customer service. A first-class front-line staff's ability to be proactive in their customer service can enable them to provide solutions which directly address key outcomes for the customer. The impact that excellent professional customer service can have on the business' overall success can be astronomical. Happy satisfied customers become repeat ones and in most cases convince their friends and family to shop at the business, which means new customers. New satisfied customers, along with an established customer base, mean a greater profitability. Since today's customer has many available options to express how they feel about products and services, companies must remember that every customer interaction affects their image and reputation. The company must educate and train their staff as to how important they are and, also how important it is they create the great customer experience (CX). The business' reputation cost aligns with customer service. They may spend a great deal on branding their product/service, but if the customer experiences poor service, the money is wasted. Today's customer does not have to leave their home to discover where good customer service exists--they have many "shopping" options. Customers who have had a bad experience can now speak about their dissatisfaction through social media sites like Twitter or Youtube. Companies must continually ask themselves, "What will be the financial and reputation cost if our company ends up in the poor service column on a social media site?"

KPI: Identify a company's unique selling proposition.

What a business stands for and what sets it apart from others is defined as its Unique Selling Proposition (USP). Normally, this means that the business stands for something specific and becomes what it is known for. An example is: UPS is a delivery service which is known for great customer service and deliveries from a brown truck. UPS stands for something specific; deliveries via a Brown truck, hence the slogan "What can Brown do for you?." A company's' USP can be whatever the company wants it to be; a unique product feature, company mission, excellent customer service or the brand's story. A USP is crucial in the lifecycle of the company's product/service and business. Noted process steps to achieve a USP are: Competitor analyzation. Reviewing the competitor's ads gives an insight of how the competitor wants to be perceived. This allows understanding of where the USP will help a business fit into a market. Consider the ideal customer; who are they, what are their needs which your product/service can fulfill, and how do they characterize themselves. Who is the individual in terms of needs and media consumption, what similar brands do they shop for, can this business influence the competitor's customers? These are questions needed to be able to build an audience for the product/service for the USP Brainstorm emotional concepts for the business. Take the time to look into the business to discover what different qualities are available to make an emotional difference for the consumer. This will allow the business to connect to the target market at the right place and time. Make sure the brand's personality shines through. Examples of excellent business USP's are: M&Ms: "The milk chocolate melts in your mouth, not in your hand." Domino's Pizza: "Fresh hot pizza, delivered in 30 minutes or less or it's free." Target: "Expect More. Pay Less." It is important for the business to realize the USP doesn't have to center around the product/service elements, but can encompass a unique feature concerning the whole business. Forming and utilizing a quality USP to the target market enables the business to really stand out.