The potential product refers to a product the marketing and product development teams can develop further by considering all possible augmentations and enhancements that the product might undergo in the future.
There are five product levels which are Core product, basic product, expected product, augmented product, and potential product. The expected product is the basic or generic product that offers a solution to the customer’s problem. The augmented product is an enhanced version of the expected product. It offers additional features, benefits, or services that go beyond what is offered by the basic product and provide a greater core benefit to the customer.
Any product’s primary advantage should be to improve the customer’s quality of life. For this reason, it is the duty of marketing management and product development teams to develop products that satisfy client expectations for the foreseeable future.
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What is a Potential Product?
The potential product is a product that can potentially be developed by the company and may involve all the modernization and improvements that a product might experience in the future. It is the fifth level in Kotler’s five product levels model and is used to identify the different needs of customers. The potential product considers customers’ possible future demands, which may be difficult to forecast. Additionally, it may assist the business in deciding which features and resources should be used to build a certain product or service.
For example, a car manufacturer may develop a list of possible products outlining how its models might be modified to incorporate amenities like Bluetooth connection, GPS navigation, or other technological advancements. The level also takes into consideration any modifications to the vehicle’s exterior styling, such as a bigger or more aerodynamic body. The firm may pick which features to prioritize and which ones could be too costly or superfluous by compiling this list.
Potential product analysis may also assist a business in calculating the chances that a forthcoming product launch will be successful. Businesses do market research to see how prospective buyers could react to a new product and then create a marketing plan for it. They also assess client happiness and perceptions of the product using input from focus groups and surveys.
What is the importance of developing potential products?
- Market Competitive Advantage: Developing potential products allows companies to stay ahead of the competition by constantly innovating and meeting emerging market needs. This proactive approach can lead to a dominant position in the marketplace, improved brand reputation, and customer loyalty.
- Revenue Growth and Sustainability: Potential products represent new opportunities for revenue growth. By continually expanding their product portfolio, companies can diversify their revenue streams, mitigating risks associated with dependence on a few key products. It also ensures the business’s longevity by staying relevant and meeting evolving customer expectations.
- Fostering Innovation Culture: The process of developing potential products encourages a culture of innovation within the organization. This not only leads to breakthrough products but also drives overall business improvement, employee engagement, and adaptability to change. Such a culture can make the organization more resilient in the face of market fluctuations and disruptions.
Examples
- A car company may think of a 7 seater car to be launched.
- Trucks and heavy vehicles expanding on self-driving capabilities.
- A smartphone company launches a product with added Camera and Storage benefits.
- A Windows laptop with 20 hours of battery (We can only dream of this)
- Any potential development for an existing product.
Process of Developing a Potential Product
- Idea Generation: This is the first phase where new ideas for products are created. The process includes conducting brainstorming sessions, researching the market, scrutinizing customer feedback, and examining present trends and technologies.
- Concept Development and Testing: After the idea is created, it is transformed into a concept for a product. A small group of potential customers is presented with this concept to collect their feedback and opinions.
- Feasibility Study and Market Analysis: We conduct a feasibility study of the product, covering financial, operational, and technical aspects. Additionally, we analyze the market to determine potential demand, competition, and pricing strategies.
- Product Design and Development: The product is designed and developed based on the feasibility and market analysis findings. This refers to tasks such as developing models, enhancing capabilities, and selecting manufacturing techniques.
- Prototype Testing and Refinement: The prototype undergoes testing to confirm that it satisfies customer requirements and complies with quality standards. If required, it should be improved or modified based on the test results.
- Marketing, Sales, and Distribution Planning: To complete this task, you need to develop a detailed plan for introducing and promoting the product. This plan should include strategies for communication with potential customers, identifying sales channels, and determining how the product will be distributed.
- Product Launch: Once the company has completed all the necessary preparations, they introduce the product to the market and gather feedback to improve it.
- Post-Launch Review and Improvement: It is crucial to assess the product’s performance after launch, gather customer feedback, and implement necessary changes or enhancements. This ensures that the product stays competitive and meets customer needs.
Advantages of Potential Product
Some of the key advantages of the Potential Product include –
- Potential products can be leveraged to develop solutions that better fit the requirements of consumers. This way, businesses can create new products or services that are more tailored to customer needs.
- It can be a valuable tool to help businesses recognize any gaps in their product framework and suggest improvements. This can lead to better service & experiences, helping you reach your goals much faster.
- With the help of potential products, businesses have a chance to open new doors of creativity and innovation in product development. It has become an integral part of modern times, enabling companies to come up with more unique solutions.
- Utilizing it can also help an organization stay one step ahead of its competition by understanding consumer trends & preferences. This can prove to be beneficial in the long run and help them beat their competitors quickly.
- It can be highly beneficial in helping businesses evaluate available market opportunities and plan ahead for potential growth.
Limitations of Potential Product
- With ever-changing market conditions, it can be challenging to anticipate the demand for specific products.
- Crafting a successful product can be difficult and demanding, as it requires extensive research and lots of resources.
- Staying ahead of the game can be hard when it comes to predicting which opportunities and potential threats will arise in the market for your product.
- It’s no secret that the market is constantly evolving and so are its products. Consequently, what was once trendy and cutting-edge may become outdated in a very short period of time.
- Ensuring that a product meets high-quality standards can be challenging but is essential for success.
Challenges
- Market Uncertainties: Accurately predicting customer needs, market trends, and competitor responses can be difficult. Failure to do so can have dire consequences such as dissatisfaction and lagging behind your competitors.
- Technological Hurdles: It may be difficult to develop a product that utilizes the newest technology due to its rapid advancement. There may be issues with the immaturity of the technology or a lack of expertise which could make it impossible to implement for commercial use.
- Resource Limitations: Creating a new product demands a substantial investment of time, finances, and workforce. Small businesses or startups may face significant obstacles due to limited resources.
- Regulatory and Compliance Issues: Following rules and regulations can be a difficult and time-consuming task based on the industry and product needs.
- Risk of Failure: Sometimes products can fail despite best efforts. During development, there is always a chance of failure, which could result in financial loss.
Conclusion!
In the end, it is clear that a potential product includes all the beneficial features, specific details, augmentations, and improvements that could be useful for the product or service in the long run. A strong marketing strategy that takes into account the features customers expect and only presents those features in a customer-friendly way, is essential for creating a product that meets customer demand.
Augmenting the product with features beyond the basic version, and adding value to something customers already find useful can help to delight customers and increase the perceived value of your product. To create a core product that satisfies existing and new customers and holds greater emotional and financial value, prioritize meeting the needs of potential consumers and adding future-driven features that let the product be relevant in a changing market.
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