The Role of Digital Media in Mature Product Marketing
A major focus of my current product management role is the marketing/positioning of mature (B2B, manufactured) products. That is, how to gain the most benefit/return from products at the end of their life cycle. Currently, I manage a portfolio of high vacuum pumps and accessories, some with technology invented in the early 20th century. A more general example of a mature product is the telegraph, invented by Samual Morse in the 1830’s, the last telegraph was sent around 2005.
The McGraw-Hill Marketing Answers website defines mature product marketing as “…(sustaining) a meaningful competitive advantage that will help ensure the continued satisfaction and loyalty of those customers. Thus, a product’s financial success during the mature life-cycle stage depends heavily on the firm’s ability to achieve and sustain a lower delivered cost or some perceived product quality or customer-service superiority.” As mentioned by Rachel Happe (see February Blog Post) during her presentation at the BPMA February event, modern technology will eventually render all products into mature commodities. She goes on to say that social media – especially company sponsored (on-line) user communities - will become a major product differentiator after all firms have similar information technologies that accelerate the “commoditization” process. In summary, social media will replace “good old” face time once provided by a direct sales force.
Clearly, marketers of mature products continually face the challenge of differentiating their products beyond cost/price, which is an ultimately unsustainable advantage. Additionally, the lower price/margin nature of mature products makes using a direct sales force for differentiation unaffordable. Because of this reality, digital marketing in general and social media I particular will become a key marketing strategy for mateure produicts.
I attended the Boston Product Management Association (BPMA) meeting on Thursday, Feb. 21 where Rachel Happe, Principal and Co-Founder at Community Roundtable spoke about leveraging social networks for product innovation. Her basic premise was that modern information technology, big data, logistics and infrastructure will render most products (eventually) into commodities. That is, these modern technologies are available to all companies in all countries, so once they are adopted by everyone, they will provide no sustainable differentiation. So, the only differentiation remaining will be relationships leveraged through social media. Rachel finished her talk by showing how her clients leveraged on-line communities for sustainable differentiation.
As a strategic/product marketing manager of mature technical products (currently vacuum pumps and their accessories) I am very familiar with “fighting” commoditization. The traditional method has been to maintain pricing through a direct sales force. That is, good old fashion face to face relationship selling, or the “analog” version of social media. Of course, this method is expensive and therefore unsustainable as the products come to the end of their lifecycle. Clearly digital social media is an economically efficient way of maintaining relationships with a diffuse end market for mature products.