The New Catalog Product Process

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Product Source Position. Simply put, will the products be imported or manufactured in the U.S.? In some cases, this is a very important positioning element, not only economically but ideologically. For example, the Harley-Davidson product line is somewhat (read: large, hairy, patriotic men (and women) with tattoos and nose rings) identified as being a U.S. product line and you probably would not want to deviate from that position. In a similar mode, product sourcing also has to include a position on the percentage mix of internally manufactured versus outside sourced products if this is a relevant ratio for the catalog company. While this tends to be a gross margin issue, there is also the economic position of inventory burden to be considered.

Product Quantity Position. What are the quantity breaks you will offer for the products? In the world of advertising specialties, coffee cups are generally offered in dozen lots, such as 6 dozen (half a gross or half-carton). If you want to stake out the low quantity, high price position, offer coffee cups in minimum quantities of 24 instead of 72. You will attract many more small quantity buyers. At the opposite end, you may want to stake out a larger share of very large purchasers and choose to offer a lowest price 12 gross (master carton) discount for the 1,728 quantity. Both of these extremes reflect a specific product quantity position. The merging of quantity and price results in a "sweet-spot" position that determines at what quantity break you will offer the best discount or price break. As you work to improve gross margin, you might offer the best quantity/price break at lower quantities to encourage slightly higher gross margin and more frequent orders. Moving the sweet-spot up and down can influence the number of orders, the average order value, the frequency of orders and the rate of customer retention.

Product Personalization Position. Some products can be personalized. Personalization usually involves logos, name and address, initials or other personal elements. Personalization can also include registration numbers, value-added security features, custom designed software loads, tailored warranty programs, and an endless list of creative ways to make the product yours alone. Think of cell phones. Your phone may just "ring," but mine plays flamenco when you call. To some degree, every product you sell can be personalized in some way, particularly if that is your gimmick and a position you wish to capture for your product line. I would be willing to bet you that this topic has never received more than a cursory discussion at your catalog company; at least, not more than the simple, expected components of your products. What I am after, is the wholly unexpected and breakthrough concepts of personalization that you can conceive and add to your product positioning strategy. For Dell, this was something as revolutionary as saying to their prospective buyers, "Hey, call us up and tell us what you are going to use this computer for and we'll configure it with the right software you need to do the job. Just plug it in and go!" Wow! What a concept: Personalized computers!

Product Service Position. Is the primary product position one of on-going service? For example, a Ford Taurus is purchased not for design or price, but for service reliability. The transmissions are known to go 200,000 miles; tune-ups occur at 50,000 and 100,000 miles; with routine oil changes, the engines never die; everything about the Taurus implies reliability and service consistency. Maytag is another good example. Until recently, since the financial performance has declined, the company's products were positioned as virtually "no service calls are needed." The service guy, Old Lonesome, became the icon for the service position. Now, changes are occurring that require a re-examination of the product economic positioning, the product sourcing positioning, the product quality positioning and the product service positioning. Suffice it to say, there are changes ahead for Maytag if they want to stay in business. What is the service position your products command? Is that the position you desire to occupy in the future? If not, what do you have to do now to assure there is a position in the future?

Product Technology Position. Do your products have a high-tech position? Or, are they low-tech or no-tech? Do you wish to move up the tech-ladder or down the tech-ladder? A good example is pocket calendars that are imprinted with your company name and logo; you know, the ones you give away at the beginning of the year. If you were the manufacturer of these products, what would you be thinking in 2004 relative to the future product technology position of that product line for your company? If you are setting out to create a business-to-business product selection, what percentage should be high-tech versus low or no-tech? Of course, opportunities in product exist to travel the contrarian and contra-cyclical route. In a world of the high-tech Blackberry, I tend to want to stake out the leather pocket diary and No. 2 pencil share of the market. There probably isn't anybody else who wants to do that and there is a huge core group of No. 2 pencil folk out there who are looking for somebody to service their simple desires and product needs. So, there are choices to be made about product technology and position: leading-edge or trailing-edge; early adaptor pricing or late adaptor discounting; high-tech, high-service position or low-tech, no-service position; and many others. The point: Technology moves and product position either moves ahead of, with, or behind the technology curve . . . at a cost. What do you want your product line's position to be?

Product Proprietary/Brand Position. Is it your intention to create branded, proprietary products? First, recognize that proprietary and branded products are not always the same. A product can be branded and not be proprietary and the opposite is also true. If you wish to stake out the unique proprietary product position, that is, a product found nowhere else, you have to have some very special product design elements. If you wish to stake out the brand position using your product quality or product service positions, you have to begin with those elements and merchandise them on an integrated basis with your brand position. When branded product is associated with an upscale economic position and highest quality position, what often results is an exclusive, classic, traditional, high-priced, proprietary attributes, gender-specific line with limited choices and timeless design. Think Chanel and Aston-Martin. Often, these products will be featured in a catalog as the "best" of a "good-better-best" product array and will carry a unique brand caché. A proprietary, branded product line also usually develops more corporate value than a non-proprietary, non-branded product line; and only value matters in the end.

While other product positioning components exist and should be explored, these twelve components provide a place to start when conceiving of a product line to be presented in a new catalog, or when re-formulating an existing catalog's aging product lines. I daresay few catalog companies truly exhaust all of the potentials to be found in product development in just these few, simple components of the art and science. After all, it is far more interesting and exciting to jump right in and get some "new product kill." Marketers and product types are always extending their talons and spreading their wings, lustily waiting for the hot, rising thermals so they can launch out over the cliff and swoop down and snatch a dismal piece of new product in their claws and quickly fly to their roost and greedily gnaw away at the pitifully sparse flesh in a feeble attempt to satisfy their constant hunger for fresh meat and the thrill of the kill. But, once and a while, an old, grizzled hawk sits high in a tree and relentlessly ponders all the potential positions and possibilities and then effortlessly flaps down and gets a big, juicy rabbit.

Hey, it's all about positioning.

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