Product Strategy for Business Success

Week 2 – Value Creation, Value Communication

and Value Delivery
Philip Kotler’s concept
Role of product management in creating value

It helps in one’s product strategy by creating

a sustainable advantage using an open
innovation that gives a level playing field
Philip Kotler’s concept

Brand management –
Making promise and keeping
promise!
Interact with customers via mind, heart and spirit
More likely, the mind, heart and spirit shares will make the
product strategy a success.
Philip Kotler’s concept
Delivering value

It is delivering a product to the end customer

through:

• Channel partners
• Dealers
• Distributors
• Retailers
Customer co-creation

It helps in bringing in innovative concepts to a

product strategy in:

• Product development
• Product modification
• Product communication
 Philip Kotler’s concept
Today, a product strategy is creating, communicating and delivering value to a target
market at a profit.
Value is created for the target
and is communicated and
delivered to the target

Profit need not always

be quantified in
monetary items. Surplus
also indicates profit.

Product strategy
deals with product,
brand and customer
Philip Kotler’s concept
Product management, brand management and customer management
strategies differ based on the target audience.

Urban Rural
• Premium product • Product that gives value
• Above the line • Below the line
communication communication
Value delivery process: Traditional
Value delivery process: Contemporary
Porter’s Value Chain
In 1985, Michael Porter, a professor at the Harvard Business School suggested a
value chain in his book “Competitive Advantage”.
Porter’s Value Chain – Primary activities
Includes procedures for Includes advertising,
converting raw material promotion, marketing and
into a finished product sales activities

Includes receiving,
warehousing and Includes customer
Includes delivery of the
inventory control of raw service, maintenance,
product and the storage
material and relationship repair, refund and
distribution system
with suppliers exchange
Porter’s Value Chain – Support activities

• Acquisition of inputs or resources

for a firm
• Includes hiring and retaining
• Relies heavily on inbound logistics
employees
• Effective for managing primary
Support functions that include
activities
accounting, legal and
administration

Includes designing and developing manufacturing

techniques and process automation as well as
equipment’s hardware and software, procedure and
technical knowledge.