The growing size of physical as well as digital markets has created massive sales opportunities for businesses. Yet, marketing to an increasingly wide audience is challenging because there can be a significant disconnect between how a company views its products and services and how potential customers view them. This disconnect has significant implications, not only for marketing strategy but also for the entire firm value creation lifecycle. This article discusses product perception gaps and how companies can manage those mismatches to increase product sales and build long-term company value.

Will Our Real Customer Please Stand Up?

The product marketing process is not limited to the product’s sale but more broadly includes the entire lifecycle of a customer’s product relationship. This lifecycle consists of the customer’s:

• awareness of a product
• consideration of the product, on its own or compared with other products
• purchase of the product
• product loyalty; and
• product advocacy, such as making positive statements about the company to friends or on social media.

Each step in the customer product lifecycle depends on a complex set of factors related to:

• the customer’s needs, perceptions, and payment ability
• product factors such as product functionality, quality, price, and availability; and
• competing products.

These factors are constantly changing. A customer’s ability to pay for a product is based not only on their economic situation, which often fluctuates, but also the availability and price of credit and payment options offered by the vendor. A customer’s relationship with a product, such as a television series on Netflix, can change from episode to episode based on the episode’s quality and how well it resonates with customer entertainment expectations. All of these factors combine to create constantly shifting customer profiles.

Dynamic factors in the product marketing lifecycle combine to create constantly shifting customer profiles rather than static customer targets.

Customer profiling has become much more challenging in a globalized world where products and services reach across often highly different markets. While increased sales channels, faster shipment capabilities, and digital connectivity have all made it possible to reach a wider audience, it has also increased the likelihood that a company’s potential customer base is increasingly diverse. Product colors, prices, and even functions may be viewed very differently, not only from one market to the next but also from one sub-market to the next.

Customer Product Perspectives

One of the world’s most iconic brands is Starbucks. But what does Starbucks actually sell? Does it sell very high-priced coffee or rent very low-priced office space? The answer depends not on the product but on the customer’s product perspective. For someone buying a coffee to go, they would likely view Starbucks as selling coffee. However, for a solopreneur with a limited office budget, Starbucks might be viewed as a highly attractive low-cost workspace option.

Depending on the customer’s perspective, Starbucks could be viewed as a seller of high-priced coffee or a renter of low-priced office space.

Customer product perception diversity extends to far more products than might be expected. For example, what is a baseball game? A popular sport? An opportunity to study sports strategy? A venue to have a good time with friends and family with baseball in the background? A place to market products and services? Depending on the customer’s perspective, it could be any of these things.

The fact that the exact same product can mean very different things to different people has implications beyond marketing strategy. Returning to the Starbucks example, if the majority of customers in a particular market view Starbucks as a high-priced coffee seller, Starbucks might concentrate on:

• providing the best quality coffee or service possible to justify the price;
• shift marketing focus to other parts of the Starbucks experience that are perceived to provide good value compared with competing options; or
• lower the price to increase demand.

On the other hand, if the majority of customers in a particular market view Starbucks as a provider of low-cost workspace where the key factor in coffee and food purchase decisions is simply that those products are close to where the customer is working, the business focus could be on making sure that:

• there are sufficient places for people to work and have client meetings
• the Internet connection is strong
• business lunch sets are available; and
• there are people who can bring orders directly to customer tables so that customers do not have to stop working and leave their computers and work materials unattended.

Company Product Perspectives

Complicating marketing strategy even further, just as there are many ways that customers can look at products, there are also many ways that companies can look at them.

Sales End-Point Product Perspectives. The simplest way for a company to look at a product is an item that satisfies a specific customer demand at a specific time for a specific price. With this perspective, the fact that client perceptions of a product might be varied is not of primary importance. The key factor maximizing product sales at a defined price point. While this is a reasonable and widely followed strategy, it exposes a company significantly if customer perceptions or market conditions shift.

With an end-space sales perspective, a company does not focus on selling a particular product but rather on occupying a market space that can be filled with different products as customers and markets shifts.

Sales End-Space Product Perspectives. A more flexible way for a company to view its business is not selling a fixed product but occupying a product space that can be filled with different types of products. For example, consider a supermarket. While from a customer’s perspective, the supermarket is selling the specific product that a customer sees on a shelf, from the supermarket’s perspective it is selling space for a product that meets a certain level of customer demand. If that demand shifts to a certain degree, the space on the shelf will be filled with another product.

Supermarkets are good examples of companies that follow end-space product perspectives.

Product Creation Perspectives. Yet another way for companies to view products is not as products but rather as a function of a more extensive process that could be distinguished from competitors based on its quality, speed, or price. A classic example of this type of product perspective is in publishing or other content creation industries, where different products must be produced constantly. To succeed at this level, a company must continuously strengthen not only its products but its ability to create new products. In this approach, the process is the product.

In a product creation product focus, the process is the product.

Company Value Perspectives. Another way for a company to look at its products and present them to the market is as a reflection of its core values. A type of business that relies heavily on this marketing approach is financial institutions, where many people make decisions to do business with an institution not because of the specifics of a product or how its products might change based on market conditions but rather because of the trust in the institution and the belief that their money will be safe there. This product perception view is the farthest removed from day-to-day customer or market changes.

Navigating the Seas of Production Perception Gaps

For companies who want to increase their competitive position in the market, the practical question is how to build a resilient marketing strategy in a world:

• where customer perceptions are highly diverse and shift
• company perceptions of their products are highly diverse and shift
• there are significant and changing gaps between customer and company product perspectives.

There are several steps companies can take to become stronger in a world of product perception gaps.

Production Perception Gap Identification. To begin with, companies interested in significantly expanding their market reach must realize that the more that companies cross market lines, the greater the probability that production gaps will increase. This means that companies should not only build a marketing strategy based on who they believe their “ideal” customer to be but instead on a range of customer profiles that could be attracted to a product based on their own product perceptions. This requires building a market strategy around a data-driven approach which can provide continuing insights into:

• the types of people purchasing company products
• how those people view the company’s products
• how quickly product purchase patterns are changing; and
• what is driving those changes.

Product Flexibility. One of the consequences of a world where the possibility of product perception gaps is high is that companies must evaluate not only how quickly they can provide the company’s current products but how quickly they can respond to changes in customer preferences. This means how quickly they could:

• lower or raise their prices
• increase or reduce materials to alter supply
• change logistics providers or channels
• make changes to the form or function of their products
• create entirely new products; and
• shift their marketing message or diversify it to emphasize different product perspectives.

Value Anchoring. Another way for companies to manage production perception gaps is to make sure that they dedicate some portion of their marketing efforts to building the company’s brand and emphasizing its core values to resist customer and market shifts better.

Conclusion

While expanding physical and digital markets provide many business opportunities, they also present the possibility of gaps between company and customer product perceptions. By being aware of these gaps, companies can better integrate their product design and marketing strategies so that those gaps can not only be managed but converted into a competitive advantage.

The photo for this article was taken by the NixCompany and is available on Unsplash.