In this module we’ve covered a wide range of topics related to the role of the product in the marketing mix. As you’ve seen, creating clear value for the customer, understanding the product life cycle, and creating a balanced product portfolio are all interrelated aspects of thinking about the customer and market behavior.
At the beginning of this module we discussed the success of Uber’s ride-sharing product. Let’s take another look at it from the viewpoint of the new-product development process.
Recall that the business model canvas is a tool companies use to lay out the business case for a new product concept. Figure 1, below, is an example of how Uber’s business model canvas might have looked when the founders cooked up the idea for their ride-sharing offering. Given what we know now about the product’s success, it’s pretty clear that Uber hit its mark: the company identified and delivered on a value proposition with incredible product-market fit.
The successful definition, development, and delivery of the product reduced risk in other elements of the marketing mix, though Uber’s affordable and predictable pricing is an important part of the value proposition. The product has been successful and is continuing to grow in the market. In 2018 the company reported revenue growth of 43 percent year over year.
Uber’s market may be reaching maturity. In terms of the adoption cycle, Uber has moved far past the innovators and early adopters and likely past most of the early majority. Now it needs to attract late majority customers and fight to hold on to its existing customers in a very competitive marketplace. As you think about Uber’s product and market, will laggards ever use the service? Should the company try to influence them?
Chris Nicholson, from FutureAdvisor, explains the impact of this trend on Uber and its competitor, Lyft: “They both feel that the only way to maintain their growth rate in the U.S. is to grab each other’s market share.” As the market reaches maturity, competition is getting more fierce. The companies have to fight to keep their customers and try to lure customers from competitors if they want to sustain their growth.
In using more of the tools and frameworks that we have discussed in this module, you are better able to understand a product’s success, identify risks to its future success, and use effective marketing to influence the course of that product’s success.