Digital Product

5A 3190 DMCM David Edmundson-Bird

Digital Product
So whats the problem?
You have to produce a digital marketing strategy poster You have to create a market segmentation exercise You have to describe a typical digital customer voyage You have to produce a digital customer experience

Digital Product
So what do you need to learn?
How we define Digital Product How the Digital World affects Digital Product How the 2 Is affect Digital Product What the dynamic nature of digital product portfolios is What digital product development is How digital products enable electronic customer relationships

WHAT IS A DIGITAL PRODUCT?

The Fundaments of Digital Product

A digital product exists for the purpose of a digital transaction Core Benefit
The fundamental value of the digital product

Basic Digital Product

Minimum digital product offering needed to deliver the core benefit a customer expects from a digital product

Augmented Digital Product

Features that go beyond the customers minimum expectations

Digital Product Value Hierarchy

e.g. Choosing Drinks
DIFFERENTIATION

How will I feel about this product? That I've made a smart choice? That it's a product I can trust? That I've done something good for me? That it's simply something I'll enjoy that will make me feel good? That I'd like people to see me choosing it?

Augmented Digital Product

What does the product offer? Thirst quenching? Refreshment? Stimulation? Relaxation? Staving off hunger or satisfying it? Nutrition? Weight control? Enhancement of health/fitness? Improved performance in athletic endeavours, energy, mental activity, sex or simply alertness?

Basic Digital Product

Does the product taste good? Is it dependable and consistent? Does it offer good value? Is it packaged conveniently and pleasingly?

Core Benefit

Defining Digital Product

Generally 2 sorts
Tangible Goods
Easily understood because the buyer can see and often experience their benefits prior to buying

Services
Actions that companies offer to customers for the purpose of transaction

What about a lifestyle offering or a brand?

Physical Goods
These tend to be governed by certain attributes
Level of quality Features Styling Brand Name Packaging

Services
These tend to be governed by 4 characteristics Intangibility
Cant be touched or possessed not a physical good

Simultaneity
Producer and consumer need to come together at a single time for exchange

Heterogeneity
Subject to variability

Perishability
Excess capacity to provide cannot be stored

HOW DO THE DIGITAL WORLD AND THE 2 IS AFFECT THE DIGITAL PRODUCT?

Types of Digital Product

Type of Digital Product
Digital Goods

Main Purpose
Core benefit comes in a digital format

Digital Attribute
Create once, reproduce many times, transferable Standardised service, producer and consumer are separate in time/space, vivid Disposal of inventory, aggregation of demand

e.g.
Software, news, music

Service

Core service is digital

Online games, search engine, financial advice, banking Online book store

Retail/Distro

Digital sales/ brokerage/distribution for real-world delivery Add extra service or features to a product or service

Augmented Product

Low cost approach to differentiation

Parcel tracking, online investment portfolios

The Effects of the 2 Is on Digital Product

Individualisation

Interactivity

Easy to convey prices to individuals Allows more targeted price promotions Different presences cater to different segments Dynamic pricing presences can keep individuals informed

DIGITAL PRODUCT

Allows for responsive service interactions providing augmented value to product Allows organizations to quickly gather valuable customer data (e.g. preferences) Customers directly involved in the product development

WHAT IS THE DYNAMIC NATURE OF DIGITAL PRODUCT PORTFOLIOS?

The Digital Product Portfolio

New to the organisation New to the market New technology
DEGREE OF INNOVATION None Incremental Breakthrough Discontinuous

EXISTING PRODUCTS

LINE EXTENSIONS

NEW PRODUCTS

Effect of Entry Order to Digital Market

Rule of thumb: First to market & fast followers often have sustainable CA
Hockey Stick Adoption Curve

MARKET ADOPTION
First to market

Fast Follower

Me Too!

Slackers

TIME

Digital Product Lifecycle

SALES

BIRTH

GROWTH

MATURITY TIME

DECLINE

WHAT IS DIGITAL PRODUCT DEVELOPMENT AND HOW DOES IT ENABLE ELECTRONIC CUSTOMER RELATIONSHIPS?

Conventional Product Development Process

IDEA GENERATION IDEA FILTERING CONCEPT DEVELOPMENT

BUSINESS ANALYSIS

PRODUCT DESIGN
MANAGEMENT REVIEW

PROTOTYPING
MANAGEMENT REVIEW

MARKET TEST
MANAGEMENT REVIEW

COMMERCIALISATION

Convergent & Divergent Thinking in Digital Product Development

Number of ideas

START

Divergent Thinking

Task Separation

BRAIN STORMING

IDEA SCREENING Convergent Thinking

FINISH

Ideas increase over time

TIME

Critical evaluation allows you to narrow the focus over time

New Digital Product Development Measures

Customer BUSINESS DRIVERS Business
Extending existing brand name or new? Fit with portfolio? Fierce, nonexistent marketplace? Economic potential? Role of the channels? Objective? Generate more existing business? Attract new users, or keep existing? Customer expectation of particular imagery or positioning? New product fulfill needs/aspirations?

How measure performance? What incentives? Resources and skills needed?

Timing for market introduction? Do we have resources? How long & how much? What is the required business model?

Can we do it or do we need help? Sufficient existing capacity? Does the technology exist? Managed internally or outsourced?

People

Processes ENABLING MECHANISMS

Technology

Digital Product Development Process

IDEA GENERATION Digital Customer Input Digital Product Design and Digital Communication Tools Digital Experimentation and Testing CONCEPT DEVELOPMENT

ITERATIVE PRODUCT DESIGN

ITERATIVEPROTOTYPING

ITERATIVE MARKET TEST

COMMERCIALISATION

MARKET

Digital Product Levers by Relationship Stage

Acquisition

Conversion

Retention

Dissolution

Core Benefit Packaging & presentation

Presentation & packaging Attributes & features Presales support Fulfilment Availability of complementary products Customer-specific attributes & features

Upgrades Customer-specific attributes and features Post-sales support Tiered service Personalization Customer care

Migration to different product in the portfolio Customer care

What Weve Covered Today

Weve defined Digital Product Weve looked at how the Digital World affects Digital Product Weve seen how the 2 Is affect Digital Product Weve investigated what the dynamic nature of digital product portfolios is Weve looked at what digital product development is Weve shown how digital products enable electronic customer relationships