ELEMENT 5: CORE PRODUCTS AND SERVICES

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ELEMENT 5: CORE PRODUCTS AND SERVICES

‘‘Core Product and Service’’ Defined

The general goal of a product is to fill customers’ specific needs. Core products are the product offerings that are most closely associated with the enterprise’s brand image and generate the largest share of product revenue. The enterprise’s core products and services are generally the basis for its marketplace strategy and value proposition.

Categories of Products and Services

A product family is a set of products based on a common platform. A platform includes design components that can be shared by products in the family. These shared design components allow for variations in product functions and features to meet different customer needs. As product strategies change and new technologies are introduced, new platforms are created. The automobile industry, for example, uses product platforms extensively to reduce costs and leverage technologies.

Derivative products are the products that are designed around a platform product. For example, Sony designed over 200 Walkman products, based on three platforms, to meet the specific needs of global markets. The economic proposition for derivative products is to reduce cost by reducing features (low-cost products), or to add features without changing the price significantly (line exten- sions), or to add features to increase the value to the customer (superior products).

Measuring Product Performance

Measurements of product performance should exist along four dimensions:

• Market performance: How does the marketplace view the company’s products?

• Process performance: How well does the product development process work?

• Resource performance: How well do cross-functional teams perform?

• Financial performance: How profitable are the products / services?

. Enterprise Concept0034

The measurement framework in Figure 16 provides an example of the product dimensions that should be continuously monitored and improved.

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