Category: Business & MBA

Now the family left me here for the afternoon, I have some time to exercise blogging and put down a few thoughts on my recent job. To write in a cosy environment, a lit the fireplace at the house we are staying in. The result is as favourable as you may imagine. Only the missing bear fur could add to the feeling. The role in marketing, “Product Management”, hasn’t been that cosy recently, for a few reasons, that are more related to corporate behaviour than to individual contribution.

While I will need to avoid mentioning the actual product I am still working on, and it’s probably difficult even not to have any references, the below still tries to explain the tensions that exist in the world of traditional industry, moving towards a digitalised service business, in which tangible products get marginalised.

The primary reason for me, an computer engineer, having spent all his life in service business and so to say “in the cloud“, to come to a marketing oriented role is to design and develop – as in business, not as in a computer programming – a connected product.  The Internet of Things, if you want to. Whereas many companies have Things already. But they want to offer smarter things, that’s why everything gets connected. Now connectivity has to offer many benefits over traditional products, but they’re not the primary value proposition the customer pays for. The customer still pays for the product. And in the market, any customer will ask for the smartest product available. Just like I wanted to light a fire. One that was good and warm, and keep my cosy. And to do so, I had to collect some pinecones, that would easily catch fire. It was bothersome, but necessary. 

The things industry is not very familiar with service offerings. It’s actually something fundamentally different from the internet or services industry. To put it boldly, what a customer expects from a product: something solid. And what a customer expects from a service: something that is available anytime. (Like, literally, in the middle of the night!). While Things are sold physically and can be produced on stock, a service cannot be hold until the customer asks for it. Value through a service is created by making something more convenient. I’d have paid somebody to cut and carry the wood required to light a fire. But I had to do it myself, and that was  not only tiring but also heavy work. While, as a customer, the thing I’d buy is the wood, I would spend a premium for somebody to do the work. To add the service. Probably not much, but hey. The same happens for businesses.  While still everybody produces products, the more convenient products are in the customers favour, only at a small margin, though. Just to make an example, just recently Oracle, a business to a majority based on the sales of products, databases, announced to acquire Accenture, a consultancy service, to add services to it’s portfolio. Others have doubts this merger makes sense, exactly for the above reason. Margin driven things companies will have a difficult time appreciating low margin service as part of their portfolio.

Just like me. I wanted to sit in front of a warm fire when spending my time without the family. It’s very clear I’d need pinecones and wood to get that, and I’d pay for it. However, if some other guy selling wood sells cut wood and carries it to my house for a fee, I’d probably appreciate that more convenient offer. But that decision has to be made very conscious, and people responsible for the service in that organisation can’t be measured on financial goals as their product colleagues, but customer satisfaction.