If you’re a product manager or small business owner with a product you’re excited to introduce to the world, the last thing you want to hear is that 30,000 new consumer products are introduced to the market each year. And that’s not all. By some estimates, nearly 95% of these products fail. With this kind of competition and those odds against you, how can you ensure that your product is going to survive?
The answer is to stop thinking of your product alone as the selling point. Instead, start thinking of your product offering. The difference might seem small, but a product offering encompasses the entire customer experience and gives you more ways to make your product irresistible.
Here’s what a product offering is and how a good one can make sure your business succeeds. Plus, get insights from Etienne Ortega, founder of the makeup line ORTEGA.
What is a product offering?
A product offering, in simple terms, is what a company offers its customers, including the product or service, its price, its warranty, and more. Think of product offerings as “the complete package” from the item in the box to the customer service.
An excellent product offering can showcase unique value outside of the product itself. For instance, a company could be selling a product similar to a competitor’s, but its value proposition lies in its stellar warranty or a special subscription plan. Businesses often look beyond the physical product to the holistic experience of purchasing to gain a competitive advantage in the market.
Types of product offerings
Most product offerings fall under four main categories:
Shopping items
These are widely used items that customers will do in-depth research for to choose the best option, like mobile phones or air fryers. Consumers will likely be comparing these types of products against each other, so businesses should have differentiated benefits like add-ons or warranties that will win over discerning customers.
Convenience items
These are items that aren’t necessary and typically don’t get as much research before purchase, like soft drinks or salt shakers. Your product offering should focus on providing immediate convenience with packaging and portability.
Specialty offerings
These are items that have a small and specific market, like sports cars. The product offering for these types of goods may include not just highlighting the virtues of the product, but creating name recognition or a sense of luxury and exclusivity.
Unsought offerings
These are items that customers generally seek out only when they need them, like bandages or funeral services. Your product offering should consider the urgency of the customer’s needs and what reassurances they will be looking for in the moment.
Components of a product offering
Defining the key components of your product offering helps reveal the value of your product and ensures you stay competitive. It’s not an easy process. Etienne of ORTEGA explains that the development process took a huge amount of time and energy. “I kind of started over three or four different times,” he explains on an episode of the Shopify Masters podcast, with each round of feedback helping to define and hone what he wanted to offer.
Here’s a look at the important aspects of a strong product offering.
- Product and features. The core product—the tangible item or service offering itself, along with its unique features—is at the heart of the product offering.
- Price. The total cost of products and services will always play a pivotal role in every product offering and is one of the biggest ways in which you can influence customer preferences and decisions.
- Attached services or products. You might have add-ons, additional features, or a special service included in the purchase. This could be a service like free tailoring when you purchase a pair of pants or an added product like batteries included with a children’s toy.
- Delivery and packaging. Packaging plays a major part in the product experience, and this was certainly the case for Etienne. For the sake of uniqueness, he decided to make his packaging a striking shade of blue. “This is not something I’ve seen in the beauty space. I’m going to do blue and stick to it.”
- Customer service and warranty. Companies who want to maintain customer loyalty can offer ongoing service, maintenance, or upkeep support for their product, along with other assurances, like lifetime warranties.
- Subscription or membership options. Both products and services can come with subscriptions for continued access to features or regular updates—a strong product strategy to encourage customers to stick around long-term.
- Exclusivity. Limited-edition drops of a new product or limited qualities might seem frustrating for some customers, but others might find the exclusivity fun and alluring.
- Sustainability. With studies showing that some consumers are willing to spend 9.7% more for sustainable goods, highlighting your efforts to be eco-conscious can help you win over certain customers.
- Humanitarian work. Having your business donate to a charitable cause that aligns with the company’s mission can help sway your target audience who in turn may be motivated to buy while doing good.
- Brand story. Many consumers want to support brands with business success stories that resonate with them. For instance, Etienne immigrated to the US from Mexico and works hard to highlight Latino heritage and culture.
Benefits of a product offering
Having a product to sell is great, but what’s better is having a strong product offering with a specific value proposition that helps you stay ahead of the competition. The difference is in knowing what you can get out of a well-designed product offering. Here are a few ways your business can benefit:
- Stand out from the competition. A strong product offering gives your brand more avenues to offer unique value—from price to delivery speed to customer service, all of which can help you stay ahead of market trends and capture new customers.
- Appeal to segmented audiences. Not all customer needs are the same, so offer various features to retain customers. For example, some of your targeted customers may be risk-averse, while others may struggle using technology. You can appeal to both segments at the same time: to the former with a 30-day money-back guarantee, and to the latter with 24/7 live tech support.
- Increase sales. By offering a great product, a competitive price, and excellent wraparound services, you can convert more potential customers into real ones.
- Improve customer satisfaction. The ongoing process of improving your product offering will require you to gather feedback and iterate to create an above-and-beyond experience for target customers.
How to create product offerings
- Start with your target audience
- Research the competition
- Brainstorm your product offering components
- Use design thoughtfully
- User test
Creating your company’s product offering is about more than creating just physical products. Consider how your target market experiences purchasing your product, and how customers understand what it is you are providing them. Let’s look at a few ways you can create a new product offering with examples and advice from Etienne Ortega:
1. Start with your target audience
Start designing your product offering based on your target audience’s needs. You’ll need to know your target demographic like the back of your hand, and then iterate on your product offering with them in mind to achieve a true product-market fit.
Etienne thought a lot about his audience through his makeup products’ price points. “I wanted my line to be luxury, but I also wanted my line to be accessible to … the type of people I grew up with,” he explains on an episode of the Shopify Masters podcast. He decided to try to balance accessibility and luxury with a middle price point while not sacrificing quality. “These formulas weren’t cheap. They’re really well done. Our packaging is really beautiful.” By doing this, he was able to gain access to cost-conscious shoppers who want quality products.
2. Research the competition
You can’t win the majority market share in your industry if you don’t know who you’re up against. Research your competitors to find out everything about their product offerings, and try to find the single company that’s doing it best. Study everything about their customer experience, from what marketing channels they use to how to buy a product on their website. Ask yourself why customers purchase their new products over existing ones in the market. Maybe they offer lower prices or higher-quality materials or even a better online purchase experience. Eventually, you will need to find a unique way to meet your target market’s needs so you can win customers over to your product.
3. Brainstorm your product offering components
List out the paint points of your audience, and brainstorm what product offering components can help solve each one. For cost-averse shoppers, a low price; for busy shoppers, quick delivery and easy returns. The more specific and unique your offerings are, the better chance you’ll have—and the easier it will be to craft a successful marketing plan.
4. Use design thoughtfully
While product development focuses on prototyping an actual product, developing a product offering has a wider scope, since it typically includes a lot of intangible benefits that you’ll need to communicate to prospective customers. This is where design comes in.
Figure out what you want to put on packaging, on your website, logos, product pages, etc. What do you want to showcase most prominently? Is it your clean ingredients, a sense of luxury, or your price point? Remember to keep your offerings simple, clear, and always directed at your target market’s pain points.
For Etienne, serving beauty-conscious customers meant creating beautiful packaging and presentation. ORTEGA is well-known for its blue branding, which is on everything from marketing to packaging. Not only is it beautiful, but it’s inspired by blue agave, further highlighting his own identity and the product itself. “It ties into where I was born—Jalisco, which is where agave is from,” he explains. “I just love the ingredient in general. It just has so many amazing benefits that it was like a no-brainer.”
5. User test
Once you’ve created a version of your product offering that you believe will speak to your target audience, it’s time to get feedback from some real people. Try to seek out potential customers or those in your target demographic who can make sure you’re on the right track. While this ongoing process of customer feedback and iteration can be tedious, you’ll be able to work out the problems that would have caused actual customers to leave bad reviews and ask for refunds down the line. With a fully user-tested product and revised product offering on launch day, you’ll be more likely to please customers with your product offering on day one.
Product offering FAQ
What is a product offering example?
While a pair of jeans is just a product, the product offering for a pair of jeans may include having free alterations, using recycled fabrics, and your brand’s commitment to fair wages for all factory workers. These components can make your product enticing to those who care about sustainability, social justice, and custom sizing.
What are the different types of product offerings?
The four main types of product offerings are shopping items, convenience offerings, specialty items, and unsought offerings, such as a towing service or a funeral casket, which aren’t sought out unless a consumer specifically or suddenly needs them.
How do you make a product offering?
To make a product offering, start with a product you wish to create or find an unfilled need in a market where you can create a relevant product or service. With your product or service established, you can then build out your product offering with features like packaging, branding, cost, and a seamless purchase experience.
