There is nothing like a ‘product’. This may come as blasphemy to many who swear by Product Marketing. For them, service, which is the profitable part of the business, sits on the product base in the value pyramid. But before getting all offended, answer this question:
The pertinent question
When people buy products, what do they really buy?
When you bought that fancy car, what were you buying? The metal, glass, rubber and plastic? Is that what you paid for? It is a dabba that occupies expensive space (in South Bombay, some housing societies levy extra car parking charge of ₹50 lakh); at peak traffic time, it takes you hours to commute even 10 kilometres; then there’s extra expenditure on fuel; and pollution, on top of it, besides getting your nerves in a tangle, given the driving discipline our country is famous for.
Many of you might have watched Star Trek . How do people travel in it? They get into something that looks like a shower, and a beam of light falls on them and zoom! they are 100,000 kilometres away, within nano seconds, complete with dress and hair intact! This is teleporting.
So what you actually paid for when you bought the car was a comfortable commute from point A to point B. If teleporting indeed became a reality, will you still use this archaic metal, plastic and glass container called a ‘car’?
Imagine if food and edible items could be preserved for a longer time by just spraying them with some magic liquid (assume it is organic). Will people still buy a fridge? (In a place like Malabar hills, where a flat was recently bought at the rate of ₹1.25 lakh per square feet, the double door refrigerator itself will occupy space worth at least ₹20 lakh).
It’s all about the use
People buy and pay for the ‘use’ of a product, not the ‘box’ that companies sell them in. Since such a use can currently only be delivered in these boxes, people pay for and buy these proxies. But the day the same function can be performed without having to buy stuff that occupies expensive space, people will drop conventional products like hot potatoes.
So what does this mean for strategy management?
As a strategist, your future depends on focusing on making the ‘use’ better. Generally, most companies innovate by investing in R&D, that dreams of new features and ‘next’ products. This traditional approach is not only internally focused, but may also miss the ‘use’ aspect by focusing on the product alone.
Once you reorient your thinking, the scope for improvising and creating great innovative value significantly increases.
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