This continues our review of the Project Priorities Perspective. See the Project Priorities Perspective post for the concept behind this and Time and Performance versus Cost for a look at those trade offs.
Here is a visual view of this set of trade offs:
Reducing performance can decrease cost and it can also decrease the time it takes to achieve an outcome. This is the classic marketing dilemma. In general:
More features or more performance increases cost
More features or more performance increases time to market
Do I know the relationship between these and the market share I can achieve?’
Will a lower featured product at a lower price point give me better overall profit?
What features MUST I have as a minimum?
What performance MUST I have as a minimum?
Will delaying market release reduce my overall profits?
Of these, the last is the only one that is usually true. The rest all depend. It comes down to how well you know your customers, your competitors, your market and how good your marketing plan is.
Going for the ultimate product is usually fraught with difficulty, firstly because there is no such thing as Perfect Information, and secondly because it takes longer; sometimes the equivalent of forever in marketing terms.
Another way of expressing this is Feature Creep. This problem often exists before the product is even ready for market. Not knowing the market well, the temptation is to add every possible feature to ensure no objections at the point of sale. It normally results from a lack of confidence in the marketing position rather than a genuine evaluation of the benefit of features to overall profitability.
The final way of looking at the challenge is expressed in an old adage, “Perfection is the Poison of Profitability“.
So now the trade off exists:
- Will I add more features in the hope of better sales?
- Will I reduce features to decrease cost and time to market?
- Which features will I keep and which will go, and why?
In my experience, this is one of the most common trade offs that is handled poorly in less successful companies. And it stems from not knowing their market well enough to be able to position the product.
The answer – know your customers and why they buy from you. Then you have a basis for deciding. Up until then, it is guesswork.
You might have noticed that although we focus on low cost electronics manufacture in Australia, these principles can be applied to product development in general.
Next we will look at Time as the primary priority.
Ray Keefe has been developing high quality and market leading electronics products in Australia for nearly 30 years. For more information go to his LinkedIn profile. This post is Copyright © Successful Endeavours Pty Ltd.