Meeting Needs Through Proper Product Integration Strategy
It is a common practice amongst many small businesses in Nigeria to pursue expansive product mix. This is due, in the main part, to the massive fragmentation that exists in the consumer goods market where a mass of small enterprises offer largely similar services. In the market, these products portend little or no features to differentiate them significantly enough to elicit brand loyalty. So, firms, particularly in the vast and mostly unregulated service sector, simply opt to offer a wide variety of services supposedly related to a particular main product, hoping that they will attract existing or new customers of the main service to become consumers of the related service or product.
However, what I found in my interaction with many service providers (especially those in the personal services and food & beverage market), reveal that this strategy has not led to better sales. Probing deeper it turned out that nearly all of these service providers undertook some product integration strategy simply on their own assumptions of what the customer would want alongside their main offerings. For example, I found that a particular owner of a hairdressing salon had introduced magazine sales to her main service offering (i.e hair-making) since, she insinuated, women would like to while away their free time reading lifestyle magazines and celebrity news while being attended to or waiting for their turns. She provided this new product for nearly a year only to end up with ridiculous sales. Unfortunately, it turned out that most customers preferred to gossip or call friends and family while being attended to or waiting to be attended to. This scenario exists in many other similar service-oriented businesses in Nigeria. Businesses need to rethink their product integration strategy.
To realize a successful product integration one must pose the following questions: when customers want for a service or product, what need are they looking to meet? And when meeting this need with an offered service or product, are there other needs they need to meet at the same time and place, that the customer is willing to pay a price for? In the case of the hair-making salon, though customers obviously read newspapers, the demand for newspapers does not come up at the same time as the demand to fix hair. Therefore, these customers were simply not willing to pay for newspapers while waiting to fix their hair or while fixing their hair
In all, what exists on a day-to-day basis is that needs show up at different points in time and place, therefore product integration around the customer simply does not lead to the certainty that sales will follow. Instead, service providers need to think of their integration strategy around the needs that need to be met. This needs to be met principle obviously supersedes other integration strategies because it will lead to consistency in customers’ willingness to pay for product or service, and therefore eliminates uncertainties.