No company wants to launch a product and then discover that customers don’t want it. Pragmatic marketing helps avoid this by ensuring products are built based on real customer needs and market demand.
Pragmatic Marketing is a sophisticated marketing approach that involves developing a product through a sequential process that continually adapts based on past customer experiences. During adaptation, marketing tactics are tested and refined to ensure the product meets customers’ demands.
In simple terms, pragmatic marketing includes a series of product adaptations and tests to ensure that the final product is highly relevant and meets all customers’ expectations.
In this overview article, we explain why pragmatic marketing is important, how it can be implemented effectively, and how it differs from other marketing methods. Let’s start with the basics.
Table of Contents
Objective
The primary goal of pragmatic marketing is to deliver products as precisely as specified by target customers.
For example, a headphone manufacturer might develop a premium model with specific features for bass-loving consumers. It can implement pragmatic marketing by testing the headphone with a sample group of bass lovers and then re-adapting it to meet the specific demands of that audience.
To make the product perfect for target customers, the company may conduct multiple rounds of testing and product adaptations. The more a company tests its product with a larger audience, the more refined and improved the product becomes.
This is what makes pragmatic marketing one of the most effective strategies to deliver highly relevant products.
Pragmatic Marketing Framework
Credit: Pragmatic Institute
Now that you understand what pragmatic marketing is, the next step is to carry out key activities that help you bring problem-solving products to the market. These activities can be broken down into seven parts
1. Understand Market Problems
Before planning a product, first understand the market’s real problems. Talk to customers, review recent feedback, and study what competitors are offering. Look for customer groups that are not being served well. If you find one, think about how your product can solve their needs better than existing options.
One should also analyze the company’s assets, including patents and research and manufacturing facilities. Proper analysis of such assets can help the company determine the best ways to leverage its resources.
2. Map Product Opportunities To Target Market Segments
This step includes creating a portfolio of all products and services the company wants to sell, along with the target market for each. The aim is to develop buyer-centric use cases for each product.
You also need to determine whether the target market is worth your time. Ask yourself —
- Can target customers generate significant revenue for your company?
- Does your product solve customers’ problems?
- Is your company best equipped to develop the product?
This way, you can create an effective roadmap. If you are not sure about something, conduct more research, talk to potential customers, and evaluate the plus points and negative points of your strategy.
3. Develop Business Plans and Pricing Strategies
Develop a business plan targeting a specific market segmentation that you have already explored. Determine the product price based on customer demand at the target location. Make sure that the price you set covers both direct and indirect costs.
You can further analyze product profitability by monitoring the overall market performance of the products. Your manufacturing costs, customers, and competitors will change over time, so you need to regularly update your prices to keep up with the market.
Moreover, make sure that the design and production team remains innovative through the product development cycle.
4. Start Product Positioning
While most of the time is spent on product development, only a few organizations consider how customers will perceive the product when it’s available in the market. It’s important to show the target audience how your product solves their problem and why it is better than existing products. The message companies convey to their customers should evoke interest.
More specifically, product positioning involves analyzing competitors’ positions, defining a new product’s role and position among existing products, and communicating the brand’s product image. The ultimate goal is to figure out the most effective way to present your products/services to target consumers.
5. Prepare To Launch
Companies need to plan their product launches strategically, months or years before the scheduled launch date. A successful product launch requires the well-coordinated effort of several departments across the company, including product development and management team, sales, marketing, finance, customer support, and PR.
Since every company’s circumstances are unique, there is no one-size-fits-all technique for a successful launch. However, one should take care of general things like
- How does the product marketing team target the audience and stand out in a competitive environment?
- What’s the distribution strategy, and which marketing channels should be used?
- How to efficiently utilize SEO marketing, social media marketing, and paid advertising?
- Should you use a referral program to increase customer acquisition?
6. Monitor Product Performance
After launching the product, the next step is to identify how target consumers prefer to buy it. This includes developing tools for the sales department and delivering programs that can help teams sell the product more efficiently.
You should measure both quantitative (conversion rates, customer acquisition costs, social media engagement, etc.) and qualitative metrics (pre-order campaigns, internal and external feedback, etc.).
It is also important to analyze how returning customers use the product as opposed to first-time visitors. This will help you determine the product’s acceptance among new and existing consumers and thus plan future marketing strategies.
Remember, the most successful pragmatic product is the one that continually adapts to the consumers’ demands.
7. Provide Support and Evaluate Revisions
Create proper product presentations and demonstrations, and use them through multiple marketing initiatives. Utilize tools such as Net Promoter Scores and Customer Satisfaction Surveys to find defects and problems consumers might have encountered. It’s a great way to build relationships with customers and identify further product issues.
If everything has gone as planned, the issues and negative feedback will be minimal at this phase. Even if some unpleasant things do happen, make sure both automated and manual customer support are well prepared.
Important Rules
There are some practical rules that Pragmatic Marketing has laid out for product management.
1. If project management doesn’t do its job, other departments (engineering, marketing, sales, customer service, etc.) will fill its void.
2. Build the product outside-in. This increases the chances of your success.
3. Spend significant time on developing strategies.
4. Acquire as much market information and facts as possible.
5. Focus on strategies and tools that can be widely deployed across an entire sales channel.
6. Know your distinctive competence.
7. Do not over-diversify; focus on the market segments that value your distinctive competence.
8. Properly conduct win/loss analysis to improve your sales and marketing processes.
9. You need to get out of the office to truly understand how customers use your products and services and what they think about your brand.
10. Each product or service requires a product manager and a business case.
11. Precisely define the product positioning to avoid last-minute surprises.
12. When positioning the product, look for what’s important for customers (not what’s dear to you).
13. Name the product after positioning is complete
14. Provide tools and programs to support all steps in the sales cycle
Read: 13 Best Sourcing Tools For Recruiters
Benefits of Pragmatic Marketing
Organizations prefer pragmatic marketing because it increases the probability of product success. It also lengthens the product’s life cycle and makes it more relevant to the target audience.
The “outside-in approach” enables product managers to solve real problems people face in real-world scenarios. This improves the product as well as the customer relationship through continuous testing.
The pragmatic marketing framework has also been proven effective in increasing the productivity of the marketing team. It helps them design highly relevant products and spend less time planning dud projects that are likely to fail.
According to Harvard Business School professor Clayton Christensen, about 30,000 new products are launched in the market every year. And every year, 95% of those products fail to make the cut.
A McKinsey survey shows that only 40% of developed products are ever launched. Of those, just 60% generate any revenue. Even more striking, only 11% of new products that earn revenue are still active after one year.
The failure rate is so high due to poor planning, insufficient market research, and poor product management. Pragmatic marketing minimizes the chances of failure by involving the customer from day one. It helps companies build products and services with a solid strategy and distinctive competence.
Shortcomings
Pragmatic marketing involves long-term planning and significant capital expenditure. Sometimes, even if you have a great idea, it’s not worth pursuing.
Another major disadvantage is that customers are not always sure what exactly they want, which makes it even harder to identify the problem. Some consumers face highly uncommon issues, so you have to decide whether it’s worth spending resources on solving such minor issues. What if the solution you come up with doesn’t exactly solve the problem in the way users anticipated?
And since every product is unique, there is no one-size-fits-all formula to succeed.
Read: 13 Best Market Research Tools You Must Use
Frequently Asked Questions
Can Pragmatic marketing be applied to all problems?
No. To find whether the project is worth pursuing, you need to ask yourself four questions:
- Is the problem pervasive?
- Does it require an urgent solution?
- Do you have sufficient resources to build solutions?
- Would people pay to get the solution to this problem?
If the answer is yes (to all these questions), you have identified a gap in the market. Now you can start acquiring more information about the problem to build a viable solution for the target audience.
What is a Pragmatic Marketing Certification (PMC)?
PMC is a marketing certification offered by Pragmatic Institute. The institute has a strong track record of providing real-world insights, best-in-class tools, and practices to product managers worldwide. It has certified more than 200,000 professionals to date.
The certification focuses on strategic planning and product design for the company. It also teaches how to prioritize requirements, develop products, build customer relationships, increase profits, and apply data science in marketing.
How much does pragmatic certification cost?
Pragmatic Institute offers 8 courses: Foundations, Focus, Design, Build, Market, Launch, Price, and Insights. Each is a 7-hour course and costs $1,195 (one-time fee, excluding taxes). You can opt for in-person courses or join live online classes.
Read: 9 Different Types of Penetration Testing
What’s the difference between pragmatic marketing and agile development?
Both are very similar approaches, but there are some core differences between the two. Agile development involves rapid improvements in the product. It is ideal for handling inconsistent changes based on customer feedback.
While agile development is typically actioned on an ad hoc basis, pragmatic development requires more input from a wider audience. Moreover, agile techniques can deliver products sooner, but not necessarily launch to an eager customer base.
