The centerpiece of solution marketing—or product marketing for some—is value creation. This is where the needs and motivations of a company and its customers intersect.
It is absolutely essential to invest time and effort in developing appropriate solutions that will delight customers. This requires a constant effort to assess and maximize the full portfolio of solutions by identifying growth opportunities and consolidating action plans to develop the right solutions and win customers, both now and in the future.
Rather than seeing the market as a hostile and challenging environment, where both competitors and customers are viewed as adversaries, the focus should be on winning with customers who value and appreciate the solutions you bring to the market.
This creates a win-win situation where customers choose your solutions because they meet their needs and fulfill their objectives, aligning with the values, benefits, and features as outlined in the Value Ladder from the previous chapter.
Two key questions are addressed: first, how to manage the portfolio of solutions, determining where to invest and the best path to bring those solutions to market; second, how a solution is developed and how value is demonstrated.
This chapter is no doubt about the work across marketing, engineering, manufacturing, financing and many other functions to determine the future solutions offering for a company. Those activities must aligned with the various topics related to value and must be addressed simultaneously.
There is in fact no viable solution until value creation, value pricing and value selling are fully aligned, meaning that price positioning and selling approaches are adequately addressing the solution that is designed for this specific targeted customer segments.
Companies have several options when deciding where to invest in future solution development. One option is to invest in new technology to enhance features, solutions, or reduce costs, thereby improving manufacturing and servicing benefits. Another option involves adding new features to existing products to differentiate them and address new customer segments.
Additionally, companies may invest in entirely new products by leveraging existing technology or acquiring knowledge from external sources. With multiple options available, portfolio management must encourage cohesion and collaboration across various teams.
One strategy involves constant improvements, where solutions are regularly updated with new features and capabilities, sometimes involving minor or major technological evolution.
Another strategy is to create entirely new solutions aimed at leapfrogging the competition. Both development models have their advantages and disadvantages. The first approach focuses on consistently bringing new solutions to the market, enabling effective communication to convey and reinforce brand value.
This provides more opportunities to assess customer needs and expectations. The camera industry is a good example of the gradual introduction of innovations. However, the challenge is that competition remains visible, with few opportunities to neutralize competitors through significant advancements. Additionally, maintaining multiple versions of solutions may confuse customers, who might feel abandoned if their solutions become obsolete too quickly.
The approach of developing a completely new solution typically involves significant risk and investment. Years of development may fail to produce the ideal solution at the targeted value and price point.
Meanwhile, competitors may have gradually developed similar or comparable solutions, making the new “breakthrough” less appealing to customers. Significant launch costs are to be expected, and during the years it takes to bring the solution to market, the company may struggle to maintain market share with aging products, potentially losing a significant portion of its customer base to competitors.
An intermediate approach combines continuous solution improvements with the development of new technology over time, releasing it when ready. All of these options are viable.
Each of these decisions involves investment, requiring various resources, competencies, and skills. However, they all originate from the need to make investment choices, utilizing finite resources.
To ensure that investment decisions fully align with company objectives and priorities it is essential to ask the right business questions. They follow the famous “why” marketing question shared in the decision chapter:
These questions need to be asked regularly. Some investments may prove less effective, or the availability of solutions may fail to meet key milestones, resulting in delays in market introduction. Aling those questions to your own business environment by focusing on essential business needs:
Risk resilience – Ensure investments target multiple areas of market presence, both in the short and long term to reduce exposure to risk.Ultimately, long-term, sustainable, profitable growth is the goal for most companies. Maintaining a clear focus on company objectives and priorities is the best approach to determining the right course of action among the many available options at any given time.
Value creation is the combined efforts of multiple teams. To organize this effectively, it is both practical and logical to structure value creation into two distinct processes.
The first process is portfolio management, which provides an overview across all programs. It helps structure, prioritize, and monitor programs based on company priorities. This process involves finance, management, and solution management teams. The second process is solution design and development, where cross-functional teams work together to create solutions.
By organizing these two processes, individuals required for one or the other can participate as needed. Portfolio management offers the opportunity to make budget allocation decisions while monitoring spending against targets. Solution design and development is the domain of product/solution teams who work on developing solutions and contribute to discussions in portfolio management.
Portfolio management involves making decisions about the company’s investment budget and allocating different budget lines to the development of solutions and the technology components that make up those solutions.
It can also include investments in sales and service, for example, when the goal is to expand into new market segments that require specific sales and service infrastructures. Many other types of investment decisions can be made as well. Select the link below to access tools and recommendations for Portfolio Management.
If you need motivation for value creation, please read this article from IMD: Value Creation in Business.
For a good and useful reading about value propositions, visit: How to Write a Value Proposition.
Solution design and development fall under the domain of product/solution teams, who are responsible for creating solutions and contributing to portfolio management discussions.
Designing solutions can be a lengthy process, and management techniques along with QMS (Quality Management Systems) provide guidelines for solution development. These tools are fundamental and can be used by teams to articulate their program development, but they are not covered in detail on this website. For more information, please consult dedicated sites such as: ISO 9001 Help: ISO Templates.
For details on product development phases, various sites offer recommendations on organizing product development, from the early phases where product concepts are considered, to when prototypes are developed, validated, manufactured, and then delivered and serviced. See the following resources:
Portfolio management is a core activity where a company evaluates its approach to solutions development and makes both short- and long-term investment decisions. 
By establishing consistent mechanisms, teams from various business functions can stay coordinated and collectively make key decisions.
To maximize transparency and clarity in these decisions, various techniques can be employed. The tools described in the Decision chapter are essential, along with additional tools such as Price vs. Value Mapping, Portfolio Management, and Strategic Position Analysis.
Value creation is a process with multiple steps and is certainly recurrent. In each iteration, new projects can be decided upon, and some may be terminated, while the majority of reviewed projects will continue until completion. These investment decisions will influence all company branches and functions, preparing solutions offerings and organizing the company to sell, deliver, and service those solutions.
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The methods and tools presented in this section are essential for value creation and for evaluating how value is perceived by customers at every stage. The Price Value Map, for example, is a critical tool for product teams considering new products or configurations for different market segments. This tool provides a clear visualization of how customers perceive the performance and price of your products compared to competitors, helping teams identify pricing opportunities and competitive positioning.
The Price Value Map is especially valuable for sales teams working on complex offerings, where customer decision cycles may take months. It allows teams to map solutions—both from your company and from competitors—for specific customers, making it indispensable for large and complex deals.
Given the multifunctional nature of teams involved in value creation, a variety of techniques can be beneficial. Lean Six Sigma approaches, such as value stream mapping, emphasize quality and process improvement from product inception to development, helping to align internal processes with customer value. Quality Function Deployment (QFD) is another valuable tool, translating customer needs into features and characteristics while considering costs for optimal market positioning.
Additionally, consider using scorecards and comparison tools to assess solutions and capitalize on market risks and opportunities. These approaches ensure that your solutions remain competitive and can potentially displace previous generations of products when introduced to the market.
The following section may include tools, some free, some with a fee to support this site development. If you consider a tool should be presented in this section and is missing, please let us know at: contact@marketingdecision.org
Before acquiring a solution, it is important to compare the solution’s ability to meet needs and expectations with its proposed price. The Price-Value Map is a tool that allows for the independent comparison of these two dimensions—value and price—by representing them on a graph with these two specific axes.
In the case of complex purchases, sophisticated scorecards are usually developed to evaluate and compare solutions from different suppliers. Alternatively, customers may evaluate and rank solutions based on their preferences and needs. In all cases, a perceived value is assessed, and solutions can then be compared with their price before a decision is made. This is precisely what the Price-Value Map enables.
This tool is naturally used by customers, but it is also widely employed by marketing and sales teams for various purposes. For sales, it serves as a tactical tool to assess and compare competitive offerings with their own, helping to determine sales tactics, including pricing strategies. For marketing, it provides an approach for considering long-term positioning across their own range of solutions, as well as competitive offerings for all segments served by the company.
Portfolio management involves making decisions about the company’s investment budget and allocating different budget lines to the development of solutions and the technology components that make up those solutions. It can also include investments in sales and service, for example, when the goal is to expand into new market segments that require specific sales and service infrastructures.
Therefore, portfolio management is not limited to products or solutions; it also includes technology and other resources required to deliver new solutions to the market. All aspects requiring investment—whether material or immaterial—should be considered. The evaluation of return on investment should broadly include all activities essential for introducing a solution to the market.
Portfolio management is a core activity where a company evaluates its approach to solutions development and makes both short- and long-term investment decisions. By establishing consistent mechanisms, teams from various business functions can stay coordinated and collectively make key decisions.
A portfolio graph is a tool that displays solutions from the company—and sometimes from competitors—along a vertical axis representing the relative value of each solution. Different graphs are created for different market segments, where perceived value varies, and offerings are listed to highlight positioning and sales tactics.
This approach emphasizes value mapping. By comparing the relative values of solutions, the goal is to facilitate discussions on how each solution’s value and positioning should be addressed, both within the company’s offerings and against competitors. While price ranges can be mentioned on the graph, the vertical axis should focus on perceived value, not price, to ensure discussions stay centered on value.
This tool is particularly effective for marketing to demonstrate how company solutions compete with those of competitors in various market segments. It enables collaborative discussions between Marketing and Sales teams on sales arguments and positioning strategies.
The strategic Position Analysis Tool is an effective approach to analyze and discuss both current and future offerings in comparison to the market. Many solutions may be conceived, but which ones will be better positioned to succeed in the market place? And which will enhance competitiveness? This is the objective of the Strategic Position Analysis tool.
Current or future solutions can be mapped along two axes: “ability to compete” and “market attractiveness.” Solutions can be compared for their market fit as well as their strength relative to the competition. Teams can evaluate the various options available and discuss which solutions are more aligned with company objectives, enabling better allocation of limited investment budgets.
Explore tools related to the topics covered in this section. For a wider selection, visit our webshop using the link below, or continue browsing our marketing mix pages for additional insights and solutions.
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