Mark McDonald

Enterprises face the need to develop new offerings – products and services – that capture and retain the attention, interest and economics of their customers.  This makes product development a critical process for current and future revenues.  Offerings evolve over time under the influence of multiple pressures but with the same objective to create a superior value proposition.  One path to reach this objective is to craft offerings previously only available to the wealthy in a way that they are available to the mass market.

Massification is a crude term, but it reflects the transformation of a product or service that was exclusively available to the wealthy that is now accessible to a broader market.  This is a common occurrence in retail, known as mass fashion, when an exclusive designer releases an entry level or low cost version of their product.  This can be death in high-end retail where the value proposition and brand are based on exclusivity.  However, for many companies, this represents a path to opening new products and services.

Massification is a relatively low risk product strategy and therefore opportunity for capturing growth and market share.  Its lower risk as the solution space is well defined and has obvious appeal in its current high-end market.  It has marketing appeal as well as people aspire to the needs and solutions in this marketplace.

Massification occurs most often when services provided to the wealthy are re-platformed into information-based products for a broader market.  Think of tax preparation and the shift from your accountant to Turbo Tax or other tax software.  There are others Charles Schwab and eTrade in stock trading or Quicken and Fidelity in wealth management or WebMD and other medical web sites.

Technology in general and software specifically has the ability to take these services and make them available on a wider basis.  The trick in this product strategy is to find the rules associated with the particular professional product or service and then embed those rules in your channel.

Recognize that the goal is to provide 70-80% of the required functionality so people will recognize the service, but at 10-20% less cost than its premium counterpart.  Supplement the other 30% of functionality that cannot be provided with value-added services – for example Quickens tax review or audit protection services.

Healthcare is on the edge of going through this type of transformation as a way to extend assess, enable self-management and manage costs.  A massification approach will be required to handle one or more aspects of chronic disease management that threatens to overwhelm current medical delivery models.  This is a space to watch as the initial wave of medical information web sites gives way to medical product and service offerings.

Massification creates disruptive innovations that are changing professions and industries described by Clayton Christensen and others.  It offers a lower performing, but good enough solution at a price point that opens broader markets to these products and services.  Technology plays a key role in making this work from the product itself through the supply chain and operations that drive the scale efficiencies needed for profitability.

What are the massified offerings you are using?

What are the similar offerings your company provides?

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Category: Strategy Tools     Tags: IT and Business, product innovation

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