> Small Business Tips > Start Your Business > Protect Your Ideas

Protect Your Ideas

Product Basics

Products may be described in terms of their features and benefits. Features are product characteristics; benefits are customer needs served by those features. Some examples of features are size, color, horsepower, functionality, design, hours of business, and fabric content. Benefits are less tangible but always answer the customer's question: What's in it for me? While product features are usually easy to define, product benefits can be trickier because they exist in the customers' minds. The most compelling product benefits are those that provide emotional or financial rewards. It's not the brighter smile that the toothpaste offers that is its benefit; it's what the smile might bring you (a good-looking mate, a better job, etc.). Emotional rewards run the gamut of human emotions, but basically allow the buyer to feel better in some way. For example, sending flowers to a friend or family member allows the buyer to feel supportive or loving. Buying products made from recycled materials offers the buyer the chance to feel environmentally responsible. Products that deliver financial rewards allow the buyer to save money (e.g., a discount long-distance phone plan) or make money (e.g., computer software for managing a home-based business).

Discovering Your Product's Benefits

To identify your product's benefits, you must consider your customers' needs. Imagine yourself in your customers' shoes, talk to them directly, or conduct surveys asking about their needs and perceptions. If possible, hire an independent firm to conduct a focus group with a sample group of customers to test your product for usability and desirability. Examine customers who have purchased your product in the past. What do their customer profiles tell you about your product's benefits? Once you have a basic sense of your product's benefits, you can set up systems to develop and track their evolution:

  • Ask customers for suggestions for improvement.

  • Pay careful attention to customer complaints and prospect inquiries. Train and reward employees for questioning customers and prospects to learn what they like and don't like about your product.

  • Watch your competitors. Do the changes in their product offerings suggest product benefits you hadn't yet considered?

Why is it important to understand my product's features and benefits?

Understanding product features and benefits allows you to:

  • Describe your products in terms relevant to your customers.

  • Differentiate - explain how your product is different than the competition's.

  • Effectively choose pricing and positioning strategies. Refer to strategy ideas below in "Strategies that are based on features."


Products may be highly unique (specialty products), virtually indistinguishable from competitors' products (commodity products), or in between these extremes. No level of uniqueness is necessarily better than any other, but they do require different marketing strategies. A potentially important strategy for specialty products is differentiation, which sets them apart from the competitors' products in the minds of customers. A thorough understanding of how your product's benefits compare to your competitors' allows you to compete effectively with them through differentiation.

  • Commodity Products - Few, if any, perceived differences among competing products.

  • Specialty Products - Highly unique features compared to other products competing for buyers' dollars.

Strategies that are based upon features

  • Introducing - Identifying yourself as the first to offer a new product feature is a proven competitive strategy. For example, specifying a product as the first organic body lotion containing Vitamin E will position your company as a leader, at least for a while.

  • Improving/Modifying - Instead of being at the head of the pack with a totally new feature, you might modify or improve your product's features, which creates the impression that your company cares about satisfying its customers. Modifying product features is a strategy many businesses use when a competitor has lowered prices. For example, if the maker of one organic body lotion lowers its price, the maker of another may add Vitamin E as a new and improved feature but keep its price the same. It is important to remember that modifying features usually leads to changes in benefits. Stay aware of the evolution of perceived benefits your product offers so you can use them in your marketing.

  • Grouping - Often, features are grouped into different product models — and prices — escalating from a basic model to a fully loaded model. Automobiles, electronic devices, and vacation packages each offer features that may be added to a basic product model. Services can also be grouped in this fashion. For example, an accountant might offer a certain fee for preparing annual tax returns, another fee to also process payroll, and another to manage all of a client's financial affairs.