Designing and selling a new product frequently begin with a workable product plan. A thorough strategy that outlines the elements of the product, the company’s goals, and the main target markets for the product can be distributed. By knowing the importance of a product strategy and how to create one, you can set clear expectations for the development and marketing teams and provide customers with a high-quality product. In this post, we define a product strategy, examine its significance, outline how to develop one, and offer a sample strategy for your consideration.
What Is A Product Strategy?
Knowing the answer to the question ‘What is a product strategy?’ can help you understand the benefits of developing it to reach more audiences and grow sales and revenue with an effective strategy when planning to launch a new product. A product strategy is a comprehensive outline of a new product’s development and expected performance. It specifies the product’s function and identifies the demographics of who can derive the maximum benefit from its use. The strategy includes information about the market that can affect the product’s sales, such as the introduction of comparable products by competing brands or shifts in consumer purchasing patterns.
It also describes the company’s post-product-launch objectives. If you are preparing for the launch of a product, you may develop a product strategy before the development process begins, so that you can ensure there is a set plan to meet specific company or product objectives.
Importance of Product Strategy
Following are the importance of product strategy:
Communicate a clear vision
A successful product strategy informs teams of the company’s objectives and the necessary steps to achieve them. Designers and developers share a common understanding of a product’s appearance and functionality, allowing them to create a product that fulfils the brand’s vision. Professionals in the marketing department use the same vision to create anticipation in target audiences and promote special features to boost sales. The customer service team provides the correct instructions to those who purchase the product, which can satisfy consumers and convert more prospects. The product strategy ensures that every employee adheres to the same principles.
Make effective decisions
Throughout the product’s life cycle, following a product strategy can help make informed decisions. Once you recognise the company’s objectives, you can determine what resources to employ and the steps to take to succeed. For instance, if a cosmetics company wants to launch a new line of lipsticks within the next three months, you can establish a budget, assign team members who are available to work and create a schedule for making and promoting the lipsticks. As development progresses, you can use the strategy to determine how to respond to challenges and implement process changes.
Prioritise the roadmap
A product strategy is a comprehensive, high-level plan. It is essential for the development of detailed and more specific plans. Your product strategy directs the product development roadmap, which includes determining which tasks are more prior and require completion first. It is similar to directing the developer in determining how much time they require investing. It also serves the same goal for other departments working on or for the product.
How to Develop a Product Strategy
Here are the steps you can follow to develop a comprehensive product strategy:
1. Define a product vision
The product vision describes the objective of the product you are developing. Promoting the vision to team members can help ensure that you advance through the development phases smoothly and efficiently. Consider what contemplated you to design the product and its potential impact on end-users. Put your thoughts in a sentence on your product strategy. For instance, if you are trying to develop a new software application, your vision may include a description of the benefits the program can offer users. Here is another example of a product vision:
Example: Develop a user-friendly programme that enables users to make their own short movies.
2. Calculate ideal outcomes
Consider the outcomes you want to see after the product’s launch and quantify the expected outcome to help you measure your success. For instance, if your goal is to increase the company’s profitability, you can specify the profit you hope to achieve. You can also include a timeframe in product strategy objectives. Consider the duration of your product’s life cycle and define a time when you hope to achieve the goals. Try to ensure that the goals match the product’s vision and are achievable given the available resources and time. Here is an instance:
Example: Grow user downloads by 60% in the next 15 months.
3. Explain product initiatives
Product initiatives are distinct and concise elements of a product strategy. They describe the product’s intended functionality in relation to the company’s comprehensive goals. You can use them to delegate tasks to team members during product development. For instance, if the purpose is to improve brand loyalty, the product initiatives may comprise adding the brand logo and colour scheme on product packaging, enabling personalised usage recommendations and enhancing the aesthetic appeal of the user interface (UI). Review your list of objectives and consider the smaller steps you can take to achieve them.
4. Describe customer traits
It is essential to understand what customers look for in products they purchase and how to entice them to make purchases. You can position your product to meet their requirements, which can increase sales, encourage them to share positive feedback and make future purchases. User research can also help you identify any concerns they may have about purchasing the product. For instance, if they perceive the product to be expensive, you can justify the high-price point in advertisements.
Use the customer’s point of view to determine which product features are most likely to appeal to them. For instance, for a smartphone, consumers may prefer a camera that can record high-definition videos and capture high-quality photographs. Now you can market these features to key demographics.
5. Analyse competitors
Competitor analysis can help you compare your product to those already available on the market. You can identify ways to improve the product so that consumers prefer it over competitors. Consider making a list of brands that have produced similar products. Record the products’ release dates, sales figures and popularity among customers. Evaluate the metrics to determine how to differentiate your product from those on the list so that you can market it to potential customers.
As the product’s life cycle progresses, it may be beneficial to remain up-to-date on competitors’ activities. You can be prepared to compete in a competitive market and adapt your strategy as necessary. For example, suppose a competitor releases a smartphone while you are developing a similar product. In that case, you can then devise strategies accordingly to promote your product to increase the relevancy of the brand you represent.
Example of A Product Strategy
Here is an example of a product strategy:
Vision: To create an affordable, full-coverage foundation that conceals imperfections and lasts all day.
Goals
To increase product sales by 50% within the first month of its release.
- Product initiative: hire beauty influencers to publish foundation tutorials and reviews
- Product initiative: perform product testing, which includes applying foundation for 18 hours and assessing its resistance to natural elements such as sunlight and water
- Product initiative: offer complimentary foundation samples to customers who spend at least ₹1000 with the beauty brand.
To increase conversion rates among new cosmetic users by 25%.
- Product initiative: attach a pump dispenser that dispenses small quantities of foundation at a time.
- Product initiative: implement and promote a range of shades that clearly define undertones and make it simple to choose the right shade.
- Product initiative: make recommendations for the brand’s other related products including brushes and sponges, which can make it simple to achieve a flawless finish with the foundation.
Customers
Demographic details:
- Teenagers and young adults
- Ages: 15-35 years
Interests:
- Suitable for all skin types
- Compatible with common primers and concealers
- Environment and travel-friendly packaging
Inspirations:
- Ability to conceal blemishes with minimal product
- Application without creases
- Affordability with the assurance that one bottle can last several months
Concerns:
- The foundation’s appearance after it oxidises
- Precision and variety of shade range
- High price point assuming the size of the bottle
Competitors
Stunning Cosmetics Inc.
- Released matte foundations with hydrating formulas
- Received acclaim from social media influencers and beauty publications
- Produced sales of more than ₹1,00,00,000 in a single year
- Planned to launch a powder foundation and tinted moisturiser by the end of the year
Lovely Beauty and Co.
- Sell liquid foundation, still a best-seller after 20 years
- Includes a variety of shades for customers of all skin tones
- Its affordable price makes it a popular cosmetic brand
- Speculated to release a medium-coverage foundation within six months