A Chinese proverb says, “When the wind blows, some people build walls, others build windmills.” This shows that different people have different strategies to respond to any event. Strategy is necessary in every business since it determines all the steps essential to achieve success. Some businesses have a misunderstanding that they don’t need a product strategy at all or it can be optional. We can see several products looking for users in the market since they were produced without understanding the target audience. These products solve problems that do not exist. Incorrect solutions can be fixed, but solutions cannot be found for problems that do not exist. The essence of strategy is choosing what not to do. So, rather than depending on your instinct in product development, it is important to create a product strategy.
What is Product Strategy?
Product strategy is the vision of where the product will reach, i.e. it is the planning of the steps to make sure the product reaches the desired market. Such product strategy helps in deciding the fundamental components of a product and accurate direction for the product as well as it helps in targeting the product to the appropriate segment.
In short, product strategy gives details of who are your customers, how your product fits in the market, and how it will attain your business objectives. The product strategy plays a significant role in focusing on what will have the most considerable impact on your business and customers. Thus, product strategy explains journey of the product from deciding its strategy to reaching its destination.
Components of Product Strategy
There are four key components of a product strategy - customers, competitors, your business and the macro environment. We will see these in brief:
Customers play a significant role in every business and so, it is necessary to develop a product that customers want. Therefore, before deciding a product strategy, ensure that you have a strong understanding of who your customers are and what are their needs.
Every business has competitors in the market that play a significant role in product decisions. A product strategy describes how you position your product to your customers compared to other products in the market.
Chief objective of every organization is to make money and provide a return on investment to its shareholders. The product strategy explains how the product will earn money and attain business objectives.
4. Macro Environment
Macro environment involves economic, political, technological and cultural factors that may create an effect on your market and product over the short and long term. The product strategy should consider following factors:
- Emerging markets having demand for your product
- Emerging methodologies that may have an effect on your customers
- Evolving customer needs and conduct
- Economic factors that may affect your customer’s requirements or budgets
Significance of Product Strategy
1. Product strategy decides the accurate steps to be taken to have a product successful.
2. It helps the organization in deciding the target market and market penetration.
3. Product strategy prepares the company for changing market conditions and competitors’ responses.
4. Product strategy helps in deciding the entire journey of the product.
Thus, designing a product strategy is significant for every business to succeed. To develop a product strategy, you should first identify the market problems to be solved. Over the time, your product strategy will change as you learn more about your market and other different markets. Understanding your market scenarios, developing your product strategy, learning more about market and evolving your product strategy is a circular process.
How to Develop a Product Strategy?
To develop a right product strategy, you need to analyze product, competitors, market and different segments. To develop an accurate product strategy, following steps are needed:
1. Product Design
Product design plays a significant role in the product success and is the first step in developing a product strategy. There are several similar products in the market, the only difference among them is their design. Keeping in this mind, we designed a watch-like wearable device for one of our clients. Similar to wrist watches, it is also worn on wrist and shows time, but along with this feature, it also assists parents in keeping track of their little ones. Thus, the unique design of the product differentiates it from other similar products.
2. Levels of a Product
Every product has different levels, major three of which are core product, actual product and augmented product. While developing a product strategy, you should consider the different levels of a product. While designing any product, we ensure that the design is not only appealing but also implementable and can be developed. We understand the crucial role of the actual product in the product strategy.
3. Type of Product
There are different types of products in the market, viz. durable/non-durable products, shopping/specialty/convenience goods, industrial/consumer products and service products. While developing a product strategy, it is necessary to consider which type of product you want to target. This will help you to find an appropriate way to penetrate your target market. While designing a product for one of our clients who wanted to target banking professionals, we designed a core banking solution to help them in performing the banking operations efficiently.
4. Product Differentiation
There is huge differentiation in products based on product features, performance levels, reliability, durability, ease of installation, customer service, warranties and guarantee. By creating product differentiation, a sound product strategy can be developed to compete with the competitor. We design products for our clients that have unique features and provide seamless user experience. This gives our clients the product differentiation that offers them an edge over their competitors. We place our clients at the heart of our operations and focus on how users feel about the product design.
5. Brand elements
Brand image and brand identity are the considerable brand elements for company success. So, while setting a product strategy, you should decide brand elements for the product that give more recognition for the product and gather more respect for your product in the market. While designing products for our clients, we embed their brand elements in the product design. So, our designs create our clients’ brand awareness in their customers’ minds. Such brand elements give recognition and adoption of the product in the market, so they should be created at the product design and strategy stage.
6. Product Mix
At times, a single product might not get recognition in the market, but its product variant can be an instant hit. While designing a lifestyle app for a renowned club in USA, we designed products that can be used by club members and admin. We added a variety of features in order to cater to their different types of customers so that all customers are satisfied. Since same product covers a large market share, product mix should be strongly considered in the product strategy stage.
7. Marketing Mix
While deciding the product strategy, you should consider the marketing mix. You should also consider different aspects of the product like product line and length, product packaging and labelling. Basically, this step involves deciding the core aspects of product and its contribution to the marketing mix. So, while designing an application for Kirana store users, we decided the different product lines and length of a single model. We also decided overall look and feel of the product apart from considering the impact of all these expenses on the marketing mix.
So, these are the significant steps that should be followed while developing a product strategy. It helps you to design the product journey and prepare for its future according to which you can give targeted direction to the product. In essence, product strategy is the foremost tool that justifies user experience decisions. So, if you are working on a product or adding new features to an existing product, ensure that you take all the decisions strategically. And if you want experts to help you in this, feel free to contact us anytime through https://www.yujdesigns.com/contact-us/
"A vision without a strategy remains an illusion." - Lee Bolman