How to create a successful product strategy?
Product strategy in marketing is the plan created by a company to launch its product in the market with the vision of the company. The product strategy helps the companies to justify their product and how it stands apart from the competitors. The product strategy also aids in keeping the different departments and teams of a company in sync to attain higher business goals.
The product strategy focuses on the key aspects of the product, such as features and functions. It helps to keep your business determined on the customer needs, market positioning, and business objectives. This way, you can launch a product that focuses on value and aligns with your company vision.
- Product strategy definition can be defined as the process of demonstrating the relevance of your product, its benefits, and how the company plans to execute it.
- The key elements of product strategy are creating a framework, identifying a problem, and proposing a solution.
- Companies can base their product strategies on different models such as differentiation, cost, quality, and focus models.
What is product strategy?
Product strategy planning refers to the entire process, from conceptualizing the product to building a set development plan. You might have got a great idea, but it’s always difficult to bring it practically as you thought of it.
A product strategy helps you plan out the product execution and the principles that will lead it. It will help you to find answers about the product before you begin the development, such as:
- Who’s your customer base?
- What problems or pain points of your customers will it address?
- What profit will the product bring to the company?
Answers to these questions will help you to validate the creation and existence of your product. This strategy will also incorporate the types of features the product will have. It serves as a blueprint for product development and the business objectives that the company aims to achieve.
However, many times the product strategy is confused with the product roadmap. A product roadmap is a timeline that defines how the different elements of the product will come together, and the final product will be made. For creating successful roadmaps, it’s vital that you have a clear vision, timelines, and goals set priorly in the product strategy.
Product strategy is the main reference point as the product roadmap changes throughout development. Usually, the tasks and goals during product development change due to challenges and feedback from testing. A company with a robust product strategy can better handle changes and create a solution that aligns with your ultimate product vision.
The importance of product strategy
Product strategy benefits companies by keeping product development aligned with both customer and business expectations. According to a report, “84% of product managers consider product strategy as their top responsibility.” There are many factors that come into play in developing a product strategy. Below we have given steps following which you can create a successful product strategy.
Define your product’s niche
A well-defined product strategy of a company specifies which niche the product will occupy once it enters the market. This helps the various teams within the company to make decisions during the development that are relevant to the product’s niche and to the target audience.
For instance, your product’s niche is a triangle, where on one angle, you have your prospective customers and your company goals on the second angle. On the third point, you have features and functions of your product that make it different from others brands in the market.
A product strategy explains each of these points and helps to maintain a balance between them. For example, you can’t sell a product that has many features but no customer demand. Similarly, you can’t sell a product at a higher price than your competitors just to achieve your business objectives.
Briefs your product roadmap
A product roadmap is a devised plan for developing, launching, and growing your product. It helps in task management and ensures that deadlines are met. Often the obstacles and challenges in the development process may cause differences in the roadmap, which is understood by the different teams involved.
Nonetheless, product strategy informs the product roadmap directly by setting up a strong foundation. The product strategy sets the deadlines and phases of product development, while the product roadmap defines the specific methods for product execution. The roadmap that you start with is quite different than the one you end up with due to spontaneous and unexpected events. However, a roadmap that is based on a well-researched product strategy is likely to have fewer changes compared to one based on a no strategy.
Provides directions and clarity
Your product team people are not the only ones focused on the company’s goals. However, everyone within the company needs to work towards the success of the product. Marketers need to plan a marketing strategy for product and the sales team should know about the values of the product. IT and customer service teams should know how to answer the queries and doubts of the customers. The internal policies and plans should put emphasis on the points highlighted in the product strategy to maintain consistent messaging in communications.
Also, sometimes doubts might arise within teams in regard to your product. The best way to resolve confusion within teams is by referring back to the product strategy. The teams can compare the potential decisions with the product strategy to determine the right decision in favor of the intent of the product.
Components of product management strategy framework
Start with stating your product strategy to every employee involved in developing, selling, and supporting the product development. Once you have defined your product strategy, you have to create a resource for teams to refer back to as and when needed in the development. This also helps in keeping the vision of your product and company at the center of every decision that your teams make.
The product strategy framework is almost the same, even if you’re creating an eCommerce site or travel app. It must include more than a few platitudes and unfeasible goals for your product.
What are the steps of product strategy?
Below we have given the steps that the product strategy frameworks include:
- Check where you are today: What does your product do, and what are its benefits? What are its strength and weaknesses?
- Define the vision for your product: What do you want your product to do?
- Identify your target customers and their needs: What problem does your product solve, and whose problems does it solve?
- Conduct competitor research: See what’s already there in the market that your competitors are offering. Assess what can be your differentiating points.
- Analyze market trends: What are the ongoing market trends? How are your competitors performing? What change can you bring to the market?
- Set achievable goals: What success looks like for your business? How can you define it?
- Create your product roadmap: Evaluate the steps that you have to take in order to create the product as intended.
- Prioritize your actions: See what actions you need to take at first to ensure effective product development.
- Set guidelines for product strategy analysis: Check if your product development is still in alignment with your initial strategy.
By using the product strategy template, you can take the right steps in developing the product strategy. Now, we will discuss the key elements of an effective product strategy.
Elements of an effective product strategy
The final strategy of every business varies based on the company’s specific values and objectives. Nonetheless, the basis of every product strategy should have the following elements:
1. Identify your target audience
There are many products flooded in the market without any solid audience base. Most of the companies falsely believe that if they have a great idea, then their product will be well-received by the audiences. However, they don’t focus on the fact whether their product would resolve the pain points or problems of the prospective customers.
Companies should research the market priorly to ensure that there’s demand and an actual audience for the product. You can analyze how your competitors are doing and determine the features they are missing. This way, you can create a product that stands apart from your competitors.
2. Gather Customer data
To launch a product that performs well in the market requires in-depth data analysis. You can analyze your existing product data and see what customers are looking for in a product. You can conduct customer behavioral analysis with WebMaxy Analyzer to know what product features customers like and dislike. You can utilize these user insights to create the basis for your new product and take the right steps.
Data-based product strategies can help you to achieve your goal precisely. WebMaxy Analyzer is a user behavior analytics tool that comes with a multitude of features like session replay, heatmaps, surveys, user insights, and more. It collects accurate customer data insights that you can use for planning an effective product strategy.
3. Set Goals
You must set goals to establish a timeline for your product development and to set expectations for delivery from the different teams. You should begin with the long-term goals of your product, for instance, deciding the official date for the start of the development and product launch. Once you have decided on these important dates, you can divide the timeline into short phases to establish focused goals and expectations.
Make sure you set goals that are measurable and achievable. For this, you need to gather accurate data that enables you to track your progress toward your set goals. A data analytics platform like WebMaxy Analyzer can help you see your visitors’ interactions and know where they are in the buying journey. You can use the following KPIs to measure the progress of your product strategy goals such as:
- Customer Retention Rate (CRR)
- Customer Acquisition Cost (CAC)
- Monthly Visitors
- Monthly Revenue
- Customer Lifetime Value (CLV)
Examples of product strategy models
There are various product strategy models that have been developed over time to fit company’s vision with its target market. Below we have given some examples of the product strategy models that you can utilize.
This product strategy example is good for unique products. In this, the customers’ attention is grasped by distinct features or functionalities they didn’t know they were missing. For example, the mobile industry companies have been competing since years to bring out the best product. From creating wireless chargers to bendable screens to stand apart from their competitors.
In the differentiation strategy, the key is to develop a product different from what’s available in the market. There are various ways to do it, such as:
- Develop a completely new feature: This way, you can promote that your product provides an exclusive feature that any other brand does not offer.
- Include as many features as possible: Products that provide the maximum features help customers save the extra cost that they might spend in buying multiple products.
- Focus on increasing the product’s usability: Sometimes, the existing products in the market might have many issues, like being too technical and less user-friendly. By focusing on making your product easy to use and understand, you can drive customers.
This is the product strategy in which you try to differentiate your product in terms of quality, reliability, functionalities, and user experience. A quality product positions your brand in the premium category compared to other brands. For example, Apple fanatics continue to buy Apple devices because of their OS, high-end aesthetics & consistency, and digital ecosystem.
Typically, products that are focused on quality can’t compromise the price. To build the best product, you need the brightest minds and good-quality resources. This requires high expenditure, and that’s projected on the final pricing of the product. A product that comprises with quality is positioned in a necessity or a low-quality product category.
For example, a data security product can be expensive based on the claim that it provides the best digital security in the world. A company like Buggati Veyron doesn’t compromise the quality of their cars to appeal to audiences-this makes the product desirable even at a high price.
This strategy focuses on creating a good product at an affordable price. The products that are made using this strategy are cost-effective and aim to be at a lower pricing point than their competitors. You should opt for this strategy if your product is not offering something new in terms of features or other value-centric components.
For example, a company is in the business of making plastic plates. Then, their priority would be to make maximum plates with fewer resources. This way, they can reduce the production cost and the final pricing of the product. Since customers are unlikely to look for aesthetics or brand as long as they work perfectly for them.
Cost strategy is the best choice for you if you can make the development process cheaper. The lower the price of your product than your competitors, the more you can appeal to your customers on that basis. Try to keep the pricing of your product where it still gives you profit. However, sometimes the customers believe that if the product is cheaper, it can’t be of high quality. Therefore, make sure that you ensure your customers that you are selling the best, even at a low price.
This is an approach that has gained popularity over the last few years. It is a product strategy in which the focus is on creating a product that is meant for a highly specific market. In focus strategy, the companies dedicate their resources to developing features that are required by a defined segment. The goal is to create a product that performs well in a niche market rather than a broad market.
Below, we have given different product niches on the basis of which you can create your product:
- Demographic: You can create a product that targets a specific age group, gender, or vertical.
- Geographical area: Sometimes, targeting people in a specific region is easier than targeting people in far-off places. When you sell your product in distant places, the transport prices also come along. You can start by selling your product in a particular area.
- Buyer persona: You can target like-minded individuals who specifically look for brands like yours. They might not fit into particular demographics or geographics. For example, if you have a SaaS product, you can target the decision-makers or managers of your prospective companies.
Focus strategy narrows down your competition and enables you to focus on satisfying the needs of a specific group. Here, we will give you an example. 10% of people in the world are left-handed. All the scissors that were made earlier were for right-handed users. A company launched special scissors that were for left-handed users in 1967. This was the first time in human history, resulting in this company having no competition in the whole market.
Product strategy for product development
Product strategy provides support and stability to the product development process. Product strategies for new product development serve as a framework to provide guidelines and expected timelines to different teams throughout the process. Ensure your strategy is well-planned and researched because you don’t want to revise it during the product development process. Take time in the initial stages to set long-term visions for the product development lifecycle.
However, it doesn’t mean that you don’t have to modify or make changes to your product strategy ever. You need to make changes from time to time as and when required. Make sure you evaluate your product roadmap and product strategy to refine any strategy drifts that might have come over the course of time.
Remember that this strategy is an iterative process. You can make changes to your recent product strategy when your latest product plan has completed its course. You can gain accurate insights that can help you to create more effective product strategies in the future.
The Bottom Line
The product strategy is a plan to create a product from its ideation to the actual execution and the vision of creating it. It serves as a blueprint for the product development process. However, for creating a product that performs well in the market, it’s vital that you understand your target audience.
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Product Strategy FAQ’s
A product strategy framework is a set of steps a company follows to develop a product with a determined outlook and within an expected timeline. It helps companies to develop new products based on previous successful products and implement the same methods to build other products in the future.
Product strategy is the plan created by a company to launch its product in the market with the vision of the company. We have mentioned below the elements of the product strategy:
– Macro Environment
A product strategy bridges the gap between your product vision and the steps you need to take to develop it. For example, WebMaxy Analyzer helps businesses gain accurate data insights and make data-driven decisions.
Strategy framework is the method used by businesses to make strategic and tactical plans to achieve their future business goals. A strategy framework includes an action plan, the company’s vision, and short-term & long-term goals like yearly objectives.