PRODUCT STRATEGY: TYPES, HOW TO MAKE AND EXAMPLE - DUDAS - 2025

The product strategy is a set of achievable goals and visions that work together to align the team around desirable results for both the business and customers. It arises from the path to travel towards the achievement of a goal. In this way, different initiatives are tested around the characteristics and platforms of the product.

The primary goal of this strategy is to align executives and other key stakeholders around how the product will achieve high-level business goals. A product strategy is the foundation of every product life cycle.

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As product leaders develop and adjust their product strategy, they focus on the target audience and define the key attributes necessary for both the product and the customer for success.

Purpose of the strategy

All great products start with a clear customer and market-oriented strategy. The strategy defines the direction the product is going to take and what you want to achieve.

Establishing a strategy first aligns the organization and keeps everyone focused on the work that matters most. It tells the team where the product is going and what needs to be done to get there.

It also provides the product manager with clear direction to guide his team through the entire implementation and communicate the value of the product to cross-functional teams such as sales, marketing, and support.

What is a product strategy?

Creating a successful product requires planning every step of the process. It is crucial to differentiate yourself from the competition and give customers a reason to choose the brand. That's where product strategy comes in.

A good product strategy will outline the steps necessary to bring an idea to life and make it successful.

Companies have a bold vision, a roadmap that defines which products to build to achieve that vision, and a product strategy that describes how product development will align with the business vision and strategy.

Every time a new product is launched on the market it is difficult to predict how far the product will go or how it will be constituted. In those moments, companies design the product strategy.

Therefore, this strategy is defined as the vision of the product. If a company launches a product, then it must have a vision of where the product will go.

It is the basic planning of the steps that ensure that the product reaches the desired space. It helps to establish the correct direction for the product.

What is it for

The product strategy determines all the steps that a brand will have to take to make the product a success. On the other hand, the brand also has to decide what to do if the product fails and does not gain ground in the market.

It helps decide the basic elements of a product, such as the marketing mix and design. It also helps to target the product to the correct segment, to expand the product line, etc.

The product strategy describes who the customers are, how the product fits into today's market, and how the business objectives will be achieved. It also helps the work team to focus on what has the greatest impact on customers and the business.

Types

In general, four types of product strategy are used. Each type has benefits that can be adapted to any business.

Market leader

A market leading strategy develops new and innovative products in an attempt to grow the market more and more.

A market leader invests heavily in research and development to create new products that set themselves apart from their competitors.

This can be an expensive strategy, making it difficult to implement in a small business, but the benefits can be substantial.

Challenging

The challenging strategy is similar to the market leading strategy. A challenger invests heavily in research and development to create products that are innovative and stand out from the competition.

The main difference between the challenging strategy and the market leader is that the market leader is the number one company in the market, while the challenger is trying to take that place.

Follower

Companies that use a follower strategy don't invest much in research and development. Instead, they use innovations developed by other companies.

As a result, the products are derivatives rather than originals, and therefore have lower prices.

An excellent example of this product strategy is found in the pharmaceutical industry, where some companies manufacture generic versions of drugs, rather than developing their own.

Niche

The niche strategy involves developing a product for a smaller segment of the population. For example, a software producer might focus on the educational niche, or even more narrowly, the high school niche.

This strategy can be beneficial for small companies with limited resources, as these resources can be implemented efficiently, focusing on the needs of the market niche.

How to make a product strategy?

It takes a lot of product analysis to develop a strategy. These are the steps to make a product strategy.

Marketing mix

The product is the most important element of the marketing mix. Product design plays a crucial role.

This is because a change in the product leads to a change in all the other elements of the marketing mix. The marketing mix depends primarily on the product for elements such as promotion, point of sale, and price.

In this step the main aspects of the product and its contribution to the marketing mix are decided.

The marketing mix should be considered when deciding on the product strategy. Aspects such as the breadth of the product line, what its packaging will be like, and what type of labeling it will have must be taken into account.

Levels of a product

A product has several levels. A salesperson needs to take on the various levels of a product when deciding on a product strategy.

For example, an automobile manufacturer must provide service to the end customer in addition to the product. If the manufacturer does not provide service, then the product will not sell.

Therefore, the manufacturer has to understand the important role of an "augmented product" in the product strategy. Without the various levels of the product and their proper implementation, the product strategy can fail.

kind of product

There are several types of products. When deciding on the product strategy, you should consider what type you want:

- Durable / non-durable product.

- Specialized / convenience article.

- Industrial product / mass consumption.

Deciding on the type of product helps determine how to penetrate your target market. This step will determine which segment the product will target.

Differentiation

There are several possibilities to differentiate a product. these flags can be used:

- Shape and characteristics.

- Performance level.

- Reliability / durability.

- Style and design.

- Ease of installation.

- Customer service and warranty.

These are critical elements for any consumer to make a decision. By creating product differentiation, the product strategy becomes a solid strategy to compete on a level playing field with competitors.

Products mixture

To serve the various types of customers that exist, a company can propose a mix of products so that each customer is satisfied with different variants of the same product. Take shampoo as an example.

Anti-dandruff shampoo is the most requested. However, the major shampoo brands have a variety of products that they offer with minor differences in ingredients. This is a mix of products.

Since a large market share is covered with almost the same product, the product mix must be seriously considered in the product strategy.

Example

Suppose you are a product manager at Uber, the platform that allows drivers to register.

View

The company's vision is to make Uber an economical and efficient alternative to both owning a vehicle and taking public transportation.

In other words, Uber wants people to use its platform as the only source of transportation.

Main challenge

First you would like to see why some people are taking other transportation methods instead of Uber.

Interviewing people reveals that in certain cities where Uber is not so popular, there is a very long waiting time to get a car.

This is compared to other problems to determine how large it is comparatively. Suppose it turns out to be the biggest challenge right now.

Therefore, the first goal to be addressed is to reduce the waiting time in cities where it is extremely long.

Let's say it is too long more than ten minutes on average. It wants to be reduced to less than five minutes, because it has been seen that in cities with that waiting time, people are 80% more likely to use Uber.

This would be the goal: reduce the waiting time in cities where it is greater than ten minutes and bring it to less than five minutes, before the next three months.

Goal

It seeks to discover what causes this long waiting time. The problem is that there are not enough cars to serve that area. So now a metric is important to get new leads.

The goal must be measurable and achievable. For example, before three months, at least one driver for every 50 people must be incorporated in each city.

To incorporate the new drivers, you must first calculate how many drivers you have per person in each city.

Then you will find the obstacles that prevent the registration of new drivers. Finally, each obstacle is eliminated until the goal is successfully achieved.

References

1. Aha (2019). Introduction to Product Strategy. Taken from: aha.io.
2. Melissa Perri (2016). What is Good Product Strategy? Taken from: medium.com.
3. Hitesh Bhasin (2018). What is Product Strategy? How to develop a product strategy? Marketing91. Taken from: marketing91.com.
4. Scilly (2019). List of Product Strategies. Small Business-Chron. Taken from: smallbusiness.chron.com.
5. Andra Picincu (2019). Product Strategy Examples. Taken from: bizfluent.com.
6. Wikipedia, the free encyclopedia (2019). Product strategy. Taken from: en.wikipedia.org.