Definition of the Product Strategy and Go-to Market Strategy
‘The bonus that is achieved when things work harmoniously is synergy.’ Mr. Mark Twain has rightly said.
If you think about the job, skills, and responsibilities of a product manager, it largely is about establishing perfect synergy between multivariates. Balancing different ideas at once and using all of them together for the product is the core responsibility of the product manager.
In order to achieve this, market strategy and product strategy should go hand in hand. The market strategy defines the market in which the product will compete and how it will do so. It also defines what market needs the product intends to address.
The product strategy, on the other hand, is all about developing products that can be successful in the chosen market. It defines what features and benefits the product should have, how it will be priced and what channels it will use to reach customers.
The go-to market strategy refers to the product life cycle that goes into the market after its market entry strategy. A market entry strategy is the market penetration that a company aims to achieve to enter the market successfully. The market is usually divided into three categories:
- Emerging markets
- Developed markets
- Declining markets
It takes different marketing strategies for each segment.
A market can also be divided into three different market entry strategies:
A market may be entered with an established product or by developing a new market. A market may be entered with a product that is already known to the market and has been proven successful. This is called market development strategy, such as entering a market such as Russia for Western companies that want to enter this market before their competitors do.
The product strategy refers to how a product will be positioned by the company inside of the market it enters through its go-to-market strategy. The definition of product positioning refers to how one particular brand stands out compared to its competitors within a given market by emphasizing certain attributes of the product over other attributes.
The product strategy is typically market-driven, meaning the market research is driving what new product developments are made. This market research is how the market’s needs, wants, and demographic analysis are determined. The marketer will use market segmentation to define a product market for its new products. Product managers should identify their customer segments so they can determine which market segment(s) they should target first with this new product.
The product management and marketing teams typically work together to sync up their plans.
Distinguish Between the Product Strategy and Go-to Market Strategy
Now that you have read about the definition of the two strategies, let’s embark upon the discussion on the key differences:
1. Why is the strategy made?
Product strategy aligns the company around the shared goal and objective of the product and its improvements/enhancements.
Go to market strategy is focused on the market needs and how best to reach the market.
2. How are new products discovered?
Ideas for new products come from different places – some internally, some externally.
The product strategy is about sorting through all of those ideas and selecting which ones to pursue.
The go-to market strategy is about executing the chosen product ideas.
3. What are the key features of the products established by the strategies?
The product strategy establishes what the key features of a product should be to achieve the company’s objectives.
The go-to-market strategy decides how best to communicate these features to the market and position the product about competitors.
4. Where should we focus our time on the strategies?
Product strategy and product management should focus on creating a product that is differentiated in the market, that is feasible to produce at scale, and that customers will want to buy.
5. Who makes the strategy?
The product strategy is made by the product leader, who is responsible for the vision and direction of the product.
The go-to market strategy is made by the marketing team, in collaboration with sales.
It is important to have close collaboration between marketing and sales so that the market strategy can be tailored to the needs of the customer and the sales process.
6. What does the strategy consist of?
While the go-to market research comprises market sizing, market segmentation, target market identification, market trend analysis, and competitive analysis.
7. What is the nature of the strategy?
The product strategy is flexible and goes on till the life cycle of the product. As market conditions change, your product strategy will have to be changed too.
While the go-to market strategy aims at determining the market that a company wishes to serve with its products or services it is hence not as flexible.
Every company needs to determine the target market carefully as it helps it understand what customers are looking for and how it can best serve them using their resources efficiently without wasting time on markets they cannot enter due to lack of resources, etc.
Go to market strategy determines which market segments should be targeted by a firm’s marketing effort and involves decisions about market coverage, market depth, market focus, value-based pricing strategies, positioning strategies, branding issues, and consumer perceptions of product differences between competitors offerings.
Typically companies try to address market-level strategies first because they take longer and have a bigger impact on the business than product or go-to-market strategies. However, you don’t want to neglect either the product or go-to market sides, as they are both essential to a successful market strategy.
The product strategy and the go-to market strategy are extremely different in every aspect. However, an adroit product manager gives importance to both of them equally because both are integral to the success of the product.
While a market strategy is important for the big-picture view, a product strategy is what allows your company to execute on that market strategy and achieve success.
A market strategy without a corresponding product strategy will fail, no matter how well executed. Likewise, a product strategy without a market strategy in place is doomed to failure. By understanding and aligning these two strategies, your company can create and bring successful products to market.