What Is Product Strategy and How To Create It? [Examples]
This article contains:
- What Is Product Strategy?
- Why Is Product Strategy Important?
- What Are the Types of Product Strategies?
- What Are the Elements of a Good Product Strategy?
- What Are the Indicators of an Effective Product Strategy?
- How to Create a Product Strategy?
- What Are the Product Strategy Examples?
- Common Fundamental Product Strategies When It Comes To Selling a Product in the Global Marketplace.
What Is Product Strategy?
The product strategy is a detailed plan that lays out your company’s goals and how it plans to achieve them.
Such a plan acts as a map to develop your product and its features.
Since it is detailed, businesses use it as a reference point to make crucial decisions.
It helps ensure everything gets done correctly on time.
Some of the critical questions that the product strategy answers are:
- Which user persona does this product serve?
- How will they benefit?
- What are the company’s objectives throughout the product life cycle?
The product strategy also outlines how the product will help the business grow.
It explains the user problem that the product will solve and maps its impact on the customer and the company.
Once the product strategy is clear, you can define your product to know what you need to develop and when.
The product strategy helps understand the product’s success before, during, and after its development.
You can always count on Chisel to create roadmaps out of your product strategy.
Moreover, you can also align team members and build customer connections once your product strategy is in place.
Sign-up for our free forever version today!
Why Is Product Strategy Important?
One of the importance of product strategy is that it clarifies what the team should do.
That will result in increased productivity.
Direction and communication are more precise with a well-drafted product strategy put in front of them. Your development team will understand what kind of impact the parts they develop will bring. Their contribution toward the larger strategic goal will be more evident to them.
It is possible that the team loses track due to the vastness of the project and gets caught up in intricate details.
At such times, the importance of product strategy becomes clear.
Your sales and marketing teams will be able to communicate the benefits of your product and its unique selling proposition.
However, it becomes problematic when the strategy is not defined because it generates frustration and the loss of sales. Moreover, the customer support team will be able to understand the product better.
This results in providing better customer support which creates better customer satisfaction.
Are you looking for a way to keep your customers happy and satisfied? Look no further! With Chisel, you can easily implement their feedback and recommendations into your product, ensuring their satisfaction and loyalty to your brand.
Enhancing Strategic Decision Making
The product strategy lays the foundation for the product roadmap.
You can convert it into a detailed action plan.
Skipping this step of drafting the strategy is common mistake companies make.
What happens without a product strategy is the failure to guide decisions. The team may prioritize the wrong items more than the right ones because strategy is absent.
Such an approach causes the misuse of limited time and resources at their disposal.
In contrast, suppose your product strategy comes before your product roadmap. In that case, you and your team clearly know how to go about, what you should accomplish, and what to prioritize.
That helps make your product roadmap more informed.
Bonus: Learn How to Create an Effective Product Roadmap
Prioritizing the Roadmap
Often, organizations don’t follow the exact roadmap that they drafted in the beginning to launch the product in the market.
Over time, the product roadmap goes through constant tailoring, though not a complete change.
Thus, product managers should be prepared for these adjustments and modify their plans and priorities accordingly.
We recommend you sign up for the top product management software available in the market that helps you create and customize the roadmaps.
With a clear product strategy, you and your team always have a reference point to fall back on.
Let’s say you lose your resources or your estimated deadlines change. In that case, you can make more tactful strategic decisions to adjust your plans.
What Are the Types of Product Strategies?
The Cost Product Strategy
The cost product strategy is effective when your organization aims to create the best product at a less than average price. It analyzes at which stages your company can save money and resources. Such analysis helps use them to their full potential.
Low-effort product companies such as toys and house cleaning items find the price product strategy beneficial.
They’re markets where customers have very little brand loyalty towards any specific company. The product that costs the cheapest immediately becomes the customer’s favorite.
The Differentiation Product Strategy
It is vital to have a unique selling point for your product launch. There are several ways that your product can stand out in the market.
For instance, it could be a luxury product with the best raw materials available.
Or it could be a natural beauty product with absolutely no chemicals.
Your product itself can be unique or have a special feature.
The differentiation product strategy highlights your product’s unique selling point. Such a practice helps enhance the user experience and make it memorable for them.
The Focus Product Strategy
This product strategy is applicable when your organization has a large customer base.
Usually, companies that employ this product strategy need to break down their customer base into several personas.
You want to know which buyer persona is the most relevant to your product.
The focus product strategy helps personalize solutions for particular buyer personas.
This creates brand loyalty during market penetration and acquires new customers.
The Quality Product Strategy
This product strategy acquires customers looking to shop for high-quality products in the market.
The quality product strategy makes your product stand out from your competitors. They heavily invest in the production process.
When you implement this product strategy, the cost of production turns out to be higher, resulting in the product’s price.
However, this doesn’t stop some customers from looking for such a high-quality product.
Suppose the product counts as a luxury item. In that case, many customers will be willing to pay you the price if they love the product.
The Service Product Strategy
Customers don’t just buy the product for its experience but also their interaction with the company.
Many organizations use the latter to their advantage. This tactic is what we call as service product strategy.
Suppose your company sells mobile phones with a one-year guarantee and customer service after the purchase.
In that case, potential customers are more likely to buy from you than your competitors.
Establishing solid customer-care support should be a priority. Such a support system can respond to queries and complaints and provide a convenient after-sales service.
It goes a long way in gaining trust and building brand loyalty.
If you wish to learn more about the product strategies for successful business, click here.
What Are the Elements of a Good Product Strategy?
This element of product strategy has two subsections – product vision and market vision.
Product vision refers to the objective of your product that it wishes to serve over the long term.
SpaceX’s vision is to facilitate research in space while making other planets habitable. You can consider such a vision concise and static by nature.
On the other hand, market vision talks about your target customers using your product and how that will benefit the business. Market vision is the gist of the market plan to make a competitive offer.
The mission statement follows the vision of your company.
A mission is the action strategy for bringing the vision into a reality.
Your mission should always be tactical and highly detailed.
Do not confuse the mission with business plans because the mission provides insights into how the vision unfolds in reality.
Mission statements help create a strategy toward the organization’s vision.
The mission also explains the product’s purpose and what the team can do to bring it about.
The mission statement is written by conducting thorough user research and developing the persona.
A product strategy is incomplete without goals and objectives.
These goals are specific to achieving points in the development process.
Goals in the product strategy prioritize tasks in product roadmaps.
SMART goals are the best approach to go about with.
When setting goals, they need to be relevant, achievable, and time-bound so that there is a sense of urgency to achieve them.
Once the product vision and mission are defined, the next step is to plot the product strategy you would like to implement.
This step is an art since it involves finding leverages and competitively exploiting them to achieve your vision and mission.
The product strategy needs to be very tactical with a sense of where the tasks are implementable and achievable.
A common mistake is when companies aim to be on top.
If you have a tactical plan around this, it becomes a strategy. Being number one is the content of the vision or mission.
Initiatives come from product goals and are more conceptual.
Initiatives are a significant chunk of complex objectives you can break down for your team to achieve in small actionable tasks.
Examples of initiatives are improving customer satisfaction, upselling new services, and entering the new industrial territory. In that case, you can make more tactful strategic decisions to adjust your plans.
What Are the Indicators of an Effective Product Strategy?
We cannot do much about a bad product strategy since it fails.
However, the good ones have something in common.
Our experts have gathered all those factors and listed them here:
There Is a Strong Sense of Purpose
If you are building a product without a product strategy and instead just for the sake of it, it’s a wasted effort.
Like humans need a sense of purpose to survive, products should also have a reason to live.
That reason can be to solve a problem or serve the good.
This is the first step to reflecting your product’s purpose.
Understand Customer Needs and How They Change
You make all the products for customers.
Ultimately, the end-users make the company and the product successful.
It would be best if you based the product strategy on making the customers happy with their purchases by satisfying their needs.
Often, customers don’t know what they need. In such cases, product strategy should bridge what customers say and what they need.
Remember that your customer’s needs are dynamic. In that case, it becomes crucial to keep updating your product strategy.
Bonus: Customer-Led Product Strategy – The Future of Customer Service
Understand How You Add Value
Products and users are interdependent and exist in a budding ecosystem, not in a vacuum.
Every organism serves a purpose and adds value to the ecosystem cycle. Similarly, every product has value and purpose that can contribute to humanity.
Of course, some conflict exists. However, it is vital to keep updating the product’s role when the ecosystem changes to keep an effective product strategy in place.
Being Prepared for Change
Since we cannot predict the future, staying informed and vigilant about relevant events is essential.
An organization can anticipate crises and prepare for change.
The change isn’t always negative.
It could also serve as an opportunity to expand your business.
We highly recommend agile business models to be flexible rather than rigid towards change.
Action for Change
As mentioned above, being prepared for change is essential.
However, that is insufficient if you don’t have an action plan.
For instance, suppose there is an earthquake, and you never told your staff to use the stairs instead of the elevator.
In that case, your preparedness doesn’t suffice.
When a crisis hits, your team should be ready to implement a product strategy to make the best out of the situation.
Delivery companies like Amazon introduced safety measures like no-contact delivery during the pandemic. They gained brand loyalty, which eventually benefited their business.
Suppose you implement a product strategy but never measure what kind of impact it brings to the company.
In such a case, you may never understand if you are doing the right thing.
That is why measuring every product strategy you implement is crucial.
It would be best to keep track of the product strategy’s progress.
Key performance indicators (KPI) highlight progress and warn about potential dangers. Using product management tools such as ALM software, you can keep track of your product’s performance according to your KPIs and make the necessary changes when needed.
How to Create a Product Strategy?
Establish Your Product Vision
Your product vision is the foundation of your product strategy, roadmap, and backlog. As a product manager, you need to define your product vision carefully. It involves removing unnecessary fluff and focusing on the most critical factors contributing to product success. You can use templates for defining product vision statements to create feasible, simple statements that align with your company’s objectives.
Determine Your Target Customer
To create a product that resonates with your target market, you need to understand the qualities, statistics, psychometrics, behavioral characteristics, issues, obstacles, and expectations of your ideal customer. Completing a thorough questionnaire will give you a clear picture of your ideal potential client and what you need to do to satisfy them.
Value Proposition of the Product
Your product’s value proposition refers to the unique identifier that sets your product apart from its competitors. To develop your product’s value proposition, you need to understand the challenges it aims to address and how it will influence your product. Your research findings should get included in your product strategy.
Finding the Perfect Market Fit
Creating a product with consideration of the demand is a bright idea. You need to create a product with a unique proposal that meets the demands of a market and its prospective clients. This step in creating a product strategy involves identifying target consumers and providing them with the appropriate product or solution. Make sure your product vision gets wholly linked with market demands.
Establish the Organizational Objectives
Clear business goals are necessary to assess performance through specified metrics. Conduct a SWOT analysis, create objectives based on the analysis, examine them with your team, and choose the best ones. Set SMART objectives (Specific, Measurable, Attainable, Relevant, Time-bound) and KPIs to track their progress.
Create Innovative Ideas
Product initiatives are the big goals that go along with the product goals. Break down initiatives into smaller actionable pieces using roadmaps that include everything from features to goods to platforms.
Make a List of All Potential Stakeholders
Identify your stakeholders, including internal and external stakeholders, industry partners, key influencers, investors, the C-Suite team, industry media, and your target audience. Prioritize them based on their needs and create a relational environment to help you realize your product idea.
Considering the Longevity of Your Product
A robust product strategy should always incorporate a long-term outlook on your product’s growth, expansion, and eventual decline. As a product manager, preparing for the final stages of your SaaS product is essential. Therefore, it’s crucial to answer the following questions while building your product strategy:
- What is the expected time frame for your product’s evolution?
- What potential risks and hazards should you be aware of?
- What variables could pose a threat to your current situation?
- What are the various possibilities for your product’s decline?
Now that you have a clear product vision, goals, and a solid understanding of your target audience, your focus as a product manager should be on developing a plan in collaboration with your entire product team for better results.
Once your product strategy is complete, you can use it to create a roadmap. However, implementing your plan will take time, and you’ll need to evaluate it regularly to ensure that it’s clear enough and still effective.
What Are the Product Strategy Examples?
Let’s have a look at the product strategy example, Nike.
We will cover how Nike marketed its vision and fulfilled its product goals.
They successfully carried this out with initiatives.
Nike’s focus has always been on innovating products like never before.
They have done this since they set foot in the market in 1971.
Nike focuses on crafting technology-driven fashionable shoes to adapt to the changing times.
They understood the significance of product strategy and did precisely that with their new product- the Nike air zoom mercurial.
They tested the machine on the football players too.
The team at Nike did market research and concluded that they could use the airbag tech to build their next shoe.
Once they set their vision, the product teams built their business goals.
The one thing that distinguished this shoe from the others was its dynamic movement which helped footballers.
Football players could gain an extra bounce of energy lift with each step.
With research, teams understood where they must place the zoom airbag.
Finally, Nike created a plan to convince the existing customers to buy this new product.
The team planned initiatives to give the customers a peek into how the product worked and its benefits.
2 Fundamental Product Strategies To Sell Your Product in Global Marketplace.
Before embarking on the journey to market the product, a company must decide on two major product strategies.
The two fundamental product strategies that companies can choose from are:
Standardizing the Product
When a company standardizes its products, it keeps the product the same globally.
The product will not change its core to fit into the local markets.
Customizing the Product
This process means customizing the product to fit local needs, lifestyles, and habits.
The product customization will not be drastic, and it varies from company to company.
A company can decide to customize a product by understanding that particular country’s culture.
You can customize only a few things of a product, such as a name, size, and functionality.
Customizing your product for specific markets entails localization, which is the process of adapting your application to suit a different language and culture. Localization involves adapting every aspect of your app to fit your target market’s preferences, including unit and currency conversion, date formats, cultural norms, legal regulations, and different technological standards.
It’s hard to win anything without a product strategy, including product development.
Those who use product strategy are those who end up achieving their goals.
To read all our expert blogs on product strategies, click here.