A product strategy is a high-level driving force that helps in accomplishing the plans for the product. It is a detailed plan that can be different for a startup and a well-established company. A product strategy answers some fundamental but valuable questions such as who are the end-users, what are their requirements, how the product benefits them, and the growth of the product in its development.
With the increase in competition, the importance of strategy has increased tenfold for the accomplishment of the product. When a startup sets a foot in the market, it’s necessary to lay down the strategy so that they can minimize the input and maximize the output. With limited resources and time in hand, a good product strategy helps startups move fast and turn to a new solution for a better result.
An established company focuses on adapting the new features of the product or creating an innovative product altogether. The strategy in both conditions may differ. But, they mostly emphasize increasing the value of the product. If they already have a product, they need a strategy that can retain their customers along with new customers.
A product strategy is a connection between the vision and the roadmap. It begins with creating the vision and forms the base for an effective roadmap and following product releases. It enables the company to focus on a particular market and set features accordingly, instead of trying for everyone. There are some needs that it focuses on:
Market research helps you assess the main trends to anticipate how the market behaves. It is an important step in associating with new market sections, new products that are to be developed, and opting for the target markets.
Market research also helps in measuring the effectiveness of your marketing, how people will react to your product, or how well they are aware of your product. The results can give you ideas on how to increase the awareness of your brand.
A product strategy gives a clear picture of the path of product development and encourages the team to work efficiently. It helps different teams to stay focused, understand the product better and enhance the features of the product according to the consumers’ needs.
When we have a baseline for the product, it becomes easier to take major decisions in product development. An initial idea for the product does not remain consistent at the end as it replaces the new ideas according to the customers’ needs. Product managers need to be calculative about new ideas and take quick strategic decisions.
The decisions will be taken by the product manager for the product. What if they have made decisions but don’t know how to prioritize them? Chaos in order may lead to unproductive sprints and misuse of resources. This is when a product strategy saves a team to prioritize the decisions so that they have a clearer picture of what they need to accomplish.
When you create a product strategy, you start with identifying the market problems that your product can solve. Having a strong product strategy helps in supporting your business’s ability to turn the idea into a profitable product and tailor it to remain in competition within the market. A product strategy unveils the areas for upgrading the product as well as which procedures will be useful for success.
Some essential points are considered while creating a product strategy:
When you want your astounding business idea to transform into a reality, you need to define your customers or the market for it to be accepted. The research can help in getting acquainted with them and thereby changing the features of the product according to the requirements of customers.
Customer acquisition needs to be an ongoing focus for most businesses. Your product may appeal to some but not to others. It’s important to understand the strengths and weaknesses of the target market for the product. The bandwidth of the customers can be increased by asking for referrals or coordinating with complementary businesses or promoting your expertise.
Present-day customers trust traditional advertising less than before. Together with sales promotion, advertising, and personal selling, marketers need to create innovative content strategies as well as promote the product through social media which turns out to be an effective tool to win the trust of new customers.
Determining how your product can solve the problems of your customers will increase the value of your product. By adding customer support or offering premium features, will draw more attention of new customers towards the product, while it can offer a great deal to the existing customers.
Growing your business without knowing your competitors is risky. Though researching your competitors is easier than it may seem. It can be done by analyzing what they do better than you. Do their products, services or experiences are of better quality? Is their marketing more captivating? Do they offer more value? The answers to these questions will help in getting familiar with the competitors.
Amazon: Amazon’s product strategy is entirely based on customer needs. They work backward from the press release to the product. This is the strategy that focuses on Amazon’s internal process, of pleasing their customers to create a product that satisfies them. Let’s look into Amazon Prime. An internal press release was written focusing on the problems of high costs and slow deliveries of the product, why they had failed to correct these problems, and how their new product would solve these problems. And ‘Amazon Prime’ solved these problems and appeared to be what their customers need.
Spotify: Spotify breaks the forms of typical music streaming platforms and instead offers listeners a new user experience. It helps users to find music they may not have thought of and in turn, strengthens their relationship with the brand. Spotify’s success in converting the free subscribers to premium is high mainly because of audio ads (promoting the premium version of Spotify) that are slipped in between the streaming of songs for these users. The persuading factor to purchase premium lies in the idea of subscribing so that one can remove the annoyingly repetitive ads which disrupt their music experience on the app.
IKEA Store: IKEA has a strategy to focus on affordable costs at a consistent level of quality. Some of IKEA’s furniture is made from wood and some from particleboard which keeps the product more affordable. They ship and sell their furniture in flat packs which makes transportation cheaper and customers can put it together keeping the labor cost down. They have also been increasing the variety of products worldwide which offers them a competitive advantage.
Netflix: Netflix emphasizes margin growth. Their monthly retention is the key criterion. They rely on a firm and trustable brand promising “movie enjoyment made easy.” Netflix stands as a strong brand that is easy to use and provides personalization for viewers which is difficult for competitors to imitate. By digging into customers’ viewing behaviors, Netflix creates a world that launches lesser-known into stardom overnight which makes it difficult for viewers to resist. This results in an increase in viewer engagement and the subscribers stick around to see what more the platform has to offer.
When we start building a product, we have an ocean of knowledge. But we cannot create our vision, strategy, and roadmaps in one day with that knowledge. It is done by confronting the crests and troughs during the journey to reach the goal by experimenting with the product. A product strategy evolves as the product evolves. There should be enough room in the product strategy to expand while taking a route in the development of the product.
How do you plan your product strategy?
