We live in a truly incredible and innovative time in technology. Product strategy in the market, both physical and digital, have really hit the gas pedal in terms of the development process. Really, it’s been the blink of an eye since the first version of Facebook or iPhone. Even more, some companies manage to produce multiple great products. But how do they do it? One of the numerous tools in their toolbelt is an effective product strategy that reaches potential customers and keeps the loyal ones happy and coming back every time.
They do this by ensuring their product strategy stays up to date and adheres to their business model along with a wealth of other factors. It’s a daisy chain of checks and balances, if you will, that help pump out products people want. We’re going to show you that you can just as easily do it too.
What is product strategy? Our definition
It should be known that there truly isn’t just one universal definition here. As such, the product strategy definition we think works best comes from the fine folks over at Hubspot.
Your product strategy is the roadmap used to develop your product or feature. It includes all of the tasks that your team needs to complete to achieve your business goals.
Effective product strategy is born from business strategy and a variety of other factors and metrics. It’s made up of the broad strokes of the product and its function within a target market. Of course, customer needs and wants must be considered, but it still needs to fit into a chosen business model. If it doesn’t, things break down fast and problems add up. To the point that you may find you don’t have a business to model anymore.
Why are new product strategies important?
Launching a new product strategy for each product is highly dependent on a few key items, which we’ll discuss more in a bit. A few things to think about in terms of why developing new product strategies is important, though. If you never create or update your strategy, you might be missing out on things that could benefit the company and your customers. You may miss new opportunities and the chance to draw a new customer base. New innovations are made all the time, and if we were still using every method concocted in the 1930s (or even the early aughts of this century), you can imagine a lot of stuff would be missing from our lives. Things that we just couldn’t go without in today’s market.
What are the elements of product strategy?
The big three product strategy elements that every project should always include are vision, goals, and initiatives. These are your base elements, and you can likely guess they branch out into subcategories. They each are part of what makes up the big picture and, of course, the end-product.
Differentiation between the three is vital because they all need to be executed to the furthest extent possible by your development team. Prioritization of this process allows you to avoid missing out on key objectives your business hopes to achieve…or flat out failing.
What are the 4 different types of product strategies?
There are so many directions this could be taken, but we’ve chosen the four we consider to be the most effective, most trusted, and most often used strategies. What we’d consider the classics; leaders, followers, challengers, and niche markets are the four we think are the most effective strategies.
You may be wondering about the differences between the elements and strategies. The elements are the “what” of the product; what are the product initiatives? The vision? The goals used to make this a successful product? The strategies (that we’ll go over below) are the “how”; how you’re going to make all of this happen for your target audience and the masses alike. It’s helpful to know the difference for the purpose of strategic planning; otherwise, you just have a list of a bunch of words and no direction on how to apply them.
And now, the four product strategies. Let’s get into it.
Leader of the pack
Being the leader means the world looks to you for the solution. Your product(s) are the go-to or may even be the only one of its kind. There are tradeoffs to being the leader, namely that failure comes with a huge cost, but if done well, it can pay off in spades. But be on the lookout because the next two strategies we discuss are always going to be coming for you.
There’s money to be made when your product vision is something nobody else has thought of. We’re likely never going to be in a world that lacks inventors, innovators, and risk-takers. But if we did, man, it would be boring. Startups will attest that things can be feast or famine when you’re leading the world into new territory. All the product development in the world can be great, but if you don’t do it right — you’re dead in the water.
Keep in mind the second something hits the market, it’s fair game and yesterday’s news. To continue on that path of success, your product team needs to already have the next version, at least in the beginning stages; product planning is a continuous pursuit in that sense. To remain successful, you’ll need to be prepared for, and embrace, never giving up and doing what it takes to stay at the top (within reason, the law, and some morals, of course).
Follow the leader
You may be thinking, “well, nobody likes a copycat,” and you’d be right. But people do like to save money, and they like options. There’s a fine line that should be carefully watched here to avoid legal action, but following a known path of a product and finding ways to slim down on price is big business.
There’s a few ways this can go. Think of products like Coca-Cola or Lays. Your grocery store typically has store brands for a fraction of the cost made by other companies (or even the name brand itself). Another example of a company following through with a cheaper alternative is Apple. And they did it within their own company. iPhone Pro and iPhone SE. HomePod and HomePod Mini. This is super effective because you’ve opened yourself up to a new market full of new customers with different pricing expectations and needs.
However, if the leader is another company and you’re creating something with similar product features, just err on the side of caution to not take it too far. That fine legal line creeps up on you quickly.
Challenge the system
Being the challenger is another excellent option — so long as you use every resource available to pull it off. There are many competing products out there that do just fine (i.e. Nikon and Canon). Some people are loyal to one product or brand more than another, and some people are comfortable switching back and forth for all kinds of reasons. But it’s completely doable.
As mentioned, you better put everything you’ve got into it because people know the difference between a crappy wannabe product and a decent cheaper alternative. So this is a great option if you’re going to seriously do it right. If this remotely seems like a drag to you, you’ve already answered your question, and you should consider another option.
A niche affair
Say it with us; “there is money in the niche market.” Somebody’s gotta do it. You’ll sometimes be surprised to find that what you consider to be niche is actually desperately needed.
One of an infinite number of examples is products for the disabled. When you don’t have a disability or don’t have the specific disability in question, it just isn’t on your mind; So when it’s compared to the rest of the market, it seems niche, but it actually has a market full of people that rely on it or have been waiting for someone to create it.
To put this in perspective, the deaf and hard of hearing often rely on subtitles. Sometimes they’re written with voice-to-text and sometimes they’re written with human intervention. The problem here is all too many times, and the subtitles can end up reading more like Eddie Vedder’s misheard lyrics in Yellow Ledbetter than what’s actually being said.
Even though it’s a smaller group of people who rely on them, you’ve just discounted a community of people who want to enjoy content like anyone else. There are products and services that are helping (albeit still a long way to go), and while this may seem like a niche market, it can be life-changing for people to do this right.
How to develop a product strategy framework (complete product strategy example)
What must companies do to create successful new products? If you aren’t asking this of your company or of yourself, you should be. The simplest answer is to create an effective product strategy and actually use it.
This doesn’t count if you just have any old strategy. It has to be great. If it passes that vibe check, keep using it until it needs to be changed. Use your resources, tools, and team. If the product fits into and/or appropriately answers to everything in the strategy and you’ve used all other resources in the process, you have a good shot at success.
To develop a product strategy, let’s use the “Challenger” strategy for these examples of a physical product. This, of course, works with digital products, and developing an effective UX strategy should be part of your overall strategic framework. Still, for ease of understanding, we’ve chosen a physical example. Something to keep in mind; these may go in a different order depending on your needs which strategy style you’re going with.
1.Identify a product to challenge
There are many products to choose from in the world, and maybe you have some ideas on how to improve them, make them cheaper or provide an improved user experience. This is the base of your product, and you need to stick to it the further you go along because changing your mind anywhere down the line costs money and valuable time. The longer you wait to pivot, the harder it’ll be.
There’s a shoe on the market targeted towards medical professionals who are on their feet all day. They’re pretty pricey but they’re a well-known brand and there really isn’t any competition. You see a way to make them just as well but at a more approachable price point.
2. Identify your market
The original product is marketed towards medical professionals, but you see it could be used by others who are on their feet a lot or even for personal use outside of a job. The problem is the casual user can’t justify the cost.
In this example, lots of people are on their feet for work or personal activities. Theme park employees, salespeople, stockroom employees, the elderly on a fixed income who walk the mall before it opens, etc. You get the idea.
3. Understand the pain points
Why are people not flocking towards such a great product? How can I improve that or make it more available to more people? What are the complaints or downsides of the product that the original brand isn’t focused on fixing that I can leverage in my product?
These shoes are great but it seems like too many people are getting priced out. Additionally, they’re sold mainly in medical uniform stores and not in places the average user would think to go or feel confident walking into
4. Define your product vision
Here, product differentiation will be critical because you can’t go getting slapped with lawsuits for making replicas and selling them under your name at whatever price. So you need to decide how yours will be different but how it still challenges the leader.
In our shoe example, this could be a whole new set of color swatches that appeal to people outside of medical professionals. You may choose different materials that are durable but more affordable. The warranty may be different. If the original goal is to offer it to more people, you’re identifying what they want and need in order to say yes and hand over their money.
5. Define what you won’t be doing
This one is often overlooked in the strategy, but it’s really just important. You know what you will do, so why shouldn’t you also have a list of things you won’t do? Things that may be tempting to do or copy, things that drive up the price and so on. Knowing what to do and what not to do helps to narrow down the process, which is exactly what you want.
The leading brand offers a lifetime warranty on the product. This, in turn, adds to the cost and is such a solid warranty, there’s really no need to ever buy a new pair. Now, you have some morals, so you’ve decided against the planned obsolescence route, but you also don’t want a cheap flimsy shoe or one that’s going to last 100 years and result in no new sales. Adding a warranty seems like a good idea but let’s add one that has some limitations
6. Take all these goals and steps to create a product roadmap
This is the exciting part. Everything you’ve come up with via these product goals will come into play here and be combined to create the roadmap with which you’ll design and produce this product.
At this point, you can begin designing, prototyping, testing and more. Here’s where the tools you’ve equipped yourself with now need to come out to play. The tools you use will absolutely be dependent on what the product is and will even vary from project to project. Although over time, you may find some you prefer over others that’ll become your go-tos.
7. Rinse and repeat
As with all things business, the fun never stops, and neither does coming up with the next idea. If this strategy worked for you the first time, you’d likely want to use it again but tread carefully. You need to ask yourself what worked, what didn’t, what complaints you got, what compliments you got and more. Reuse what worked well, tweak what didn’t.
Everything has a product life cycle. Some just last longer than others but eventually, things fade, even when new features are added. If you aren’t growing, you’re standing still and in business, that means dead on arrival.
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Our conclusion about new product strategy development
Product strategy is one of the must-have items that should be on everyone’s list. Everything from user experience to product management and marketing strategy is affected by it. To put it bluntly, success is defined by it. New product strategy development is critical to creating a product that truly resonates with your target customer. Without a thorough new product development process in place, it’s just tough to pinpoint exactly what you’re building and why. Consider adding even more depth to your overall strategy by understanding the finer points of UX strategy vs product strategy. All in all, we hope it’s now clear how this is a part of the process that should never be skipped and what the benefits of doing it right can have for your business and ultimately, your bottom line.