This blog has already addressed the different stages of Product Development Strategy. This time, we’re turning our attention to the various elements needed to formulate the right product strategy for your enterprise.
Why you need a product strategy
Having a clear, customer and market-driven strategy can be key to the success of your product. This strategy defines the direction of your product and what you want to achieve. Having a focused strategy keeps everyone on the team centered on the work that matters the most. It tells everyone where the product is headed and what are the steps ahead. A product strategy is a framework for the entire product lifecycle. As product leaders develop and adjust their product strategy, they determine the target audiences, pinpoint the product’s niche and define the key product and customer attributes necessary to achieve success.
Strategy is often thought of as consisting of three parts: vision, goals, and initiatives.
The vision includes details on the market opportunity, target customers, positioning, and the Go-to-Market plan. It describes who the customers are, what they need, and how you plan to deliver a unique offering.
Goals are measurable objectives that have clearly defined success metrics and are constricted by a time frame.
Initiatives are the high-level endeavors that pave the way for achieving your final goal, like reducing production costs or improving software performance.
Elements of a product strategy
When defining your product strategy be sure to consider the following aspects:
To define your target customer or market, you must identify whom you are selling to, and what that market looks like. The process of determining the target customer for an innovative product differs from the process used in a more established marketplace because the latter is based on already existing product categories. A startup’s product is assumed to be innovative and potentially disruptive to the marketplace. And so, determining the target customer requires a more qualitative approach.
It’s crucial to define how potential customers will perceive your product compared to competitive products and understand what makes yours unique in the market. Few, if any, products enter the marketplace in a vacuum. Your product must compete with a range of similar items on the shelf. Product differentiators are identified by learning the pain points of potential customers and finding solutions for their problems. This will also help you to work out a value statement and formulate the benefits that customers will receive with your solution. This understanding will then become the foundation of your marketing strategy.
When bringing a new product to market, your pricing strategy can vary depending on a variety of factors. You must take into account total production costs and how long you can afford to wait to see a profit, as well as less obvious components, such as the legal restriction in places where you sell. You will have to determine what represents an acceptable level of profit, in both the short and long term, and set a price that reflects those goals. If you want to maximize market share, you might set a price that produces a small profit above total production and marketing costs rather than aiming for high short-term profit by setting a higher price.
For a product strategy to be viable it has to have a predefined beginning and a set ending. You must create the strategy timeline and develop milestones for measuring the progress of the campaign as part of defining your strategy. A schedule makes it easier to create deadlines for items such as product improvements, development of marketing materials and reaching revenue projections.
A product strategy that clearly defines your vision is the foundation for planning your product roadmap. It allows everyone, from stakeholders to team members, to visualize the path ahead of them. Visualizing strategy as a roadmap helps you link releases and features to initiatives and goals. Seeing it all in one glance allows you to analyze your strategy at a high level, discover any gaps and lead the way to success.