When you’re considering developing a new product for your business, it’s critical to have a solid product marketing strategy in place. The way you market your product shouldn’t be an afterthought. It’s something that needs to be considered during the very early stages of your product’s inception and followed through at each step of the product roadmap. For a successful product launch, make sure your marketing and product development teams are aligned.
TL;DR (Too Long; Didn't Read)
Product strategy is the roadmap for describing what the product is and why customers should want to buy it.
Understanding the Importance of Product Strategy in Marketing
An effective product strategy has many benefits for the company. It helps the business to establish a goal they want to achieve with the product and outline a series of steps in order to get there. This kind of tactical plan, as part of the product strategy, can help the business mitigate risks, increase profits and gain customer loyalty.
A product strategy also enables the company to understand its position in the marketplace. By doing thorough competitive research when developing their product strategy, businesses can identify which areas of the market are oversaturated and where opportunities exist. By taking advantage of gaps in the marketplace, businesses can cement their success in a particular area of their industry.
Another key benefit of having a product strategy in marketing is that it allows businesses to understand their target market. Through extensive research into customer needs and subsequent market segmentation, businesses can identify consumers that are willing to buy their products. They can also learn about what benefits and features consumers are seeking so they can develop products that are tailored to their unique needs.
Focusing on the Needs of the Target Market
The foundation for a product strategy is the target market. A business must have a deep understanding of who they're selling to. The needs, wants, likes and dislikes of their target market will affect the kind of product the business will create.
Instead of catering to everyone, businesses use market segmentation to appeal to a specific group of the market. This enables them to offer customized solutions that resonate with that specific group of people. There are four key ways to segment the market. These include:
- Demographic: Businesses can group consumers based on age, gender, race, ethnicity, religion, occupation, household income, family status and more.
- Geographic: Segmentation based on physical location, climate, population density and size of region can also be used to understand a market’s particular needs.
- Behavioral: Businesses can segment consumers based on their attitude towards products, where they are in the sales funnel, how familiar they are with the brand and how frequently they use the product.
- Psychographic: Looking at consumers’ attitudes, opinions, beliefs, values, interests, hobbies and other lifestyle traits can help businesses to better understand them.
Segmenting consumers based on one or more of these four areas can help businesses better understand what they're looking for in the market. For example, if a bakery is considering creating a new line of products, they may target women ages 24 to 39 who value health and wellness and physical fitness. This customer persona will then help the business to create the kinds of products that will appeal to their market.
Developing the Product Vision and Goals
In your product strategy, it’s important to establish the vision for the product. This will help the marketing team create engaging messaging and will also help product developers to understand what the business wants to achieve. A product vision for a new line of athletic wear at a clothing business may be to create stylish and affordable clothes that people feel comfortable working out in and socializing in.
Another mission-critical part of a successful product strategy is to define the goal. Why is the business focusing on this product and what do they want it to do? This will help the marketing team extrapolate the goals of their campaigns. Product goals may be to capture interest from a new target market, penetrate a new geographic location, become the premier leader in the category or achieve the highest sales in a particular price point.
Determining Your Product’s Place in the Competitive Landscape
No product strategy is complete without considering what the business’ competitors are up to. Businesses need to research the products their direct and indirect competitors are selling. This will help them to see where the market is flooded with products and where there are opportunities for growth. For example, if there are already several low price-point handbag options available, a business may choose to offer theirs at a high price point and convey exclusivity and luxury.
Creating a Product Roadmap
A product roadmap is a strategic document that guides different areas of the business that work together to create and sell the product. The product roadmap will contain different elements depending on the audience. Be sure to create a tailored roadmap for which area of the business you’re sharing it with. Elements of the product strategy that may be included in the product roadmap are:
- Vision and goals: Outline what the business hopes to achieve with the product.
- Target market: Which area of the market is the business targeting with their product? What are their characteristics, needs, likes and dislikes?
- Market position: Describe where the product will fit into the current market. What competitive products are available?
- Features: What can the product do and what makes it unique? How does this product differ from others already available in the marketplace?
- Benefits: Specify what value the product brings to the consumer. How does it help the target market solve the problem they're having?
- Milestones: What are the key dates the business needs to hit for the release of this product?
- Resources: Outline what the company will require in terms of funds, expertise, equipment and personnel to achieve the product vision.
A product roadmap for product developers will include more information on features, milestones and resources, while a roadmap for marketing will include more information on customer benefits and target market. It’s best to customize the roadmap for the audience it’s intended for.
Establishing the Other Elements of the Marketing Mix
The marketing mix, which is the foundational strategy businesses use to engage consumers with their products, includes product, price, place and promotion. When developing the product strategy, it’s important to also consider the other three marketing mix elements to ensure they're all aligned. The product strategy definition also includes figuring out the price, place and promotion of the product:
- Price: How much is the target market willing to pay for the product? Is this lower or higher than the competitive products that are on the market?
- Place: Where will the business sell the products to their target market? What's the easiest way the business can sell to consumers?
- Promotion: How will the business communicate the benefits of the product to the target market? Will they use advertising, personal selling, direct marketing, sales promotions or public relations and in what combination?
Creating the Right Messaging
Positioning the product so it will appeal to the target market is one of the critical components of the product strategy. Businesses need to ensure that their messaging differentiates their product from competitors while clearly outlining what makes it unique. Focusing on product quality, reliability, durability, process, materials or style can help the business showcase the value of the product to consumers.
It’s important to specify the benefits of the products to consumers over the features it offers. Businesses need to consider the needs of their target market and align the benefits of the product to those specific needs. This helps create messaging that resonates directly with their target market.