Product strategy - why do you need it?

Launching a new product in today's market is no easy task. Entrepreneurs have to face enormous competition and the challenges that come with it. The chances of success depend not only on the innovation and attractiveness of the product, but also on the chosen strategy. What exactly is product strategy? How should it be prepared? And why is it advisable to use a consultancy agency in this area?

What will you learn from the article?

Nowadays, when the market is saturated with a variety of products and services, the importance of positioning oneself appropriately in the business space becomes crucial. product strategywhich is fundamental to the success of any business, however, requires the right approach and an understanding of market needs. In this blog post, we will show you how to apply product strategy can make a difference to your business and how developing a Product strategies is the first step towards achieving a competitive advantage.

product strategy is a roadmap that defines how a product will compete in the market. It includes the selection of target market segments, the positioning of the product, and the planning of its features and functions so that it meets customers' expectations better than those of competitors. The basis of any well-developed product strategiesj is an in-depth understanding of its customers and the market in which the company operates.

What is a product strategy?

Business success does not happen by chance. This is the result of consistent action according to a detailed plan. Without proper preparation and an appropriate strategy, it is impossible to achieve the set goals. This principle applies to all areas of business - including the introduction of new products to the market.

Effective in today's highly competitive market product launch is an art. The entrepreneur should have a broad knowledge of market mechanisms, marketing, sales and advertising. Before launching a product on the market, it is necessary to analyse and define the needs, behaviour and purchase path of our potential customer. It is also necessary to research the market and its requirements in order to prepare, on the basis of the collected data, a detailed product strategy.

product strategy is a document describing what the company wants to achieve with its product and how it intends to achieve it. It is an action plan, a kind of guide containing a list of tasks to be performed and pointing the way to an effective one launching the product on the market. It can also be defined as a set of activities that are to adapt the product to the requirements of the recipients. The strategy is implemented from the very beginning of work on the product and is continued throughout the entire period of operation of the product on the market. Strategic activities end when the product is withdrawn from the market.

product strategy gathers all the information about a new product in one place. This ranges from the characteristics and expectations of the target group, a description of the competition and the market, the name, logo, design and product features to a description of the chosen marketing and sales strategy.

What does the product strategy consist of?

Product strategy is developed according to specific rules, which are dictated by the current market situation and the company's internal operating conditions - including the state of machinery, raw material resources, human resources and financial resources. According to M. Panczyk, the product strategy must be coordinated with the other marketing-mix strategies.

We can distinguish 3 key elements that make up the product strategy. These are:

1. product vision - description of who will use the offered product and how it will affect the business; the vision places particular emphasis on the way of product positioning and the form of competitive advantage,
2. product goals - what the company wants to achieve by launching a new product on the market; goals should be timed,
3. product initiatives - description of individual activities that are to lead to the achievement of specific business goals.

Furthermore, in product strategy should include information on:

• packaging, scope of warranty and after-sales service,
• product life cycle,
• tools and molds for monitoring the product life cycle.

What can you gain by preparing a product strategy?

In 2005, the Nike brand released the Nike Free running shoe, which differed strongly from previous models. Many people did not support this decision. Mainly this was related to the fear that the new product would not appeal to the brand's target audience. However, Nike has proven that it is capable of creating new trends and thus achieving spectacular success in the market. The success of the entire project has been due to a well-conceived, well-thought-out and well thought-out design. product strategy!

product strategy is, so to speak, the preparation for the product launch and the vision for its development. It gives the entrepreneur full control over his or her product, and this in turn increases the chances of ultimate success.

Step by step product strategy

Preparation product strategy is a multi-stage process. To begin with, the target group must be carefully analysed and, in particular, the needs and behaviour of potential consumers of our product must be defined. A good solution is to conduct professional and comprehensive marketing research (quantitative and qualitative) on the target group. Based on the data obtained, a portrait of the consumer is created.

The second stage of work on product strategy is a market analysis and forecast, i.e. a sales vision for the entire product category for the coming years. For market research, you can use, among other things, the concept of Porter's 5 Forces, SWOT analysis or other method as needed.

It also matters a lot competition analysis, with an emphasis on the quantity and quality of market rivals as well as their strengths and weaknesses. Methods such as SWOT or PEST are used to research competition.

The focus should then be on the product itself. It is crucial to define the product properly. This involves identifying the essence of the brand, opportunities and threats (SWOT analysis), preparing the pricing strategy, the selection of product recommendation sources, the definition of the USP/ESP, the positioning of the product, its main benefits.

In the process of working on product strategy there can be no lack of consideration for sales, promotional and communication activities. The company should:

• choose distribution channels and define ways to reach customers,
• choose the method and form of communication with customers,
• prepare a promotion plan, including determining the expenses and places of promotion.

It should come up eventually product strategy in marketing, i.e. a forecast of sales development and product profitability. It also sets out a detailed timetable for implementing the strategy.

Preparing an effective product strategy is a challenge

Preparing an effective strategy requires full commitment, appropriate skills and extensive knowledge. Undoubtedly, experience is also useful in avoiding the mistakes most often made by laymen. To make sure that each stage of strategy planning goes without any complications, entrust the entire process to professionals. The above-average skills of specialized consultants may prove to be invaluable support in creating a strategy.

How to develop the right product strategy?

1. Market and competition analysis

The first step is to conduct a thorough market and competition analysis. This allows you to identify trends, needs not met by current products and potential market gaps that can be exploited. This is the foundation on which you will build your strategy.

2. Understanding the customer's needs

Understanding what your customers expect is the key to success. You should carefully investigate what problems your users have and how your product can solve those problems. Methods such as user interviews or analysis of market research data may prove irreplaceable.

3. Defining your unique value proposition (UVP)

Your unique value proposition is what sets your product apart from the competition. It should clearly communicate the benefits that the customer will experience by choosing your product.

4. Product development and testing

After defining the UVP, the product design and development stage begins. It's important to test your product with real users at every step of the process. This will allow for a quick response to feedback and possible adaptation of the product to changing market requirements.

5. Market entry planning

The final stage is planning the product's entry into the market. The most important thing here will be to determine appropriate distribution channels, pricing strategy and marketing activities aimed at building brand and product awareness.

The importance of customer feedback in product strategy

In the process of creating Product strategies, it is crucial to take customer feedback into account. Regular collection of feedback makes it possible to adapt the product strategy to the real needs of the market. This enables effective planning product development strategywhich translates into its market success. User feedback provides valuable information that can identify areas for improvement within the current Product strategies.

Product lifecycle management in product development strategy

Effective product lifecycle management is an integral part of product development strategy. Each stage - from launch to growth, maturity to decline - requires a distinct approach within the Product strategies. For example, during the introduction phase, intensive promotion is key, in line with the objectives of the product strategy. As the product matures, innovation may be necessary to sustain customer interest, and this should be included in the strategy.

Types of product strategy

There are various Product strategiesto effectively manage the company's offering. A modification strategy is important, involving the systematic improvement of existing products in line with customer expectations. In this concept, a key role is played by market analysis, which indicates the directions of necessary changes in the offer. An interesting option is also a differentiation strategy, offering products that are clearly different from the competition in terms of functionality, design or prestige. It is worth identifying example of a product coreor key value - such as the reliability of electronics or natural ingredients in cosmetics. Appropriate product strategy build sustainable competitive advantage and increase market share.

Basic assumptions of the product strategy

The classic 4P concept provides the basis for effective product strategyallowing companies to achieve their business goals. It is based on the 'Product' element, which defines the characteristics and quality of the product and defines its key asset, which can be, for example, a 'product'. the core of the product, for example the comfort of a garment or the taste of a beverage. Another 'Price' pillar involves determining the optimum price, which is appropriate to customers' expectations and the brand's position in the market. The 'Place' element relates to distribution channels, determining the availability of products to end consumers. 'Promotion', on the other hand, concerns the effective communication of the product's value to customers. All these elements must be consistent to ensure the effectiveness of the implemented Product strategies and achieve the sales targets set.

Why use product strategies?

Thoughtful and consistently implemented product strategy is crucial to the long-term success of a company. It ensures that a company not only retains its existing customers, but also successfully attracts new ones by constantly refreshing its offering. A well-designed product strategy allows the company to react quickly to changing consumer preferences and adapt its offering to their current expectations. An important advantage of a strategic approach is also the ability to effectively exploit the company's potential by investing in products with the highest growth potential. By clearly defining example of a product core, such as safety in white goods, the company responds precisely to the needs of its target group.

Who should be commissioned to develop a product strategy?

Structure product strategy plays a key role in shaping the success of any business, regardless of its size or industry of operation. It is a comprehensive plan that defines how a product is to be designed, developed, marketed and maintained. All of this is done to meet customer expectations and achieve the company's business goals. Product development strategy is not only an innovation roadmap, but also the foundation on which a company's competitive advantage is built.

Understanding customer needs and preferences, analysing the competition, and defining unique product features are essential to effectively develop a strategy that responds to the dynamically changing market environment. A properly designed structure product strategy allows a company not only to effectively manage the product life cycle. It also enables it to maximise its value for users and optimise internal processes, resulting in increased profitability and shareholder value.

Consulting agency is a professional consulting company that supports entrepreneurs in various areas of business. Her offer may be comprehensive advice, covering many business areas or assistance in a specific aspect. One of them is strategic consultingwhich may include, inter alia, full preparation of the company to introduce a new product to the market.

The consulting agency conducts detailed strategic analyses, comprehensively researches the market, creates effective financial models and supports entrepreneurs in achieving their next business goals. Professional consulting is not limited to short-term help, but supports the company in the long term. The support of a consulting agency is an opportunity to effectively introduce the product to the market, build a competitive advantage and enjoy further sales successes.