Introducing a new product to today's market is not an easy task. Entrepreneurs have to face enormous competition and related challenges. The chances of success depend not only on the innovation and attractiveness of the product, but also on the chosen strategy. What exactly is a product strategy? How to prepare it? And why is it worth using the help of a consulting agency in this regard?
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 it's art. The entrepreneur should have extensive knowledge of market mechanisms, marketing, sales and advertising. Before launching a product on the market, it is necessary to analyze and define the needs, behaviors and purchasing path of our potential client, research the market and its requirements, in order to prepare a detailed product strategy based on the collected data.
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 Strategic activities end when the product is withdrawn from the market.
The product strategy collects all information about the new product in one place. Starting from the characteristics and expectations of the target group, description of the competition and the market, through the name, logo, design and product features, to the description of the selected marketing and sales strategy.
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What does the product strategy consist of?
The product strategy is developed according to specific rules, which are dictated by the current market situation and the internal conditions of the company's operation - including the machine condition, raw material resources, human and financial resources. According to M. Pańczyk, the product strategy must be coordinated with other marketing mix strategies.
We can distinguish 3 key elements included in the product strategy. These are:
- 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,
- product goals - what the company wants to achieve by launching a new product on the market; goals should be timed,
- product initiatives - description of individual activities that are to lead to the achievement of specific business goals.
In addition, the product strategy should contain 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, Nike launched the Nike Free running shoes, which were very different from previous models. Many people did not support this decision. It was mainly related to the fear that the new product would not be to the liking of the brand's target group. However, Nike has proved that it is able to create new trends and thus achieve spectacular success on the market. A decent, well-thought-out product strategy had a great impact on the success of the entire project!
The product strategy is, in a way, a preparation for launching a product on the market and a vision of its development. Thanks to it, the entrepreneur has full control over his product, and this increases the chances of ultimate success.
Step by step product strategy
Preparation of a product strategy is a multi-stage process. To begin with, you should carefully analyze the target group, and in particular define the needs and behavior of potential consumers of our product. 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 the product strategy is 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 others concept 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.
Then focus on the product itself. The key is to properly define the product. It's about defining the essence of the brand, opportunities and threats (SWOT analysis), preparing a pricing strategy, selecting sources of product recommendation, defining USP/ESP, product positioning, and its main benefits.
The process of working on the product strategy must not fail to consider 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 can a consulting agency help you?
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.
A consulting agency carries out detailed strategic analyzes, comprehensively researches the market, creates effective financial models and supports entrepreneurs in achieving new business goals. Professional consulting does not come down to immediate 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.