How to create a successful product strategy?

Posted by Adam Wilson on February 23rd, 2023

Product strategy in marketing is the plan created by a company to launch its product in the market with the vision of the company. The product strategy helps the companies to justify their product and how it stands apart from the competitors. The product strategy also aids in keeping the different departments and teams of a company in sync to attain higher business goals. 

The product strategy focuses on the key aspects of the product, such as features and functions. It helps to keep your business determined on the customer needs, market positioning, and business objectives. This way, you can launch a product that focuses on value and aligns with your company vision. 

Key Takeaways 

What is product strategy? 

Product strategy planning refers to the entire process, from conceptualizing the product to building a set development plan. You might have got a great idea, but it’s always difficult to bring it practically as you thought of it.

A product strategy helps you plan out the product execution and the principles that will lead it. It will help you to find answers about the product before you begin the development, such as:

Answers to these questions will help you to validate the creation and existence of your product. This strategy will also incorporate the types of features the product will have. It serves as a blueprint for product development and the business objectives that the company aims to achieve. 

However, many times the product strategy is confused with the product roadmap. A product roadmap is a timeline that defines how the different elements of the product will come together, and the final product will be made. For creating successful roadmaps, it’s vital that you have a clear vision, timelines, and goals set priorly in the product strategy. 

Product strategy is the main reference point as the product roadmap changes throughout development. Usually, the tasks and goals during product development change due to challenges and feedback from testing. A company with a robust product strategy can better handle changes and create a solution that aligns with your ultimate product vision. 

The importance of product strategy

Product strategy benefits companies by keeping product development aligned with both customer and business expectations. According to a report, “84% of product managers consider product strategy as their top responsibility.” There are many factors that come into play in developing a product strategy. Below we have given steps following which you can create a successful product strategy. 

Define your product’s niche 

A well-defined product strategy of a company specifies which niche the product will occupy once it enters the market. This helps the various teams within the company to make decisions during the development that are relevant to the product’s niche and to the target audience. 

For instance, your product’s niche is a triangle, where on one angle, you have your prospective customers and your company goals on the second angle. On the third point, you have features and functions of your product that make it different from others brands in the market. 

A product strategy explains each of these points and helps to maintain a balance between them. For example, you can’t sell a product that has many features but no customer demand. Similarly, you can’t sell a product at a higher price than your competitors just to achieve your business objectives. 

Briefs your product roadmap 

A product roadmap is a devised plan for developing, launching, and growing your product. It helps in task management and ensures that deadlines are met. Often the obstacles and challenges in the development process may cause differences in the roadmap, which is understood by the different teams involved. 

Nonetheless, product strategy informs the product roadmap directly by setting up a strong foundation. The product strategy sets the deadlines and phases of product development, while the product roadmap defines the specific methods for product execution. The roadmap that you start with is quite different than the one you end up with due to spontaneous and unexpected events. However, a roadmap that is based on a well-researched product strategy is likely to have fewer changes compared to one based on a no strategy. 

Provides directions and clarity 

Your product team people are not the only ones focused on the company’s goals. However, everyone within the company needs to work towards the success of the product. Marketers need to plan a marketing strategy for product and the sales team should know about the values of the product. IT and customer service teams should know how to answer the queries and doubts of the customers. The internal policies and plans should put emphasis on the points highlighted in the product strategy to maintain consistent messaging in communications. 

Also, sometimes doubts might arise within teams in regard to your product. The best way to resolve confusion within teams is by referring back to the product strategy. The teams can compare the potential decisions with the product strategy to determine the right decision in favor of the intent of the product. 

Components of product management strategy framework 

Start with stating your product strategy to every employee involved in developing, selling, and supporting the product development. Once you have defined your product strategy, you have to create a resource for teams to refer back to as and when needed in the development. This also helps in keeping the vision of your product and company at the center of every decision that your teams make. 

The product strategy framework is almost the same, even if you’re creating an eCommerce site or travel app. It must include more than a few platitudes and unfeasible goals for your product. 

What are the steps of product strategy? 

Below we have given the steps that the product strategy frameworks include:

By using the product strategy template, you can take the right steps in developing the product strategy. Now, we will discuss the key elements of an effective product strategy. 

Elements of an effective product strategy 

The final strategy of every business varies based on the company’s specific values and objectives. Nonetheless, the basis of every product strategy should have the following elements:

1. Identify your target audience

There are many products flooded in the market without any solid audience base. Most of the companies falsely believe that if they have a great idea, then their product will be well-received by the audiences. However, they don’t focus on the fact whether their product would resolve the pain points or problems of the prospective customers. 

Companies should research the market priorly to ensure that there’s demand and an actual audience for the product. You can analyze how your competitors are doing and determine the features they are missing. This way, you can create a product that stands apart from your competitors. 

2. Gather Customer data

To launch a product that performs well in the market requires in-depth data analysis. You can analyze your existing product data and see what customers are looking for in a product. You can conduct customer behavioral analysis with WebMaxy Analyzer to know what product features customers like and dislike. You can utilize these user insights to create the basis for your new product and take the right steps. 

Data-based product strategies can help you to achieve your goal precisely. WebMaxy Analyzer is a user behavior analytics tool that comes with a multitude of features like session replay, heatmaps, surveys, user insights, and more. It collects accurate customer data insights that you can use for planning an effective product strategy. 

3. Set Goals

You must set goals to establish a timeline for your product development and to set expectations for delivery from the different teams. You should begin with the long-term goals of your product, for instance, deciding the official date for the start of the development and product launch. Once you have decided on these important dates, you can divide the timeline into short phases to establish focused goals and expectations. 

Make sure you set goals that are measurable and achievable. For this, you need to gather accurate data that enables you to track your progress toward your set goals. A data analytics platform like WebMaxy Analyzer can help you see your visitors’ interactions and know where they are in the buying journey. You can use the following KPIs to measure the progress of your product strategy goals such as: 

Examples of product strategy models 

There are various product strategy models that have been developed over time to fit  company’s vision with its target market. Below we have given some examples of the product strategy models that you can utilize. 

Differentiation Strategy 

This product strategy example is good for unique products. In this, the customers’ attention is grasped by distinct features or functionalities they didn’t know they were missing. For example, the mobile industry companies have been competing since years to bring out the best product. From creating wireless chargers to bendable screens to stand apart from their competitors. 

In the differentiation strategy, the key is to develop a product different from what’s available in the market. There are various ways to do it, such as:

Quality Strategy 

This is the product strategy in which you try to differentiate your product in terms of quality, reliability, functionalities, and user experience. A quality product positions your brand in the premium category compared to other brands. For example, Apple fanatics continue to buy Apple devices because of their OS, high-end aesthetics & consistency, and digital ecosystem. 

Typically, products that are focused on quality can’t compromise the price. To build the best product, you need the brightest minds and good-quality resources. This requires high expenditure, and that’s projected on the final pricing of the product. A product that comprises with quality is positioned in a necessity or a low-quality product category. 

For example, a data security product can be expensive based on the claim that it provides the best digital security in the world. A company like Buggati Veyron doesn’t compromise the quality of their cars to appeal to audiences-this makes the product desirable even at a high price. 

Cost Strategy 

This strategy focuses on creating a good product at an affordable price. The products that are made using this strategy are cost-effective and aim to be at a lower pricing point than their competitors. You should opt for this strategy if your product is not offering something new in terms of features or other value-centric components. 

For example, a company is in the business of making plastic plates. Then, their priority would be to make maximum plates with fewer resources. This way, they can reduce the production cost and the final pricing of the product. Since customers are unlikely to look for aesthetics or brand as long as they work perfectly for them.  

Cost strategy is the best choice for you if you can make the development process cheaper. The lower the price of your product than your competitors, the more you can appeal to your customers on that basis. Try to keep the pricing of your product where it still gives you profit. However, sometimes the customers believe that if the product is cheaper, it can’t be of high quality. Therefore, make sure that you ensure your customers that you are selling the best, even at a low price. 

Focus Strategy 

This is an approach that has gained popularity over the last few years. It is a product strategy in which the focus is on creating a product that is meant for a highly specific market. In focus strategy, the companies dedicate their resources to developing features that are required by a defined segment. The goal is to create a product that performs well in a niche market rather than a broad market. 

Below, we have given different product niches on the basis of which you can create your product:

Focus strategy narrows down your competition and enables you to focus on satisfying the needs of a specific group. Here, we will give you an example. 10% of people in the world are left-handed. All the scissors that were made earlier were for right-handed users. A company launched special scissors that were for left-handed users in 1967. This was the first time in human history, resulting in this company having no competition in the whole market. 

Product strategy for product development

Product strategy provides support and stability to the product development process. Product strategies for new product development serve as a framework to provide guidelines and expected timelines to different teams throughout the process. Ensure your strategy is well-planned and researched because you don’t want to revise it during the product development process. Take time in the initial stages to set long-term visions for the product development lifecycle.

However, it doesn’t mean that you don’t have to modify or make changes to your product strategy ever. You need to make changes from time to time as and when required. Make sure you evaluate your product roadmap and product strategy to refine any strategy drifts that might have come over the course of time. 

Remember that this strategy is an iterative process. You can make changes to your recent product strategy when your latest product plan has completed its course. You can gain accurate insights that can help you to create more effective product strategies in the future.  

The Bottom Line 

The product strategy is a plan to create a product from its ideation to the actual execution and the vision of creating it. It serves as a blueprint for the product development process. However, for creating a product that performs well in the market, it’s vital that you understand your target audience.  

WebMaxy Analyzer is a user behavior analytics software that comes with various features like session recordings, heatmaps, surveys & polls, feedback,  funnel view, form analytics, segmentation & filtering, push notifications, and many advanced integrations.