Imagine you’re developing a new waffle iron — one capable of perfectly detecting when a waffle is golden brown, no matter the volume or thickness of the batter. We’re talking next-level waffle technology here. It could be a game-changer, but something goes horribly wrong.
The product is rushed through development without clear guidance or objectives. When it’s sent to the manufacturer, there’s no picture of the target audience, how it compares to other waffle irons, what it’s going to do for the business, or any of the crucial factors that give it an identity in the marketplace.
In that scenario, this revolutionary feat of waffle engineering would go to waste — all because it lacked a solid product strategy to guide its development.
A sound product strategy can be the difference between a product that carves out a permanent place in its market and one that’s quickly forgotten. It helps a product resonate with consumers and gives it the structure and direction to succeed.
What is a Product Strategy?
A product strategy is the foundation for a successful product lifecycle. If you plan to develop a product in the future, it’s essential to understand this concept. In this guide, we’ll explore what a product strategy is, the framework that structures it, the key elements it should address, and provide an example of how it works in practice.
Product Strategy Framework
A product strategy framework typically includes three core components: market vision, product goals, and product initiatives.
1. Market Vision
Market vision answers two critical questions:
- Who is this product for?
- What does that mean for your business?
This section includes information about your target customers, how you plan to position your product, and how it will perform relative to the competition. Your market vision must address customer needs, the buyer personas you aim to attract, and how you’ll deliver a competitive offer.
2. Product Goals
Goals provide direction for your product’s development. They help you chart your course, track progress, and measure success. Set SMART goals (specific, measurable, attainable, relevant, and time-based) with clear-cut objectives and deadlines.
Don’t wait until the end of the project to set goals. Break them into smaller milestones to ensure your team maintains momentum and meets all necessary objectives along the way.
3. Product Initiatives
Product initiatives are broader, more conceptual goals. They represent big-picture ideas, including the trends your product will influence and the kind of impact you want to have on your business, industry, or consumers’ lives.
Example of a Product Strategy: Apple’s Macintosh
In 1984, Apple released the Macintosh 12K8, the first iteration of what would become the world’s most popular personal computer brand. Although it didn’t initially meet all of its goals, its product strategy is worth examining.
Market Vision
During the late ’70s and early ’80s, tech marketing primarily catered to hobbyists and early adopters. Apple aimed to change that by making computing accessible to the average person. Its market vision focused on providing personal computing to the general public, with an emphasis on a simple, aesthetically appealing user experience.
Product Goals
Apple set specific, time-based goals for the Macintosh, including selling 50,000 units in its first 100 days — a target it easily hit. However, the product didn’t reach its long-term sales targets, but the fact remains that Apple set measurable goals to gauge the success of its strategy.
Product Initiatives
Apple released the Macintosh with the tagline: “The computer for the rest of us.” It was designed to be accessible, with a user-friendly graphical interface and approachable features, aiming to democratize personal computing for the general population. This initiative laid the foundation for Apple’s future dominance in the personal computing market.
Key Elements of a Product Strategy
An effective product strategy revolves around four key elements:
1. Hone in on a Customer Segment
You can’t create a product strategy without understanding your target audience. Identify the specific need your product will address, then determine who has that need. Take time to develop detailed buyer personas and be prepared to adapt based on customer feedback.
2. Understand the Competition
You need to know how your competitors stack up. What do they offer, and how can you stand out? Successful products have a differentiating factor — whether it’s better service, quality, or price. Identifying that factor is key to success.
3. Iron out the Business End
Ultimately, a product needs to make money. Your product strategy should outline how the product will generate revenue. What is your business model? Will you sell directly to consumers online, through retailers, or with a subscription service? These questions must be addressed.
4. Consider the Macro-Environment
External factors such as political, economic, social, and cultural forces can influence your business and customers. Your strategy should account for these factors and consider how shifts in technology, market trends, or customer needs could affect your product’s success.
Product Positioning
Product positioning involves determining how customers view your product and where it fits in their minds. A positioning statement helps align marketing efforts with your product’s brand and value.
A positioning statement typically goes like this:
For [target customer] who has [need], [Product/brand] is a [market category] that [key benefit]. Unlike [competitors], the product [unique differentiator].
For example, TikTok’s positioning statement could be:
For mobile users, predominantly aged 13 to 24, who are looking for engaging content, TikTok is a video-sharing service that continuously plays content tailored to user preferences. Unlike Instagram or YouTube, TikTok automatically plays new content nonstop.
Product development needs a guiding strategy. A product strategy sets development in motion and keeps it on track by establishing why a product exists. Without that, it’s difficult for product teams to know where to start or how to proceed.
By defining the purpose, goals, and direction for a product, a sound strategy ensures that your product stands out in the market and succeeds in the long run.
