Every business understands the undeniable significance of Product Strategy. Without a robust strategy, products fail to garner traction, leading to stagnating sales and zero growth.
Across the business landscape, countless studies, discussions, and frameworks zoom in on Product Strategy, exploring its many facets – from understanding market dynamics to delving deep into product features and beyond. In this piece, we bring together insights from celebrated strategists and corporations to provide a comprehensive guide on Product Strategy.
We’ve distilled the intricate process of Product Strategy Development into five critical stages.
- Identify the Ideal Market Segment
- Design the Perfect Product
- Grasp Customer Insights
- Enhance the Customer Journey
- Elevate the Digital Experience
For every stage, we shed light on fundamental principles and guide you to essential resources for deeper insights.
1. IDENTIFY THE IDEAL MARKET SEGMENT
When you zoom out, you see the vast canvas of market dynamics. The Product Lifecycle perfectly illustrates this panorama. It emphasizes that every product transitions through four developmental stages, from inception to its sunset.
This lifecycle is typically juxtaposed against the Consumer Adoption Curve, a celebrated marketing tool. Aligning the two helps determine the most suitable market segment to target during each stage of a product’s life.
To leverage this tool, two questions need answering:
- Which stage is our product currently at in its lifecycle?
- Which segment of the Consumer Adoption Curve should we focus on?
Each phase of the Product Lifecycle presents its unique attributes. Tailored strategies are required for each:
- Introduction: Here, it’s all about pricing. The pivotal question revolves around market penetration versus skimming. Penetration might lead to broader consumer reach, but possibly at the expense of margins.
- Growth: The spotlight now moves to ensuring customer satisfaction, cultivating loyalty, and promoting repeat business. At this juncture, targeting the Early Majority market segment becomes vital.
- Maturity: Based on industry competition, companies might choose to: Stand their Ground, Guard their Territory, or Seek Innovation.
- Decline: It’s decision time – to innovate or plan a strategic exit.
With clarity on the product’s lifecycle phase, it becomes easier to pinpoint the dominant customer segment, as outlined by the Consumer Adoption Curve. Here’s a snapshot of the five customer types, each with its unique traits:
- Innovators: Risk-takers and trendsetters. They are financially secure, socially active, and are often the first to try new products.
- Early Adopters: Opinion leaders with a higher social standing. They’re typically younger and more financially agile, making them quicker to embrace innovations than the masses.
- Early Majority: While they don’t jump in as fast as innovators or early adopters, they still hold a higher-than-average social standing and interact with the early adopters.
- Late Majority: Skeptics by nature, they wait for a significant chunk of society to vouch for a product before giving it a try.
- Laggards: Resistant to change, they’re the last on board. Often older and more traditional, they’re not swayed easily by new trends.
In essence, crafting a sound product strategy is not just about the product itself but also understanding where it stands in its lifecycle and who its potential users are at each stage.
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