For a company, marketing strategies are essential to face the challenges of the competitive environment. One of the strategies that best reinforces brands is the product strategy, since it also addresses price, position and promotion. The goal is to put products or services in the right place, within reach of the right consumers.
If your company is thinking about launching a new product on the market or reinventing it, I am sure that this information will be of great help.
I have prepared this article to share with you the tactics to create an effective product strategy.
Index of contents
What are product strategies
How to come up with a product strategy
How to make a product strategy, step by step
Types of product strategies
Kotler’s 7 Strategies: A Key Guide to Creating Product Strategies
12 successful examples of product strategies
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What are product strategies
Product strategies are the actions that companies take to design a product or service taking into account the needs of the potential customer. The objective is to give correct and determined visibility to what the brand offers. They are useful when launching a new campaign, reinforcing an existing offer or adapting a product for a specific season.
These strategies involve key decisions on aspects such as product innovation, differentiation from the competition, design, quality, packaging, price, distribution and promotion. It is about identifying opportunities in the market, understanding consumer demands, anticipating trends and adapting to changes in the competitive environment.
How to come up with a product strategy
Marketing
3 questions you should ask yourself before starting your product strategy
- Who do I want to reach?
- What products or services am I going to reach them with?
- How will I reach them?
As a company, you need to have one or more product strategies before launching them on the market. Having a well-defined path facilitates strategic decision-making and avoids losses of both time and money due to a poor approach to the product presentation campaign .
To successfully carry out a product strategy, the most important aspect is to analyze consumers. We currently live in a very changing market, and your company must constantly update itself so as not to be left behind. People are no longer just looking for the best product or service: they want companies to listen and understand them.
So that you can expand your knowledge of the subject, I want to share with you the main types of product strategies that exist. The advantage of this marketing strategy is that there are many options that depend on the market and the specific objectives of each company.
How to make a product strategy, step by step
Conduct market and audience research
Develop a value proposition with a unique and different promise
Define the objectives of your product
Define a budget
Do market segmentation and positioning
Define the product life cycle
Continuously innovate
Develop a pricing and distribution strategy
Manage your brand and reputation
The way to implement a product strategy is different for each case, but there are some key points that define a good formulation. Let’s look at some of them.
- Conduct market and audience research
This aspect serves to describe who will use your product and what that opportunity means for the business. Additionally, it is ideal for identifying your target customers, how you will position your product, and how it will fare against other competitors in the same industry .
Your market vision should also include a marketing plan that explains your customers’ needs and how you will deliver a competitive offering.
This stage involves conducting extensive research to understand the competitive landscape and customer needs. This may include demographic data analysis, market research, customer surveys, and trend analysis. Deep understanding of the market and audience allows companies to identify opportunities and challenges, as well as adapt their different types of products to meet the specific needs of their target audience.
- Develop a value proposition with a unique and different promise
The differentiated value proposition is the unique promise that makes a product stand out in the market. This may include unique product features, specific customer benefits, or a combination of both. A strong value proposition clearly communicates why a customer should choose a particular product over the alternatives available on the market. - Define the objectives of your product
You can’t create a product strategy without key goals. These are specific goals or metrics that you will achieve as a result of building your product. They guide your development team and help you measure success once the product is released.
When setting goals, it is important that they are time-based, so it is urgent to know when you will achieve them. This adds more importance to your product development as you have set a time limit for your success.
- Define budget
Allocating a budget for your product strategy will show you the path you should follow to effectively meet the objectives you have set for yourself.
Your product strategy will also be determined by your payment capabilities. We all want to have a great product launch and an impactful marketing strategy. However, your strategy should always adjust to your budget possibilities.
- Do market segmentation and positioning
Segmentation involves dividing the market into smaller groups of consumers with similar characteristics and needs. Positioning involves designing the product image and message in a way that resonates with a specific market segment. By understanding the different needs and preferences of customer segments, companies can adapt their marketing and communication to effectively reach each target group. - Define the product life cycle
The product life cycle comprises several stages, including introduction, growth, maturity, and decline. At each stage, companies must adjust their strategy to maximize product performance. For example, during the introduction stage, they can focus on generating awareness and establishing a customer base, while during the maturity stage, they can focus on differentiation and customer loyalty. - Continuously innovate
Continuous innovation involves constantly developing new products, features or improvements to stay relevant in a competitive market. This may include investing in research and development, collaborating with customers to obtain feedback, and monitoring market trends to identify new opportunities. - Develop a pricing and distribution strategy
Pricing and distribution strategies determine how the product is marketed and sold. This may include decisions about pricing, discounts, distribution channels, and promotion strategies. Companies must consider factors such as customer perception of value, production and distribution costs , as well as competitor strategies when developing their pricing and distribution strategies. - Manage your brand and reputation
Brand and reputation management involves cultivating a positive and consistent image for the product in the market. This may include activities such as creating a strong brand identity, managing customer perception through advertising and public relations, and effectively handling quality or customer service issues to protect brand reputation. . Strong brand and reputation management can help build customer loyalty and long-term value for the company.
So let’s remember:
Marketing
9 steps to make a product strategy
- Conduct market and audience research.
- Develop a value proposition with a unique and different promise.
- Define the objectives that your product will have.
- Define a budget.
- Do market segmentation and positioning.
- Define the product life cycle.
- Continuously innovate.
- Develop a pricing and distribution strategy.
- Manage your brand and your reputation.
Types of product strategies
Pricing strategies for new products.
Development strategies for new product lines.
Strategies based on seasonality.
Product line reduction strategy.
Brand positioning strategy.
Product differentiation strategy.
- Pricing strategies for new products
This strategy can define the success or failure of a product, so it is important to carry out a deep market analysis to ensure the sustained presence of your product.
To make a good decision about the price of your product you have to consider what type of consumers it will be aimed at. To do this, you can start by asking key questions to identify your buyer personas . These are some questions that you can take as an example. Remember that each question will depend on the nature of your company and what you want to achieve.
Does my product target the market I want to reach?
Do my consumers look for luxury and exclusivity?
Are my potential clients more interested in price than quality?
Is my product a basic consumer product for people?
The goal of these questions is to avoid giving the wrong message to your potential customers. For example, if you opt for a lower price to get their attention and what interests your consumer is quality, you will make them doubt their purchase.
Types of product strategies based on price:
Premium . The prices of products that seek to position themselves as unique and exclusive are higher than those of competitors. The objective of this strategy is to transmit the value that the product or service brings to users.
Of penetration . The price of the product is offered lower to attract the attention of the market. Although it can be risky, this strategy seeks to obtain recurring customers to generate future profits.
Saving. It is focused on generic products and on consumers who pay close attention to price. To be successful, companies must minimize prices so that sales are boosted.
Overpriced. The intention of the strategy is to take advantage of the lack of competition to maximize profits. It is important to be aware that when competitors appear, this price will have to drop.
In package. If you are going to launch a new product, you have the option of doing so in conjunction with others that will be replaced or do not sell enough. This strategy is very effective, since consumers perceive that they are receiving a gift.
Emotional . Here consumer psychology is used. An example that you surely know is when a product is offered at 199.99 instead of a fixed amount, such as 200.
Remember that the price of your products or services must be fair for both you and consumers.
- Development strategies for new product lines
The main objective of this strategy is to reach more consumers in more specific markets, either by increasing the variety of products , making individual changes or offering tailored products. Next, I will explain the development of each point.
Variety of products
If you specialize in the sale of a single product, for example software, your strategy can be aimed at launching software for different sectors. This way, consumers will know that your brand offers them different options to satisfy a need.
Individual product changes
The strategy refers to a packaging redesign. If your product has been on the market for a long time, it is sure that people will recognize it, but in this changing world it is always necessary to reinvent yourself to attract the attention of new people . It also applies if you launched a new product and its appearance was not as successful as expected.
Making a good change to the image of your product will make your brand look rejuvenated and more energetic.
Custom products
As I have already mentioned, consumers currently want brands to understand and satisfy them. Many people are willing to pay a higher price to have a product that goes beyond their basic needs.
To do it correctly you must understand the needs of potential clients and their lifestyle. This will make your product vary depending on the environment of each consumer , for example: if it is a business service, it can be adjusted only to the areas that need to be addressed; If it is a product, it may have different characteristics in its design, colors, materials, price, among other aspects.
This strategy gives you stability in the market, since it does not put your reputation or recognition at risk.
- Strategies based on seasonality
This strategy is one of the most used by companies. Seasonality can include all types of products or services, as long as it is done correctly.
Seasonality will always go hand in hand with the increase in demand for a product. It can be applied monthly, annually or for as long as a company believes it is appropriate; It changes depending on the season of the year, for example:
Christmas: demand for gifts of all kinds increases; from clothing and toys to appliances, among many more. Likewise, transportation lines such as airlines can take advantage of the season to offer their services.
Valentine’s or friendship days: sales of products such as stuffed animals or sweets increase. In the service area, restaurants, hotels or flower delivery also have one of their best streaks.
Summer holidays: hotels, restaurants and transportation services apply strategies to attract tourists.
Effectively take advantage of seasonality to boost your products or services. With time and good planning, this strategy will help you position yourself. If you need tools to effectively manage your marketing strategies, consider exploring HubSpot’s Marketing Hub .
With its various functions, you will be able to plan, execute and analyze your campaigns comprehensively, allowing you to make the most of each seasonal opportunity and achieve your business objectives more effectively.
- Product line reduction strategy
Product line reduction strategy involves eliminating less profitable or less strategic products from a product line to focus resources on the most successful or relevant products. This strategy can help simplify product offerings, reduce costs, and improve profitability.
Key Features: Focus on high-performance products, elimination of product portfolio complexity, increased operational efficiency.
Example: Apple is a company known for removing older models of its products, such as older versions of iPhones, to keep its product line focused on its latest innovations.
- Brand positioning strategy
Brand positioning strategy involves creating a unique and desired perception of the product in the minds of consumers. This strategy seeks to differentiate the product from the competition and communicate its distinctive value proposition.
Main characteristics: Identification of a specific market niche, clear and coherent communication of the value proposition, construction of an emotional connection with consumers.
Example: Tesla, the automobile brand created by Elon Musk, has positioned itself as a leader in the electric vehicle industry, focusing on technological innovation, performance and commitment to sustainability.
- Product differentiation strategy
This type of product strategy involves creating products that stand out from the competition through unique features, innovative design, superior quality, or exceptional services.
Key Features: Focus on innovation and quality, effective communication of distinctive product features, building sustainable competitive advantage.
Example: The Starbucks coffee brand has differentiated itself in the market by offering a premium coffee shop experience, superior coffee quality, and beverage customization to meet individual customer preferences.
Kotler’s 7 Strategies: A Key Guide to Creating Product Strategies
Kotler Competitive Strategies are a set of tactics and approaches developed by renowned author and marketing expert, Philip Kotler , to help companies achieve and maintain a competitive advantage in the marketplace.
These strategies are based on competitive analysis and understanding how a company can differentiate and stand out in a saturated market. These strategies serve as valuable tools for any company seeking to improve its market position and gain greater market share.
The 7 strategies that Kotler considers important for implementation in companies can be applied to product strategies, as follows:
Maximum product quality : It consists of offering the best possible quality to differentiate yourself from the competition and gain customer loyalty.
Market niches : Focuses on identifying and serving specific market segments that are potentially profitable and that may have been ignored by competitors.
Low cost : Seeks to be the supplier with the lowest cost in the industry without sacrificing quality, allowing it to compete on price.
Unique experience : Offer a unique purchasing or product use experience that justifies a premium price.
Reinventing the business model : It involves changing the traditional approach to business to find new ways to create value for the customer.
Innovation : Focuses on the constant introduction of new and improved products to stay at the forefront of the market.
Best Design : Highlights the importance of design in product development to appeal to consumers who value aesthetics and functionality.
These strategies help companies develop a strong and differentiated value proposition for their products, which can result in a sustainable competitive advantage.
12 successful examples of product strategies
Now that you know the types of product strategies, I want to share with you some examples of brands that applied them and were a success.
- Netflix
Product Strategy Examples: Netflix
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The most famous streaming company in the world is a clear example of implementing a pricing strategy. Apparently no one but Netflix knows that a well-designed price increase creates extraordinary value.
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For today’s consumers, streaming services have become so indispensable in their lives that paying a little more than usual no longer represents a problem for them, as long as the quality and supply of series and movies do not decrease.
Since the last price increase of the year in the United States, Netflix rose 7% on the stock market . Something that has reinforced the brand has been the improvement of its proposal and even the original productions. This aspect has guaranteed the company loyal and happy users.
- Coca-Cola
Examples of product strategies: Coca-Cola
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When it comes to strategic product campaigns, Coca-Cola is the greatest expert. One of its latest launches, following the product variety strategy, is its new Coca-Cola Signature Mixers line, with which it seeks to enter the world of cocktails.
The brand always responds to the latest consumer trends and alcoholic beverages have not been left behind. After the 7% increase in consumption in Europe of spirits such as whiskey, rum, tequila and bourbon, they decided to opt for the mixology industry.
- Buchanan’s
Product Strategy Examples: Buchanan’s
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Every year, in Mexico, the well-known Scotch whiskey brand Buchanan’s carries out a seasonal product strategy to celebrate Father’s Day. 2019 was no exception and launched its campaign «He didn’t know how to be a dad and he did it for you», which recognizes the courage and strength of fathers.
The campaign was accompanied by various events and strategies on social networks, in which well-known faces from the Mexican artistic milieu also participated, such as actors and comedians.
The result was an excellent campaign related to seasonality.
- Telfar
Telfar Product Strategies
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When defining the market vision, Telfar focused its efforts on making a bag “Not for you, for everyone.” He wanted to create a bag with an elegant and innovative design for everyday people. Unlike other luxury brands that highlight their product with celebrity endorsements, they identified that their target market is a wide range of people looking for an affordable luxury accessory.
Once they discovered the vision and their target market, they established a strategy to get their product to their core audience, with the goal of selling bags that fit everyone and making sure everyone received them. When the Telfar brand grew, it was no longer possible for customers to get the products due to the high demand with each new product launch.
So Telfar came up with an innovative product strategy to overcome this drawback with their bag security program: every time they launched new bags, customers could order the exact model and color to be shipped within a specific period. .
This is a different form of product strategy of developing new custom product lines , since the main brands manufactured limited products until they were sold out. In this way, Telfar meets its objective and provides a unique service to give its customers the desired product without fear of shortages.
5.Nike
Nike Product Strategies
Nike Image
Nike created a product and marketing campaign that surprisingly resonated with its customer base; This is the product strategy of the Nike Air Zoom Mercurial.
When doing market research, Nike focused on 3D-printed Flyprint textiles and automotive safety features. They wanted to create a shoe that was innovative, but still felt familiar to the wearer. So, the research team tested the efficiency of the Air Zoom Mercurial on real soccer players.
This led them to adopt airbag technology for its unique underfoot feel and energy return, creating a shoe like no other. While it went against Nike’s conventional vision, it was exactly the type of innovation the product team needed to develop a unique sneaker.
In this way, Nike customers could benefit from airbag technology due to the amount of dynamic movement that takes place in soccer games. By using pressure sensors on the athletes’ feet, the research team captured exactly how the foot bounces on different sections of the shoe and how to position the Zoom Air bag’s internal chassis on the sole.
Nike’s marketing team decided that while the shoe would make athletes perform better, it was too risky to change shoes to which customers were already loyal.
Instead, they chose to educate them with a product strategy on how the newly discovered technology could help them practice and positioned the product as a training tool. That way, Nike took the pressure off the sales pitch and was able to better communicate the shoe’s differentiator.
- McDonald’s
McDonald’s Product Strategies
Image from 123Viajando
The McDonald’s fast food chain has almost 37,000 establishments around the world and is the second largest fast food restaurant chain in the world . Much of its success has to do with its product strategy that focuses on satisfying the needs of its customers, as it has created several products tailored to its consumers in the countries where it is present.
For example, McDonald’s Mexico offers local dishes such as burritos, cuernitos with ham and traditional breakfasts such as McMolletes, which is bread with beans, cheese and tomato sauce; McDonald’s Spain offers a popular and refreshing cold tomato and vegetable soup known as gazpacho. With this strategy McDonald’s has managed to position itself in the taste of its consumers by giving a local touch to its international products , without leaving aside its own style.
- Soriana
Soriana Product Strategies
Image from El Economista
There are several important times for the mass marketing of products and summer is one of those that favors the rotation of certain categories, as occurs in the Soriana supermarket chain, when there is an increase in investment for advertising content .
The Julio Regalado campaign is part of the product strategy that this chain implements every year during the summer, thanks to which it obtains sales growth in different product categories. He achieves this through a savings strategy for consumers, in which he also makes use of emotional psychology through unique offers for different products.
- iPod
Apple Product Strategies: iPod
Image from Xataka
Steve Jobs combined design and product strategy when he launched his iPod in 2003, a music player that shared the product design characteristics of computers, which turned out to be very attractive and innovative for consumers. He first filled a need for high-quality portable digital music playback, helping Apple become one of the most valuable companies in the world.
Apple’s main goal was to sell a great product and provide a great experience. It discovered a way to do this with the iPod, which was positioned as an easy-to-use premium product with design features that consumers loved and unprecedented marketing exposure. Apple’s iPod has been a revolution in itself and dominated the market in its category .
9.Pepsi
Pepsi Guatemala Video
Pepsi is one of the brands that has best known how to take advantage of seasonal events to sell its products. And they have done it really successfully. Because the brand knows its consumer population in detail, it knows that they will be willing to try the new lines and become fans of the products.
In 2002 Pepsi had an idea that seemed promising: launch a Christmas version of its star drink, but with a twist. Blue Pepsi was promoted during the holiday season; The drink was blue and packaged in a transparent bottle. However, even though it became really popular, people only consumed it once and then went back to the original.
This seemed to be a failure of a product launch. However, Pepsi took advantage of this phenomenon to launch the product every year during the holidays and make this a seasonal event in itself.
- Kaweco
Product Strategy Example: Kaweco
Instagram image
Is there anything more elegant than a fountain pen? Maybe just a suit made with silver threads. German brand Kaweco took this very seriously; so much so that the company launched a line of its best pens in materials such as steel, copper and even sterling silver.
These products, which have a much higher price than their basic line, stand out for their luxury and detail. Now, more than one wants to invest in purchasing the premium version of a product that, by itself, is already elegant.
11.Adidas
Adidas Product Strategy Example
Endclothing image on Instagram
Another form of seasonal product launch has nothing to do with the event being repeated annually. On the contrary, a good product strategy could be made using as a catalyst some phenomenon, character or event that is changing history and setting the fashion of the moment.
This is something that Adidas knows how to do and that over the years has left it with good profits. The sports brand usually makes agreements with sports leagues, athletes and even singers to launch new and risky lines.
In 2022 this strategy took the form of an entire line in collaboration with the singer Bad Bunny. Taking advantage of the rise of his career and popularity, the brand’s tennis shoes were sold out in a short time and the need to maintain the line permanently among its offers has been created.
- Apple TV+
Apple Product Strategy Example
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Apple again? Yes. But this time it does not appear because of the historic launch of the iPod, but because of a much more recent sales strategy that focused its attention on the offer of services. A few years ago, Apple launched a series of subscription plans that enhance the user experience of its popular devices: Apple TV, Apple Fitness, Apple Arcade and Apple Music, among others.
For the launch of Apple Fitness, its wellness and sports application, the apple brand chose to create two plans: the basic and the plus. But his strategy did not stop there. On the contrary, Apple took advantage of the launch of its new smart watch, the Apple Watch 6, to include a free plus subscription to all those who purchased the new device.
In this way, Apple managed to sell two products together: the smart watch and the subscription to its health service.
You now have everything to start designing your product strategies: knowledge and inspiration will take your business further.
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Frequently asked questions about product strategies
How different types of product strategies can be developed and implemented
Product strategies can be developed and implemented through a careful process that includes market research to identify opportunities, competitive analysis, clear definition of product objectives, and market segmentation. Once a specific strategy is selected, concrete actions must be established to carry it out, including product development, pricing, distribution, and promotion.
What is the difference between a product strategy and a marketing strategy, and how do they complement each other for business success?
Product strategy focuses on the design and development of a specific product, including aspects such as features, quality, packaging, and positioning. On the other hand, the marketing strategy is broader and includes all activities related to the marketing of the product, such as advertising, promotion, distribution and pricing.
Both strategies are closely related, since an effective product strategy must be integrated with the marketing strategy to achieve commercial success. For example, a well-designed product needs a solid marketing strategy to reach its target audience and generate sales.
How can companies evaluate the effectiveness of their product strategies once implemented in the market?
Companies can evaluate the effectiveness of their product strategies using a variety of metrics and analysis tools. These may include tracking sales and market share, conducting customer surveys to obtain feedback, analyzing customer satisfaction, observing competitor response, and monitoring market trends. .
By collecting and analyzing this data, companies can determine if their product strategies are meeting their goals and make adjustments as necessary.
What are the common challenges companies face when designing and executing product strategies
Some common challenges include accurately identifying customer needs and wants, competing in a saturated market, appropriately allocating resources for product development and marketing, managing changes in consumer preferences, and adapting to technological evolution.
Additionally, the time and costs associated with new product development can present significant challenges for many companies. It is important to proactively address these challenges and seek creative solutions to ensure the success of product strategies.
