Customers are motivated to invest in products or services that fulfill their needs. Customers decide to move forward with the purchase of a product or service they believe effectively relates to what they need and are solutions to the problems they are facing. There are several sources available in today’s competitive market for customers to explore and consider when they are in the purchase decision making process. Therefore, it is crucial for businesses to understand customer needs in order to offer and provide customers with the right product or service they desire.
Products are constantly being introduced into the market by businesses who anticipate that customers would purchase their product. However, predicting where a new product will reach and how it will perform and resonate with the target audience when it is launched or introduced into the market is not a simple task. It is important for businesses to develop an effective product strategy that outlines the steps a brand will have to undergo to make their product launch a success as well as what the plan of action will be if the product fails to thrive or does not gain traction in the market. The product strategy is used to develop a feature or product. It includes the necessary tasks to achieve the business’ goals. It also details the problem the product will solve, it’s impact on customers and the business, and how the product benefits the business.
An effective product strategy serves as a point of reference for the business to measure their success before, during, and after production. It is comprised of several components that sets the right targeted direction for the product. The three major components of a product strategy include:
The market vision describes the business’ target customers and who will be utilizing the product, the position of the product, and how it compares to its competitors. It also clarifies the customers’ needs and how the business will provide a competitive offer.
The product goals describe specific metrics or objectives that will be achieved from building the product. It also serves as a guide to measure success after the product launch.
The product initiatives are trends or ideas that will be influenced as a result of the new product launch. Identifying the product’s impact helps establish a clearer vision for how the business and reveals new opportunities
It is critical for businesses to create and develop a strong, effective product strategy to guide a product’s development and ensure its success in a new product launch. The consideration of the market vision, product goals, and product initiatives aids in accomplishing this task. For instance, Nike, an American multinational leader in the retail industry, has been introducing innovative products into the market since launching its first shoe in 1971. Nike, however, took a risk when it introduced a new running shoe, “Nike Free,” in 2005. Many employees at Nike believed that Nike Free would not appeal to their target audience because the shoe design was different compared to what they were used to producing; it was bold and had a unique, distinct look. Nevertheless, Nike Free exceeded the company’s expectations.
Nike Free’s success was a result of Nike’s implementation of an effective product strategy which was comprised of a market vision, product goals, and product initiatives. For example, with respect to market vision, Nike focused on creating a running shoe that was not only innovative but appeared familiar to the target audience. Nike’s research team surveyed track coaches at Stanford University to determine their runners needs. In regard to product goals, Nike determined that the goals they desired to establish for Nike Free needed to stand out and make the athletes run faster. Nike’s research team used data from capturing how the foot reacted when men and women ran without a shoe to develop their goal which was to create a running shoe that mimicked similar motions observed in the runners that ran barefoot. Lastly, to establish product initiatives, the marketing team determined they needed to justify that athletes would purchase the Nike Free even though it looked completely different than Nike’s traditional running shoe. Nike’s stakeholders had concerns and reservations about the product design in Nike Free. Nike’s marketing team decided that even though Nike Free would improve the athletes’ performance, it would be very risky to depend on customers to accept a new running shoe from what they were already loyal to. Nike’s marketing team determined they would educate their customers about the benefits of the new running shoe.
Businesses that understand customers’ needs and develop an effective product strategy can successfully launch products into the market and achieve optimal results. Establishing a product strategy helps businesses increase profits, customer loyalty, and mitigate risks. Businesses can obtain a better understanding of their position in the marketplace while developing a product strategy which aids them in identifying areas of opportunities and gaps in the marketplace where they can take advantage in securing themselves for success in a specific area in their industry. Business can also gain insight about features and benefits customers are looking for in order to tailor their products to better satisfy their needs. Overall, product strategies are mutually beneficial to businesses as well as customers.