The Definition of Product Strategy
Product is the catalyst for the start of a business and the development of product strategy one of the most important decisions a marketer will make since product plays a crucial role in demand, competitiveness and success. Managers must understand the ramifications of the product strategy on other areas of marketing like price, distribution and promotion.
Other People Are Reading
-
A Product Is Born
-
Without the product, there is no business, whether that product is a tangible widget or an intangible service--it is the spark that generates entrepreneurship.
Product Research and Development
-
Many products are the result of years of research and development. When the pharmaceutical industry came under criticism for the high prices of some of its drugs, it cited the need to recoup the expense from years of drug development, trials and testing--something required in order to clear a drug through U.S. Food and Drug Administration guidelines.
Even small entrepreneurs must develop their germ of an idea into a product that can be mass produced and sold. It too must be tested and retested to determine its features and benefits and to gauge consumer reception.
-
Unique Selling Proposition
-
Every marketer must determine the unique selling proposition for a product, whether real or manufactured by a public relations team. It is this unique proposition that will be used to carve out a product niche that will endure over the life of the product.
Lexis and Acura were both introduced at about the same time as high-priced, luxury model cars into a category dominated by Mercedes Benz and BMW. While both cars were relatively successful, Lexis was able to establish itself through advertising with its "Relentless Pursuit of Excellence" selling proposition to be just a cut above Acura even though they were in the same price range.
Influence of Competition
-
Mercedes and BMW didn't just sit on their hands while Lexis and Acura--new entrants--grabbed the luxury auto customer. They started aggressively going after new consumer segments and referencing their cars' heritage of quality especially when they introduced new designs.
When developing product strategy, a manager must do a thorough evaluation of competitor products on dimensions of price, promotion and distribution to determine who's winning in the category and what might be the key to that product's success. This information gets factored into product strategy.
Consumer Demand
-
Consumer need and desires can influence product development. Needs and desires mean sales demand. Many products are developed to meet some need, such as a vaccine for the swine flu or a hair spray for sensitive scalps. Products created to meet a need have a better chance for quicker success than a product whose usefulness and utility must be sold as much as the product itself.
Product demand is elastic in that products will continue to be introduced into a category until the benefit ceases to be realizable in sales growth.
-
