How to Develop a Product Strategy

Corporations and upstart businesses of all types and sizes introduce new products all the time. However, initiating a product concept, researching the product and rolling it out can be a lengthy process. Following are steps you can take to develop your own product strategy.

Things You'll Need

  • Secondary research information
  • Focus group moderator
  • Primary research data
  • Product roll-out business plan

Instructions

  1. How To Develop A Product Strategy

    • 1

      Garner all available secondary resources about your product's industry, the number of competitors, their market share and the total market potential in both unit and dollar sales. Visit the library and search for industry publications from Nielsen, Gallup, Forrester, and The NPD Group or Gale Research, depending on which supplier covers your industry. Check the periodical files for articles in "Business Week," "Sales and Marketing Management" or "Advertising Age." Go online and order reports from these vendors if you need more current information. (See resources 1 and 2)

    • 2

      Study the secondary research information. Think about whether or not there is potential demand for a new product among the existing competitors. Determine how you want to potentially enter the market with your new product--as a price or quality leader or as a discount brand. (See references 1 and 2)

    • 3

      Develop several versions of your product concept in terms of price and variety like flavors and sizes. Go online and find a professional moderator, who is trained to interview consumers in focus group settings. Schedule some focus groups with the moderator to get feedback from consumers or business customers about their interest in your product. Have the moderator ask them how likely they would be to buy your product. Use the focus group results to make decisions like version(s) and price.

    • 4

      Outline a preliminary business plan, including packaging, price, advertising and preferred distribution channels. Roll the product out in several homogeneous test markets that are similar in size and demographics. Keep the test market going for eight to 12 weeks, running frequent television commercials, local newspaper ads and in-store promotions. Conduct a primary marketing research study in each market to gather customer feedback, according to onlinebusinessadvisor.com.

    • 5

      Study the sales and profit of your initial product roll-out as well as the research results. Finalize your business plan. Roll your product out on a more regional or national basis. Continue to monitor sales and profits.

    • 6

      Conduct an ongoing ATU (awareness, trial usage) study to monitor your customer's satisfaction with your product. Use the ATU research to obtain information on brand and advertising awareness, the percentage of people who tried your product and those who plan on purchasing and using it again. Make any necessary changes in the product itself, price, advertising mix or distribution channels. Add new variations of your product if you see a demand.

Tips & Warnings

  • You should decide how and where to manufacture your product early in your planning. During the testing stages, you may be able to manufacture your products or find a local supplier. However, when you roll out on a larger scale, you will need to take advantage of economies of scale. Finally, maintaining a product strategy is a constant endeavor. Technology changes and products eventually enter the decline stage of their product life cycle. If you want your products to succeed in the marketplace, you will need to continually monitor all aspects.
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References

Resources

  • Photo Credit The business woman image by YURY MARYUNIN from Fotolia.com

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