What is product strategy in marketing? (How to create one)
By Indeed Editorial Team
Published 8 July 2022
The Indeed Editorial Team comprises a diverse and talented team of writers, researchers and subject matter experts equipped with Indeed's data and insights to deliver useful tips to help guide your career journey.
If you're ready to turn a new idea into a best-selling product or you want to change how people think about a current product, you need a product strategy. A product strategy details why you're selling the product, who you're selling it to and what your audience wants from the product. Being able to create a product strategy is vital in marketing and advertising. In this article, we answer the question 'What is product strategy in marketing?' and how you can create one yourself.
What is product strategy in marketing?
To answer the question 'What is product strategy in marketing?', it's an outline of a product's purpose and objectives that also details the plan for achieving those objectives. It serves to bring together the overall vision for a product with the means of implementing that practically. A product strategy in marketing typically maps out the branding, demographics, messaging and distribution of a product that you plan to sell.
The product strategy is also a central plan that people can quickly refer back to if they have questions. This is important for guiding multiple marketing channels in the same direction. It also ensures that all stakeholders are pushing the same messaging and can help refine the wider product range or business strategy.
Why are product strategies important in marketing?
Product strategies are vital in marketing or production roles because they can inform future decision-making, maintain a goal-oriented mindset, guide large teams and ensure each person working on the product is productive with their time. Being able to create a long-term product strategy is an excellent skill to have, regardless of the position you hold in a business. A strong product strategy can have the following effects:
Influence and inform the product life cycle
One of the most important considerations for a product strategy is what happens before, during and after the launch of the product. A detailed product strategy takes into account how to start generating interest, how to navigate development and how to maintain momentum post-launch. With a framework for meeting long-term goals, it can also help team members deal with challenges throughout the product life cycle, ensuring everyone stays on task.
Related: How to develop SMART goals
Create benchmarks for success
Having a product strategy in place gives you an idea of what you want the product to achieve during its lifetime. The strategy usually contains long-term goals, which can be a way of measuring overall success. If your product strategy does not result in the expected level of performance, there are specific areas to improve going forward. This approach also facilitates measuring your success more accurately, which can lead to better optimisations.
Builds targets and motivation
Any plan that includes short-term and long-term milestones is a way of building motivation. If a product strategy has long-term goals, a marketing team is much more likely to stay on track as they have a clear end objective. These long-term goals are typically made up of smaller milestones or 'quick wins' that help reinforce forward progress and help a team stay motivated as they can see what their work is contributing to.
A clearly defined product strategy that the entire team shares can help align individuals on the same goals and workflows. They are extremely collaborative tools that can evolve with new ideas and brainstorming sessions, which can foster a collaborative environment. When product strategies connect with a company's wider vision, they can also break down barriers between departments and help unite a wider business.
Efficient use of resources
Having a broad product strategy outline allows you to allocate the right resources to the right places. This can create a more productive environment and help you make the most of your time and money. A product strategy in marketing also typically includes a breakdown of the different assets and where they'll be best allocated based on your priorities, which can help when building out budgets.
Foster personal development
Product strategies help foster critical thinking skills when teams use them in a marketing or production capacity. A fully-developed product strategy usually contains a range of marketing techniques and is a tool regularly updated with best practices. This helps team members quickly see how resources, time and different approaches impact the wider strategy, which can shape and inform any actions taken in the future.
What elements go into a product strategy?
There are multiple elements that all contribute to the success of a product strategy. Understanding what elements to include in a product strategy can help a company or individual to build a strong strategy. These elements are:
Understanding your target market, their needs and why they use your product is vital for building a successful product strategy. This element highlights the attributes that make them the perfect customer such as age, buying habits, location or brand loyalty. Marketing teams typically use this data to create 'buyer personas' which are profiles that describe your different audiences as hypothetical individuals.
This approach makes it much easier to discuss your target markets and tailor your strategies to different segments. Your product strategy may also discuss competition in the market and external factors such as the economy. This helps you understand where your target demographics are located and how you can expand your client base.
Budgets and pricing
In most cases, the point of a product strategy is to help sell more effectively, which results in a profit that you can reinvest. This makes the outline of budget and pricing an important element within the product strategy. The pricing structure ultimately looks to cover operation costs, highlight an ideal profit margin and estimate the potential for price changes in the future. Some businesses have multiple variations of a product with different pricing based on features while others change their pricing based on their objectives.
This element of the product strategy explains why your product is unique within the market and how it can fill a gap. It highlights the value your product has with customers and the solutions it offers to common challenges. Within your product strategy, look to outline the wider benefits of your product and use that information to develop sales and marketing tactics.
The most effective product strategies include a long-term timeline complete with key milestones and initiatives at different stages. This timeline identifies, at a glance, when a new development or marketing initiative takes place. This keeps all of the individuals within the project on the right track and can help with forecasting operational costs and communicating progress to any senior stakeholders.
Setting goals for sales, performance and engagement can inform the wider product strategy. These goals may include user reviews, the revenue you want to generate, how many customers buy again, how promotions perform and other qualitative information. These goals then become future projections, which can make decision-making easier and lead to innovations.
How to create a product strategy
Building a product strategy requires a clear understanding of a company's vision and the finer details that shape your product. Strategies can vary depending on the unique requirements of a business. You can create a product strategy by following these steps:
1. Market research
Before you start building a strategy, it is important to understand your ideal customer. You can achieve this by performing market research, holding surveys with current customers or polling on customer-facing channels such as social media. Focus groups are a traditional way of understanding what your audience wants and how your product fills that niche.
2. Build out your vision
A defined vision helps your team understand the direction of the product strategy and sells your story to the customer. You can build a defined vision by identifying the key pillars or values that your product represents. Once you have these values in place, you can sell the story of your product to wider audiences and start attracting a loyal, impassioned client base.
3. Stay focused on solutions
Once you start defining your goals and milestones, always keep your user in mind. Each solution ideally circles back to your product's key challenges and solves them. The strength of a product strategy is that it can turn broader concepts into actual initiatives that can solve problems, so connecting them back to a single challenge or end goal can help larger teams stay aligned.
4. Always make adjustments
It's important that you keep your product strategy agile. Always find time to reflect on what is performing well and what isn't. This information allows you to make informed changes based on actual results, whether that is customer feedback, sales numbers or engagement rates. If you start achieving your goals, set stretch targets or look to innovate into new directions that lead to better performance.
5. Further collaboration
Developing a product strategy often requires input from a range of different departments and individuals. This can help everyone feel invested in the project and is useful for building out new initiatives. Collaboration brings different perspectives on challenges and solutions, which can deliver success before the challenge becomes an issue.
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