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A companys product strategy is a plan for how it will create and introduce new products to the market. It encompasses decisions about what types of products to develop, what features to include, what price to charge, and how to promote them. A well-executed product strategy can help a company achieve its goals by increasing sales, market share, and profits. Conversely, a poorly executed product strategy can lead to missed opportunities, stagnant sales, and lost market share. There are many factors that go into creating a successful product strategy. According to Marshall and Johnston (2023), some of the key considerations include understanding the target market, defining the offering, designing a compelling offer, setting the right price point, and building a strong marketing campaign. A successful product strategy increases the companys market share by effectively differentiating its products from the competition. It can also aid in boosting sales by increasing consumer demand for the products. In order to be successful, a good product strategy must be well-executed and continuously updated as changes occur in both the marketplace and within the company.
Furthermore, the product life cycle is important because it determines a products potential for success and how a company should market and sell its products. Marshall and Johnston (2023) outline that the product life cycle has four stages: introduction, growth, maturity, and decline. During the introduction stage, a company introduces a new product to the market. The growth stage is when the product gains popularity and sales increase. In the maturity stage, sales peak, and competition increases (Marshall & Johnston, 2023). In the decline stage, sales drop as competitors gains market share, and the company should use different marketing strategies during each stage of the life cycle.
For example, Marketing during the introduction stage aims to create product awareness and generate interest in the product. Marshall and Johnston (2023) explain that this stage typically involves a lot of advertising and marketing campaigns that target potential customers. The growth stage is when the company begins to experience rapid growth as more people become aware of the product. Marketing efforts during this stage should focus on attracting new customers while also retaining existing ones (Markard, 2020). In the maturity stage, the company has reached a point where it is now competing against other established brands. Marketing efforts during this phase focus on differentiating the product from its competitors and convincing consumers that it is worth buying. Lastly, during the decline stage of a products life cycle, companies often use price promotions and new product launches to try to increase sales.
Product Strategy Examples
In the automotive industry, product strategy is used to make decisions about what products to develop and bring to market. A company will typically have a portfolio of products, each of which serves a different need or target market. Product strategy ensures that the right products are being developed and that they are aligned with the companys overall business objectives. One real-life example of product strategy in action is Fords decision to develop the Ford Fiesta subcompact car (Sharmelly & Ray, 2021). The Fiesta was designed specifically for European markets, where there is a high demand for small, fuel-efficient cars. By targeting this niche market, Ford was able to find success with the Fiesta, where other larger cars had failed.
Similarly, product strategy is applied in the fashion industry through the creation of seasonal collections. Designers start by thinking about the types of products they want to create (dresses, skirts, blouses, trousers) and then design a range of products that fit within those categories. Similarly, they will think about what colors and fabrics they want to use and what styles will be popular for the season (Claxton & Kent, 2020). Once they have a ready collection, they will work with their sales team to come up with a marketing plan that will assist in promoting their new products.
Question
How can a company create a successful product strategy that balances its need to appeal to a mass market with the demands of more niche markets?
References
Claxton, S., & Kent, A. (2020). The management of sustainable fashion design strategies: An analysis of the designers role. Journal of Cleaner Production, 268, 122112. Web.
Markard, J. (2020). The life cycle of technological innovation systems. Technological Forecasting and Social Change, 153, 119407. Web.
Marshall, G. W., & Johnston, M. W. (2023). Marketing management (4th ed.). McGraw-Hill Education. ISBN: 13-9781266356520
Sharmelly, R., & Ray, P. K. (2021). Managing resource-constrained innovation in emerging markets: Perspectives from a business model. Technology in Society, 65, 101538. Web.
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