Definition of Product Strategy
A product is a 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 product strategy and the ramifications of the product strategy in other areas of marketing like price, distribution, and promotion.
Without the product, there is no business whether that product is a tangible widget or an idea to provide an intangible service, it is the spark that generates entrepreneurs; it is the fuel that powers America’s mighty capitalistic economic engine.
Product Research and Development
Many products are the result of years of high science research and development. When the pharmaceutical industry came criticism for the high prices of some of its drugs, it cited the need to recoup the expenses from years of drug development, trials and testing required to clear a drug through Food and Drug Administration for approval. Even the small entrepreneur must develop the germ of an idea into a product that can be mass produced and sold.
Unique Selling Proposition
Every marketer must determine the unique selling proposition for a Product, whether real or manufactured by advertising spinmeisters. 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 these two new entries grabbed the luxury auto customer. They started aggressively going after new consumer segments like Blacks and Asians 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 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 the Swine Flu or a hairspray 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.
Many a product has come along as “Me-to” product, replicating another’s product’s success formula with the goal of building a better mousetrap and do. 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.