What Is Product Development Strategy?

Product development strategy refers to the methods and actions used to bring new products to a
market or modify existing products to create new business. Developing a product has several steps,
from producing an idea of distributing products to customers. Each stage requires a strategy to be
successful and generate revenue for a business.

Why is product development strategy important?

Product development strategy is important because it uses market research

to develop a plan for success in selling products. Your overall strategy should include the
methods and techniques you will use during each stage of product development. This can help
you overcome obstacles and focus on the most successful strategies. Making plans for how to
develop various products can also enable you to adjust existing products and grow your business.

What are the stages of product development?

Product development includes all aspects of producing innovation, from thinking of a concept to
delivering the product to customers. When modifying an existing product to create new interest,
these stages verify the potential success of the modifications at generating business. The seven
stages of product development are:

1. Idea development: Idea development involves brainstorming for new products and ways
to make existing products more relevant.
2. Editing and selection: During the selection process, the product development team
determines which ideas have the most potential to do well in the market.
3. Prototype creation: Once an idea has been selected, the company must create a prototype
or draft version of its proposed product. This prototype can be used to determine if the
product functions as intended and appeals to your target audience.
4. Analysis: At the analysis stage of product development, the company studies market
research and evaluates the possible problems with the product.
5. Product creation: After incorporating notes from the analysis into the prototype, the
finished product can be created.
6. Market testing: Before releasing the product to a wider audience, products are often
released to a smaller market or focus group. The market testing phase includes evaluating
customer feedback and the effectiveness of the product's marketing.
7. Commercialization: The final stage of product development occurs when adjustments are
made based on market testing and the product is released to the full market.

Benefits of product development strategy

Having a strong product development strategy can support your business' ability to turn an idea
into a profitable product and then modify it to remain competitive within the market. Your
product development strategy can reveal areas for improvement as well as which methods are
most successful. To receive the most benefits from your product development strategy, consider
how various techniques would work for each step and make adjustments based on your past
experiences.

Product development strategies

Some companies may focus on adapting their current products while others may mostly create
innovations, but both types of product development require a clear strategy to implement. Here
are some useful product development strategies for introducing a product and remaining
competitive within your market:

 Change ideas
 Modify an existing product
 Increase product value
 Offer a trial
 Specialize and customize
 Create package deals
 Create new products
 Find new markets

Modify an existing product

Creating a new version of an existing product with slight changes can provide your market with
the motivation to purchase an upgrade. Modifying one of your existing products and focusing on
the updates in your marketing influences customers to try the newer version of the product. This
strategy focuses on determining which features consumers would like to see improved and
making those changes.

Increase product value

Many companies engage customers by including additional value with the purchase of a product.
You can increase value by including a larger quantity of products, adding customer support or
offering premium features. New customers may be drawn to your product because of the added
benefits, while existing customers may purchase your products again to receive a better deal.

Offer a trial

Offering a free or less expensive sample version of your product can convince customers to try
your product who might not have otherwise purchased the full version. This method relies on the
quality of the product by assuming that many of the customers who experience the free trial will
purchase the full version. Offering a trial can show customers how they can benefit from the rest
of your products.

Specialize and customize

Many products can be specialized to target a specific customer group or customized to create a
unique and personal gift. Allowing customers to personalize your product to fit their needs and
lifestyle can encourage them to choose that product over a competitor who only offers a generic
version.

Create package deals

You can encourage customers to purchase more of your product by creating package deals. This
strategy exposes customers to a variety of your products through sample packs or assortments
that could solve different problems for the customer. Package deals can also introduce customers
to a product they may not have otherwise purchased and encourage them to buy it in the future.

Create new products

Another way to develop a product line is to create a new product that relates to your market.
When creating new products, be mindful of what customers are looking for without discouraging
them from buying your other products. Any new products should supplement what your existing
product does for the customer instead of replacing the original, encouraging customers to buy
multiple products from your business.

Change ideas

One strategy for developing a product can be to change your product idea. If a market is not
responding to innovation, the company may consider devoting their resources to researching
what that market wants. Not all ideas will result in a successful product, so a willingness to
change ideas when needed can be an effective strategy.

Find new markets

Many products can be successfully sold in multiple markets. One product development strategy
is to consider marketing an existing product to a different market or demographic. This could
include targeting businesses instead of individual consumers, marketing toward a different age
group or expanding your product geographically.

What is strategy development?

Strategy development is a company’s plan to achieve consistent growth. This technique lists
detailed data and objectives that describe how your team plans on accomplishing each goal. You
will also list the vision and mission of the company in your strategy to ensure each team member

works toward the same goals. Thorough research may be necessary to come up with new ideas,
and the entire process may take several months.

Why develop a strategy for business?

When managing a company, it is often necessary to reevaluate your approaches to products and
services. Whether you’re in a small business or large corporation, your organization’s growth
will depend on staying up to date with market trends and your competitors’ services. You will
also want to examine the current state of your company, how it’s grown and how well it adheres
to your mission statement. Once you have all of this information, create a strategy for further
growth that ensures your business operates at its full potential.

How to develop a business strategy

Here are several steps to follow to create a strategy:

 Create a vision statement.

 Look at past experiences.
 Define your mission.
 Research the competition.
 Define employee roles.

1. Create a vision statement

One of the first steps you should take is to create a vision statement that defines your company’s
values and objectives. Your vision statement should state your ultimate goals and clearly state
them to team members. For example, your vision statement could state that you want to be your
region’s leading electronics retailer in three years.

2. Look at past experiences

One of the best ways to improve your company is by looking at previous projects. Your team
could make a list of the most successful projects and what made them so effective. Noting these
factors can help plan future projects. You should also consider reviewing projects that did not
have the desired outcome and listing what you would improve next time.

3. Define your mission

A company’s mission statement defines its primary purpose, usually in more detail than a vision
statement. You can create both short-term and long-term goals to work towards your main
objectives. For example, you could describe what value you provide, who the target audience is
and the steps you need to take to achieve your goals. Consider making these as detailed as
possible to understand exactly what you are working towards.

4. Research the competition

One way to come up with a business strategy is to look at your competition. Make a list of your
top competitors and write down what you believe is leading to their success. Base your strategy
on this to ensure you stay competitive. If you work in a competitive field, you could add value to
your brand by introducing a new product or service that no one else currently offers.
5. Define employee roles

Each employee on your team should contribute to reaching company goals. Assigning each
person specific tasks ensures everyone knows expectations for their performance. For example,
you could tell one employee that you would like them to create a monthly financial report due on
the first of every month. You may want to go over the strategic plan several times to make sure
there are no unassigned tasks.

Strategy development examples

Here are three examples of strategy development:

Increase your company’s sales

Strategy development is helpful when you want to become a sales leader

. One of the first steps is to look at trends in historical data to find the best time of year for sales.
You could also review any previous marketing strategies to see how effective they were. Once
you have this data, you may have a better understanding of what worked well in the past and
what you can improve.

Your company can then set strategic goals, such as 500 sales in the next year or $50,000 in
profits in the next six months. Specific goals are often more attainable because you can create a
strategy with clear individual steps.

Improve customer service feedback

Another strategy development goal may be to improve the ratings your customers give the
customer service department. Compile all the feedback received in the past two years and put it
into charts. Separate the feedback by general ratings and detailed comments. Customer
comments may take longer to go through, so consider assigning employees to help with these.

For example, if you notice a large number of customers say they feel their issue was not
resolved, develop a strategy to improve these ratings by offering extra training. You could also
create a strategy for maintaining positive feedback by offering employee incentives for
outstanding customer reviews.

Add more services

Strategy development can apply to any company. It may involve a landscaping company that
wants to add more services. There might be several other landscaping businesses in the area that
offer lawn mowing, landscaping maintenance, weeding and fertilizer. They offer prices similar to
your company, so you want to find a way to stand out to local customers. You need to do
something to stand out.
You might decide to add hydroseeding and pest control programs to your list of services, as no
one else in the area performs those tasks. You may also survey your current customers to see
what their needs are. Once you decide on what to add, your team can begin promoting them and
evaluating their success after several quarters.

Ultimate Guide To Strategic Planning

Strategic planning is an organized, systematic and coordinated way to plan for achieving specific
goals. Using strategy to map out a path for your personal career, your team or your organization
can create direction and clarity, ultimately leading to success.

In this guide to strategic planning, we will explain the importance of strategic planning, how to
develop and plan a strategy and the benefits of doing so. With a strategy process in place, you
can optimize the operations of your career and establish a process for achieving goals.

Key takeaways:

 Strategic planning is often used to help businesses communicate the actions and activities
needed to assist them in reaching their organizational goals, and they often include
aspects such as an executive summary, a mission and vision statement, a strategic
analysis, an action plan and a budget.
 Creating a successful strategic plan for a business often includes analyzing market trends,
performing a SWOT analysis, writing both mission and vision statements, defining goals
and outlining different budgets for the plan.
 When you write a strategic plan for a business, it can be helpful to create a team of
trusted peers or confer with an outside consultant so you can also make your strategic
plan clear and effective.

What is strategic planning?

Strategic planning is a business management strategy that helps businesses communicate
organizational goals and the activities and actions necessary to reach those goals. Basic ideas of
strategic planning include:

 Proper focus of manpower and resources

 Set priorities
 Adjustment of organizational direction
 Alignment of stakeholder, shareholder and employee goals
 Collaboration at all organizational levels toward a common goal

When properly applied, strategic planning can determine the current status of a business, where it
plans to go in the future and ways to measure success. There's no one-size-fits-all method on
how to develop a strategic plan, as all industries are different. Depending on your role at a
business or experience on the job, you might also have to tweak strategic planning strategies to
suit your short-term and long-term goals.
But discovering the various ways to draft, apply and follow up on a strategic plan has many
advantages in companies of all sizes. With strategy and planning, you craft a roadmap to
profitability, efficiency and possible expansion.

How to develop a strategic plan

The more thorough you are in your foundational planning, the better your plan will be. Creating
and writing a strategic plan starts with a development phase. Remember that this step can take
weeks or even months to craft. This should be highly detailed, research-intensive and well-
written to reduce ambiguity and confusion.

Here are the steps involved in developing a strategic plan:

1. Analyze industry, consumer and competitor trends.

2. Perform a SWOT analysis.
3. Write your mission statement.
4. Create a vision statement.
5. Define your long-term and short-term goals.
6. Create core values and departmental objectives.
7. Define budget, finance and staffing needs.

A good strategic plan, when completed, allows managers to handle key decision-making and
guides the internal workings of the business. Let’s look at each of the above steps in more detail:

1. Analyze industry, consumer and competitor trends

The first step toward organizational strategic planning is to align with the organization’s
established mission and goals. This starts with analyzing the industry, market and competitor
trends.

The best way to start this process is by considering external factors in your business, rather than
internal facets. Some of the ideas you should study in your analysis include:

 The size of your respective industry

 Pricing trends
 Governmental regulation, licensing and other potential issues
 Product fads
 Consumer issues regarding products and services
 Competitors and threats, as well as their actions over the past six months to a year
 Industry growth rate

Most of this information is readily available. Once again, the more thorough and heavily
researched these areas of your plan are, the more effective your plan will become. Understanding
what the industry is from the top-down and differentiating your brand from competitors are two
of the most crucial aspects.
2. Perform a SWOT analysis

Now that you've addressed the research part of your plan, you should put together a SWOT
analysis

. This analysis evaluates you, your team or your organization’s strengths, weaknesses,
opportunities and threats. Like many other processes in strategic planning, it is essential to take
the time necessary to provide an in-depth assessment of each aspect.

 Strengths: Think about what you do better than anyone else in the industry. A highly
skilled staff, a high amount of capital or cash resources, investors, industry growth, low
barriers to entry, customer base and profit margin can all factor into what you do better
than your competitors.
 Weaknesses: Lack of capital, a staff with little training, low-profit margin, high barriers
to entry and a small customer base are all examples of weaknesses. The SWOT process
can help when brainstorming solutions to improve upon weaknesses.
 Opportunities: Opportunities are areas in which you, your team or your organization can
excel. Examples of opportunities include willing and interested investors, brand
recognition from other product offerings, new product offerings, patents or anything else
that offers a chance for success in some way.
 Threats: Threats include anything that can cause your organization to suffer. Examples of
these are market trends, consumer spending power, a lack of cash flow or decreasing
prices for your product.

The SWOT analysis focuses on both internal (strengths and weaknesses) and external
(opportunities and threats) factors. It is important to use this and other analysis tools during this
stage to get a good understanding of your position and what goals to work toward.

3. Write your mission statement

Developing a mission statement can help your organization to define goals and plans for how to
achieve them. Specific and straightforward, a good mission statement can bring clarity to your
organization at all levels by defining core values and explaining the organization’s reason for
existence. These two aspects are central to strategic planning.

For examples of mission statements you can use to inform your own, most companies post their
statements online for customers. Search your favorite brands online to see how they state their
goals and core values. Mission statements can be short or long. The idea is to address why your
business exists and what you can offer customers.

4. Create a vision statement

A vision statement should explain how you will fulfill the mission statement. To craft a great
vision statement, remove jargon and industry language to make it accessible for everyone.
Unlike a mission statement, a vision statement is used as inspiration for employees rather than
outsiders such as investors or customers. Writing a vision statement will support and maintain
your brand’s values, goals, purpose and mission.

You can create your own vision statement by answering the following questions:

 Where will the brand be in five to ten years?

 How will my company interact with customers or improve their life?
 What will be my company's impact on the industry? the world? consumers?

After you’ve answered the above questions, you can put together a vision statement that outlines
your plans for the future.

5. Define your long-term and short-term goals

After completing the SWOT analysis and defining the company’s core values you should
develop short and long-term business goals. Long-term goals should align with the company’s
mission statement while short-term goals are milestones that will help you achieve them. Using
the SMART goal framework can provide direction for establishing specific, relevant goals.

While your goals should be specific to your organization, here are a few examples of areas in
which goals can produce value:

 Improving operational efficiency

 Developing company culture
 Increasing revenue
 Changing or upgrading product offerings
 Supporting new sales and marketing strategies

The most important aspect of creating a goal is to make it challenging, yet attainable. Also, you
should have a method to measure your goals for improvement.

6. Create core values and departmental objectives

Another part of strategic planning is creating core values. These not only help craft your mission
and vision statements but they can also function obversely. This means that your vision and
mission statements can help you determine what your core values are. Core values are usually
one or two words that describe the fundamental beliefs of your organization.

Examples include:

 Honesty
 Quality
 Dependability
 Integrity
 Passion
 Diversity
From these core values, you can derive departmental objectives. Departmental objectives help
build strategy and are a core component of corporate strategic planning. Each of these objectives
should be set on an annual basis to allow your team to achieve them and to tweak them as
necessary in the following years.

For example, a company's goal might be to launch a new product line. Therefore, your
departmental objective for your research and development team might be to build a new product
that satisfies problems or issues that consumers may have. Using specific, measurable and
actionable goals within the department can help achieve success. In some instances, companies
provided bonuses to employees that met these objectives before the given deadline.

Related: Using Key Performance Indicators (KPIs) To Achieve Goals

7. Define budget, finance and staffing needs

The final part of your strategic plan is to determine the budgeting, financing and staffing needs to
achieve the set goals. Each department should play a role in determining what they will need to
do their part in supporting the organization’s mission.

Standard sections of a strategic plan

While your plan might include different elements depending on your organizational needs, here
are the standard sections of a strategic plan:

 Executive summary: Summarize the purpose of your strategic plan in the executive
summary. This should be short and to the point. In some cases, you might want to write
this portion last so everything is fresh in your mind and you can conclude the ideas in a
few sentences.
 Signature page: This is a page for all high-level stakeholders to sign off on your strategic
plan.
 Company description: This can be helpful in providing context, such as a brief history of
the company and its products and business offerings. Highlight relevant achievements of
the brand that pertain to the plan.
 Mission and vision statements with core values: Core values

 can also go in this section to help solidify your mission and vision statements.
 SWOT and strategic analysis: To introduce your goals and plans, you should include your
SWOT analysis along with any other important research that informs the rest of the
strategy.
 Action plans: Your action plan should clearly explain how you plan to achieve your
vision and goals over the given timeframe. Be precise about your actions and how to
apply the plan across the company.
 Financing and operating budget: Finance professionals or accountants can help you put
together projections that to how much money you need to finance your action plan.
Include items such as forecasted cash flow, expenses, revenues, return on investment,
return on equity and any debt you may accrue.
  Evaluating the strategic plan: Provide a detailed rubric for evaluating your strategic plan.
This could include analyzing year-end numbers, asking for customer feedback,
interviewing employees and more. Set forth one or two sentences that sum up how you
plan to measure the success of the plan.
 Execution: This should explain how you want to introduce the plan to the departments,
employees and individuals involved. This section should be provided to every
stakeholder in management and on your team. Each individual should clearly understand
how they contribute to the plan as it pertains to their position. They should understand
what it means to achieve success in their required responsibilities.
 Feedback and scorecard: A feedback or scorecard section is optional, but it may allow
management and employees to ask valuable questions about the progress of the plan. A
scorecard is a visual method that works better with most people than a written document.

Strategic plan development tips

When writing a strategic plan, consider the following tips to make it clear and effective:

 Keep all of the language as simple as possible. Use clear, straightforward language that is
easy for everyone to understand.
 Use a team of trusted individuals to help you draft the strategic plan. Using a variety of
perspectives will make the final document better.
 Hire a consultant if needed. Many consultants specialize in strategic planning. While they
will require payment for consulting services, their expertise can help you create a better
strategic plan that translates to profits in the future.
 If you're a mid-level manager or individual contributor, send strategic planning drafts to
senior management for approval. Doing so ensures the plan aligns with higher-level goals
within the organization.
 Make your document easy to read and refer back to. Use formatting such as bolding,
underlining, and bulleted or numbered lists to organize the information.

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How to write a strategic plan for personal career goals

A personal strategic plan is beneficial to individuals who want to improve their job outlooks,
strengthen their personal skills and achieve career goals. Much like a strategic plan for a
business, your personal strategic plan should help you:

 Assess your personal strengths and weaknesses.

 Assess your milestone goals over certain time intervals.
 Assess where you see yourself in the future.

To develop a personal career strategy, consider the following steps:

1. Outline your core values

Understanding what is most important to you can help you identify your career goals

. Whether you value financial stability, helping others, building relationships or other items,
these should drive how you establish your strategy.

2. Write down SMART goals

To develop a plan, you need an endpoint or destination. Identifying your goals can help you
solidify your direction and understand what you are working towards. These can be career goals
specific to your current job, such as earning a certain role or level of seniority, or more general
goals such as earning a certain degree, skill or starting your own business. To meet the SMART
goal

standards, your goals should be Specific, Measurable, Achievable, Relevant and Time-based.

3. Identify milestones

Once you have set long-term goals, you should identify which milestones or short-term goals
you will need to reach to achieve them. If you are seeking a promotion, for example, you should
set up milestones (such as learning certain skills or leading a certain number of people) that are
required to earn the promotion.

4. Keep your goals updated

Each year, you should update your strategic plan to offset any type of change in your life. Your
goals may change or you may need to add, remove or revise the milestones you have set for
yourself. Keep track of what you have achieved and what areas you need to focus on.

Strategic planning is a vital part of any business, providing documentation to track progress
toward a goal. Remember, strategic planning is a process and not a singular event. Strategic
planning aims to improve or transform a company over a long period of time and should be
addressed and adjusted regularly.

What is Product Development Strategy

(Definition and Examples)
At a certain point in your business, a growth plateau will be reached. This may happen due to
changing market trends, new competitors, or shifting consumer behavior. No matter the reasons,
this is the time when you’ll need to examine new strategies to increase your revenue.
Improving your existing products, or creating fresh new products that have a demand in your
market can help keep your growth curve looking healthy.

In this blog, we’re covering product development strategy and some examples of this in practice.

Product development strategy definition

This is a strategy where your company plans and develops new products, or upgrades current
products, and introduces them to an existing market. It’s a particularly useful strategy in SaaS
due to the need to find differentiators to maintain a competitive edge.

A successful product development strategy places emphasis on market and consumer research,
conceptualizing, building, testing, launching, and marketing to eager customers where there is an
existing or increasing demand for a solution.

This strategy can take varied approaches, such as:

1. Developing a new product similar to your current product

2. Reinventing or improving your existing product
3. Creating a new product based on your customers’ purchasing behaviors

The Ansoff Matrix

The product development strategy forms part of the Ansoff Matrix. The matrix framework was
created in 1957 by Igor Ansoff as a guide to help companies plan their future growth. It contains
four alternative business growth strategies which are useful when a company is seeking to enter
into a new or existing market, with either current or newly developed products.

Measuring your new product development strategy

Having a new product development strategy in place helps determine your updated product
pricing model, enhanced features, and the amount of profit your company will make.
There’s a lot at stake for your company. Developing a new product needs to be weighed up
against the risk involved, overall costs, pressure on your team’s resources, and time to market.

Will your product development meet the needs of your customers? Will it stack up against your
competitors’ own product development offerings? Will it have the ultimate payoff of boosting
your bottom line?

Tracking your product development process means you can manage the progress and measure
the outcomes of creating new products and modifying existing ones. There’s no standardized
way to measure product development, but it’s important that you agree with your development
team on the appropriate KPIs to attach to your project as you move along the roadmap from
strategizing to completion.

Product development strategy examples

Strategies for successful product development start with research in the marketplace. If your
business has solid data for your target market, you can assess and aim to meet their needs by
building solutions. It’s always worth looking at how leading brands are solving emerging
problems or reacting to changes in consumer trends.

Product development can often be as simple as taking an existing product, modifying it slightly
and selling it into your existing market. This adds value for customers, who may well buy your
new product, even though they have the current version. Apple is a prime example of this.

A new iPhone is released every couple of years, and the upgraded features are often quite
minimal. A better camera, thinner design, wireless charging. Despite these seemingly small
improvements, Apple enthusiasts are always keen to get their hands on these newly developed
products and are happy to pay increasingly large sums for the privilege.

With this development strategy, Apple can continue to drive revenue with a single product that
they gradually adapt over time as technology and consumer demands change.
In SaaS, a product development strategy might look like Mailchimp working
towards introducing a CRM that integrates with its email software, for example. The lifecycle of
software is affected by both advances in technology, and the daily requirements of users. To
survive in the competitive online arena, SaaS companies must be agile enough to anticipate and
respond to these changes to ensure they remain on the cutting edge. Mailchimp responded to the
needs of its many users who required a more flexible, all-in-one solution to manage their work,
and so the CRM functionality was born.

We can also look at product development strategies evolving as collaborations between

companies, such as Spotify and Uber. These market leaders partnered to provide a richer, more
personalized rideshare experience for users, and in turn, boosted their own brands and increased
demand for their services.

However your company chooses to go about product development, it’s important to lay out a
strategy that spans from collecting data through to building, testing, launching, and then
measuring the results. Having a solid roadmap ensures that your team and key stakeholders are
aligned in their product development mission, and that the end result is a success.

What is a product development strategy?

21 min read
How can you improve your development activities to give you a better return on both
time and investment? In this complete guide, we’ll help you identify which product
development strategy is best for you to support your growth targets and more.

Your product development teams are under pressure to improve existing products and services,
create new ones or develop offerings to better suit customers. So, how can you improve your
development activities to give you a better return on both time and investment?

In this guide, we’ll help you identify which product development strategy is best for you to
support your growth targets.

Free eBook: The ultimate guide to product development in times of change

What is a product development strategy?

A product development strategy sets the direction and/or focus for new products or the steps to
revise existing ones. This includes objectives and goals, funding, marketing and market
penetration tactics.

Through a product development strategy, organizations can gain a competitive advantage as the
strategy helps to place products in the best possible position to succeed within the market.

Product development strategies are linked to corporate business strategies, such as plans for
growth, profit, diversification and entering new markets. Also, while product development
strategies are part of the new product development process, they are not the same.

What’s the difference between product development strategies and the product
development process?

The product development process covers product development stages across the entire product
lifecycle, from idea generation (conceptualization) and development, to testing and launching to
customers.

A product development strategy joins up existing market and customer research data, and the
marketing strategy and business strategy with the product development cycle, resulting in a high-
level guide for activities.

Why use a product development strategy?

Well, as mentioned, a product development strategy can improve product sales, business growth,
support moves to new markets, diversify the product portfolio and enhance the customer
experience.

But there’s more — for start-ups, a product development strategy lays the foundation for future
activities, while for larger organizations with a more ‘mature’ product portfolio (and a suite of
solutions that’s difficult to ‘change’), it helps them to identify new opportunities to leverage.

This is particularly useful when you experience a plateau in revenue sales and you want to
evaluate next steps. So, whatever the scenario, a product development strategy is integral to the
ongoing success of a product and its growth, which in turn benefits the overall business.

Now, if you’re thinking about a product development strategy for the purpose of future growth,
you should familiarize yourself with the Ansoff Matrix. This matrix will help you to work out
the best route to product and business growth.

The Ansoff Matrix

The Ansoff Matrix, also known as the Product/Market Expansion Grid, is a matrix framework
tool, created by Igor Ansoff. It was first published in 1957 in the Harvard Business Review, in an
article called ‘Strategies for Diversification’, to discuss new product development strategies.
It helps companies to make strategic decisions, by looking at the various options and the
associated risks. It shows four routes to growth – market development strategy, diversification
strategy, market penetration strategy and product development strategy – that are placed in a 4×4
grid matrix.

This grid helps leaders see, at a glance, how useful each route is for their strategic aims: whether
that’s entering a new target market, creating a new product, or staying within their existing
market and product base.

An additional takeaway from this model is that every time you move from one route to another,
risk is increased. So, exercise caution.

The benefits of a product development strategy

As well as what we’ve outlined above, a product development strategy can also help in several
other ways:

 Avoid risk at the product ideation and conception stages

Your product development strategy can make use of the market research work you’ve already
done. This eliminates the guesswork in understanding your market and the requirements at each
stage of product development. As you do more research, or as your company grows, your
strategy can also adapt with you to get the best results.

 Help your existing products respond to market changes quickly

If you want your product and services to remain competitive in your market, using a product
development strategy to measure if you have a successful product can help you monitor the
progress of your growth. When you need to improve or change plans, you can be agile and
amend your development strategy or adopt a new one to suit your new circumstances.

 Decision support to remove under-performing products

Getting feedback on the success of your product’s development journey can help you make time-
sensitive decisions about overhauling offerings that aren’t meeting the targets. This means that
resources, like money and time, can be reallocated for better use.

 Lead your development team towards a bigger bottom-line impact

A product development strategy gives a clear big-picture direction forward, so development team
managers can lead cross-functional teams towards priorities that help achieve the end goal. More
efficient product development can help enhance your products more efficiently, which has a
knock-on effect on sales generation.

Proactive strategies vs reactive strategies

Proactive product development strategies

The 5 proactive product development strategies are used when companies want to gain quick
sales growth, either by selling high volume or by entering new markets.

These proactive strategies are:

 Investing in market research – By investing in market research, data on trends, and

market analysis, companies can find new or hidden opportunities to go for.
 Investing in research and development – Through investment in R&D, products can be
improved by new insights that can give the company an edge over its competition.
 Investing in entrepreneurs – Supporting internal idea generation empowers employees
to create product ideas, which could promise future revenue opportunities.
 Making alliances – Joining an alliance of other companies enables companies to pool
resources and technology, providing greater potential for making progress on products.
 Acquire other companies – Gaining knowledge, expertise, and control over other
competing products in the market through acquisition gives companies a lot of power.

Companies that use a proactive product development strategy usually progress further in product
development, but companies must first have enough resources to develop new offerings in the
first place.

Those that do can monopolize the market quickly by capitalizing on unforeseen opportunities,
leading to a degree of market protection. However, proactive approaches are often harder to
implement and more costly.

Reactive product development strategies

Reactive product development strategies are used by companies that respond to changing market
situations, sometimes under pressure.

These reactive strategies are:

 Responding to customer requests – By taking note of customer feedback, companies

are able to better adapt products and services to suit their current customers’ needs.
 Defending against the competition – Companies using this strategy may undercut prices
or outshine the competitors that have the upper hand, to be more attractive to customers.
 Copying competition – Companies may look at a new product that another competitor
has entered into the target market and create a copied version to attract customers away.
 Positioning as Second, but Best – Companies react to a new product that a competitor
has entered into a target market by creating an improved version, which they promote as
better.

Unlike with proactive product development strategies, reactive product development strategies
are used when companies want to focus on their existing products and services.
The use of a reactive product development strategy would work where companies don’t have
influence over distribution, patents or market protection and resources are tight.

Reactive strategies are usually more affordable and easier to implement, but they lack the
foresight and long-term opportunity that could manifest via proactive strategies.

Commercial examples of product development strategies

If you’re wondering how you can deliver a product development strategy, let’s explore some
examples of companies deploying their own.

Changing an existing product or service idea

Changing an existing product can seem like the product teams are messing with the product
concept, however, it can actually be a positive move for differentiating your product or
responding to what the market wants. This willingness to move from one product to another can
have significant gains.

Create an upgraded or better version of an existing product

By creating incremental versions of a product that keeps changing, improving, and offering
more, the market comes to expect better things from the latest versions. This motivates
customers to buy the latest and greatest, solidifying your market position for the long term.

For example, Apple is famous for creating a buzz around its new iPhone releases each year –
screens get bigger, cameras get better and more functionalities are added.

And, with a loyal customer base, Apple’s iPhone products continue to be one of the most bought
and sought after phone lines on the market. With each purchase, that loyalty deepens and Apple
has a ready and waiting fan base that demands the next version.

Change your product to appeal to your market

When companies keep tabs on the needs of their market through customer feedback methods or
research, it’s easy to notice when customers’ requirements change.

For those that listen, any change in market requirements is like a bright neon sign — and they act
on it. They amend their products to suit new requirements, ensuring the market always gets what
it wants and needs.

For example, Coca-Cola is famous for putting the needs of its market first and adapting its
original Coke beverage to suit new tastes. As its market has become more health-conscious,
Coca-Cola responded to its customers’ new lifestyles by creating new variants with reduced or
no sugar content. This led to Diet Coke and Coke Zero products that keep Coke in customers’
lives while putting their health first.
Increase a product’s value

If your product has more features and benefits, the market is more likely to choose your brand
over another competitor selling the same thing. This is because the product offers more
‘perceived’ value and is considered a ‘better deal’. Other things that increase value include
lowered sale prices or variety.

For example, IKEA is well known for its consistent supply of sturdy furniture at a low cost. The
company is able to provide these products as they buy and sell in volume in lots of locations, so
the supply chain processes are able to offset higher costs. The company is also able to diversify
by offering a variety of designs, which helps give customers design options. What’s crucial is
that despite IKEA’s furniture coming at a low and accessible price, many of its products are top-
notch.

Offer products at a discount or on a trial-basis

Trial periods for products and subscription-based services can give your target market
confidence to use and make them part of their lives. This onboarding helps to convert customers
to your brand, which helps for repeat and follow-on business. These trials also are ways to make
quality but expensive products appear cheaper by giving away an initial usage period for free.

For example, Netflix, Prime, Disney, and Amazon provide trials of their streaming services to
customers to give them a taste of what broadcast content is available to consume. The hope is
that as people enjoy a series of TV programmes or access movies during the trial, they will be
less likely to remove the trial and continue to pay for the service at the full price.

Specialize or customize your products

For customers that are looking for something right for them, a personalized product or service
can make them feel like an individual and valued by the brand. This can help create a positive
user product experience, which can lead to increased brand loyalty and further sales. The more
unique and bespoke a product can be, over a ‘run-of-the-mill’ generic one, the more ‘different’ it
will seem.

For example, Moonpig.com is a bespoke card creation company whose product development
strategy is to supply customers with occasion-based templates that they can fill with bespoke
names and images. This differs from the generic cards with non-personalized messaging that
seems less ‘special’ in comparison. Moonpig.com relies on the market’s desire to want to go the
extra mile for their loved ones.

Create package deals to entice customers

By creating product packages that give customers additional options, such as add-ons, you
present them with better value for money. A package deal may provide a discount, which could
encourage your target market to make more purchases, earning you more revenue than if they
had purchased the original item on its own.
For example, technology manufacturing companies will often bundle laptops with mice,
webcams, and other peripherals to increase the likelihood of purchase. As the bundles are usually
cheaper than buying each item individually, the customer saves money in the long run while the
business increases its sales. This strategy also works when organizations need to sell less popular
products — by bundling them with the most popular items, they can quickly get rid of them,
allowing them to make room for new stock.

Create new product lines

Now, what if an existing product line has lost popularity and is no longer being purchased at the
same volume? When companies have tried all other routes, a good product development strategy
could help rebrand offers or help identify new ones.

For example, Gap started as a record store selling jeans in 1969, but when the owners faced
bankruptcy, they had to make a change. They pivoted, changing their product line to apparel and
clothing, restarting the brand and attracting customers in the process.

Look for new market opportunities

If a product or service isn’t selling well in one market, consider selling in another or in multiple
markets at the same time. This could mean geographic markets by location or different consumer
markets by demographic. By entering into another market and altering products to suit,
companies can reach and market to new, interested audiences.

For example, Amazon is a great example of a company that’s pivoted and entered new markets.
Originally, Amazon sold books in the US, but later diversified its offering to sell all manner of
products globally. From clothing and home appliances to web services and Prime TV streaming,
Amazon has captured interest from different audiences and markets worldwide.

Measure your product development strategy

Unfortunately, there is no one-size-fits-all approach to creating a successful product strategy.
However, what we can say is this: as you consider product development strategies, whether for
growth, profit or new market opportunities, you’ll encounter a lot of trial and error.

But what’s most important is that you plan and alter that plan accordingly. Then, once you’ve
developed and deployed your strategy — measure it. See what’s working and working well and
then replicate that success at scale.

With a defined vision and KPIs from the start, and consistent actions towards meeting them, you
can see whether you’ve achieved your goals or if you’re way off.

That’s the key to success.

Here are some examples of brand success metrics and product success metrics that can support
analyzing your product development strategy success:
  User behavior towards their products and services (including how they’re interacted with)
 Revenue generated by-products (including monthly recurring revenue)
 Customer lifetime value (CLTV or LTV)
 Customer acquisition costs (CAC)
 Retention and churn
 Product Satisfaction (PSAT)

There are more KPIs to consider, based on your industry, products, and market, so planning your
method for monitoring, capturing, and assessing data at the beginning is useful.

Make product research and development easy

Clearly, there’s a lot to consider when it comes to your product development strategy, including
the surrounding research and the data you collect.

So how can you keep on top of all of this and leverage the insights you collect so that you can
make the right changes to drive business, product and revenue growth?

We can help.

With Qualtrics’ product research and market research services, you have all the tools you need to
create products that customers love and refine existing ones.

The Qualtrics product experience management software includes:

 Product naming research tools

Want to find the ideal name for your new or existing products? With XM solutions product
naming, you can quickly validate how your market feels about each name you consider.

 Pricing research software

Find out how to price your products for maximum profitability. Featuring a powerful survey
design for pricing studies (with advanced logic and data visualization) and conjoint studies, you
can run all your pricing research on a single platform.

 Concept testing and conjoint analysis

Validate your best product ideas with concept testing. Test every aspect of your product concept
— from features and branding to messaging and appeal — to set your product up for success.

Then, use conjoint analysis to optimize your product configurations, including what packages
and prices will have the greatest impact on your business.

 Product experience management (PXM)

This measures the experience of the product in the market, to understand experience gaps and
identify, influence and prioritize your product roadmap, all with a system of action for
everything from market assessment and concept testing to pricing and packaging.

 Market research services

Uncover deeper and more targeted data with Qualtrics Research Services and our network of
partners. Trained experts help unlock time and cost savings, while flexible service options let
you choose how much — or how little — support you need.

Use your complete product development strategy and your new product development process in
a strategic way by combining them with a Qualtrics solution.

How to Create a Product Development

Strategy
Product development describes the entire process of bringing a product to the market. The
process can include identifying a product concept, seeking market feedback about the idea,
creating a prototype, preparing marketing and sales campaigns, building the product and
releasing it to customers, and making adjustments based on market feedback.

How to Create a Product Development Strategy

The product management team plays a crucial role in product development—acting as the
strategic directors of the process. But although we use the two terms often interchangeably,
product development is not synonymous with product management. Product development is a
much broader process that involves the coordinated effort of many teams across a company,
including:

 Product management
 Design (UX/UI)
 Development (or manufacturing)
 Marketing
 Testing and QA
 Sales
 Shipping or distribution
 Support

What is a Product Development Strategy?

To achieve market success with its product, an organization must first map out a methodology. It
should be a step-by-step plan that will allow the team to move the product forward at each stage
along its journey from concept to market launch.

We call this predefined process and sequence of events the product development strategy.

A product development strategy is crucial for several reasons. Here are just a few.

1. It helps align the cross-functional team around the big-picture goals and
priorities from the start.

This will help the team make better-informed tactical decisions throughout the development
process when challenges and questions arise—which they always do during product
development.

2. It provides the team with feedback and guidance for every step of the
product’s development journey.

Imagine that during the market-validation stage of its new concept, the product team finds lower-
than-expected levels of interest from its user personas.

If the team is operating from a predefined product development strategy they will be in a better
position to know whether to proceed with their original plan or to pivot and prioritize other
functionality first.

3. It enables more efficient development.

When a company has a clearly defined product development strategy, there will be a better sense
of how to allocate resources and estimate timeframes throughout the development cycle.

In an agile development organization, this will also help clarify which task-level initiatives take
priority at any given time, and which ones to include in an upcoming sprint.

Build a Product Development Strategy Around Design

Thinking
Product development strategies differ by company, industry, and other factors. There is no one-
size-fits-all approach that works under all circumstances. There are common elements to many
successful product development strategies.

Let’s discuss how a company could build a product development strategy around the design
thinking approach—a framework for creating products based on looking at the world from your
user’s perspective.
The Design Thinking Approach:

1. Empathize with users

2. Define the problem
3. Brainstorm potential solutions
4. Build a prototype
5. Test your solution

Applying a Product Development Strategy to The Design Thinking Approach:

Step 1: Empathize with users.

Home appliance manufacturers devised a simple strategy decades ago to see the world through
the eyes of their users. The product managers for these companies would visit the homes of
customers and ask to watch as they used their products—dishwashers, vacuum cleaners,
blenders, etc.

The PMs would take note of which features customers used, how they activated those features
(which often wasn’t the way the company intended), what problems they encountered while
using the products, and what if any workarounds they came up with.

For example, let’s say a customer is dealing with a vacuum cleaner with a long cord that tangled
easily. The customer might simply throw the cord over her shoulder while vacuuming. It
signaled to the product team that they needed a better solution to help users keep the cord out of
the way while they vacuumed.

You might not be able to visit your customers’ homes, but what strategies can you devise to gain
a sense of how your user persona views the world. And, how can your products solve their real-
world challenges?

Step 2: Define the problem

Now that you’ve been able to view how your users view the world, you can think through some
of the challenges they face. Where have you noticed them throwing a vacuum-cleaner cord over
their shoulders?

For every step in your product development strategy, you will want to create a structure, a plan.

You might organize your work into the following 3 steps:

1. Write down every user pain point you’ve identified.

2. Distill these into a shortlist, just a handful of pain points. You can narrow the list to only the
most severe pain points you’ve found, or according to pain points that you believe your team
could most quickly and easily develop a solution. Or a combination of both.
3. Run the list by your product team for additional input, and to arrive at a list the team agrees is
worth pursuing.

Step 3: Brainstorm potential solutions

Again, in a product development strategy, you’ll need structure at every step. Brainstorming does
not mean simply sitting in a room alone, thinking of ideas. Build a process around it. For
example:

1. Pull together your cross-functional team for an open brainstorming session. Before this
meeting, you’ll also want to share with the team your findings from whatever research you did to
gain more empathy from your users’ point of view. It will help the team better understand the
types of solutions you’re hoping to build, and why.

2. Establish go/no-go criteria for each suggestion at the beginning of your session. You might
decide, for example, that each person who presents a product idea has 5 minutes to persuade the
group that it’s viable. Then, if a majority of the team agrees, the idea advances to the next level.

3. After you’ve narrowed your list of product concepts down to a manageable number, conduct a
rough calculation of time, budget, and resources needed to develop a minimum viable product or
even a minimum viable feature. Now you have another set of criteria to help you narrow your
choice of which product concepts to pursue.

Step 4: Build a prototype

Here you will coordinate with your designers and your development team to build an MVP or a
working version of your concept that you can put in real users’ hands to gauge their level of
interest.

At this stage, you will have a broad idea of the market problem you’re addressing and your
product’s big-picture strategy for solving it. Share this idea with your designers and developers.
Let them apply that strategic understanding of their work.

Step 5: Test your solution

In the design thinking approach, this final stage refers not to internal QA testing but to allowing
your user personas to try your product and tell you what they like and don’t like about it.

And because this is part of your step-by-step product development strategy, you will want to
apply structure to this stage of your product’s journey. You might, for example, want to establish
your go/no-go metrics upfront. Will you consider this concept viable if 30% of users say they
were impressed with your MVP? If 10% say they’d buy it? Would these numbers need to be
higher?

Note: The hypothetical above applies an example of a product development strategy to a specific
approach for creating products. But the design thinking approach is only one of many ways that
product teams can go about coming up with product ideas worth pursuing. In those other
approaches—the New Product Development (NPD) framework is one example—the individual
steps in your product development strategy would look different.

An Agile Product Development Strategy

The basic concepts of a product development strategy should remain constant in any type of
organization. That means creating a step-by-step approach to development, keeping everyone
aligned around the overall strategy. But agile companies approach development differently, and
this will affect some of the details of how they plan and execute their product development
strategy.

The main difference will be in how quickly the team iterates its product based on market
feedback. In a traditional organization, the product team will spend more time and build a
complete product before putting it into users’ hands and analyzing their feedback.

In an agile development organization, by contrast, the team will build the minimum functional
solution they can and release it to users as quickly as they can. It is where we get the concept of a
minimum viable product.

The agile approach can make for a better product development strategy. It allows the product
team to spend more time gathering and analyzing real-world feedback—because it’s putting the
product into users’ hands closer to the beginning of the process. This process means every
subsequent stage of development can benefit from analyzing actual product usage or from
hearing users’ thoughts and feelings about the product.

Product Development Strategy for Existing Products

To this point, we’ve discussed product development strategies only in terms of creating a new
product. But product teams can and should apply this step-by-step framework to a wide range of
other strategic plans. Use a product development strategy for:

 Creating a new product

 Updating an existing product
 Enhancing or repositioning an existing product to enter a new market
 Extending an existing product to including new pricing models or tiers
 Reducing and eventually eliminating product updates and support as it declines
 Sunsetting a product at the end of its lifecycle

What is a Great Product Development

Strategy?
With new products entering the market every day, there’s an ever-growing need for better product
development. Things like the industry, type of product, features, and other factors come into play.
That’s why you need an excellent product development strategy.

A lot of companies tend to focus on a product based on their customers. Some decide to offer a solution
to an existing problem through their product. But, in all cases, until they have a proper product
development strategy, there’s a good chance they’ll fail somewhere along the line.

You can have the best ideation process and product idea, but it’s not going to do much without a
product development strategy. If you’re interested in learning more via video then watch below.
Otherwise, skip ahead.

In this article, we’ll go over what a product development strategy is and how you can develop a
great one for your product.

Let’s get started.

What is a Product Development Strategy?

A product development strategy is a process of bringing a new product into an existing or new
market by doing continuous market research, thorough testing, and careful product concept
planning.

It can also be about bringing an existing product into a new market. At times, you may also want
a product development strategy for any current product in the current market space; however,
that usually happens if you’re introducing a new feature, are rebranding, or launching a new
complementary product line.

According to the product life cycle, every product eventually plateaus as the business revenue
growth diminishes. That’s usually when companies adopt new product-led growth strategies,
additional product lines, or a new marketing strategy.

Some companies focus on new product development strategies that allow them to create new
products to help current products grow too. It doesn’t matter whether you have a successful
product or not; you can use a product development strategy to improve growth.

A product development strategy usually works along with a business strategy. Depending on
whether it’s the commercialization of a product, additional iterations of an existing product, or
anything else, the product development process can differ.

The functionality of the product is usually the result of extensive market research through focus
groups. That helps understand the customers’ needs in certain demographics and target markets.
The development team can then use that data for brainstorming and come up with a proper
strategy.

Product Development Strategy Process (NPD Process)

The entire new product development process (NPD process) can be summarized into eight steps.
It’s the same for startups, SMEs, and even enterprises. All development projects go through
these steps, and they are crucial to the success of the product life cycle.

 Ideation Process

The first step is idea generation, where you systematically brainstorm new product ideas based
on real-world problems, existing market products, and basic target audience research.

For any product, you need to come up with hundreds of ideas, so you can decide on a few good
ones. There are two ways to come up with ideas.

You can either go for internal idea sources where existing company stakeholders and employees
come up with ideas. That includes research and development, product managers, marketers, and
more.

On the other hand, you could go for external idea sources. That can include everything from
outside stakeholders, suppliers, and competitors to secondary sources of inspiration.

 Screen the Best Ideas

Idea screening is just filtering all your ideas and choosing a few good ones. The point is to
pinpoint a certain kind of idea and then choose the best idea among them.

Once the product development process officially starts, you can’t go back and think of new ideas
to implement. Any methodology that’s changed during the process can cause lag and delays.

When choosing ideas, there are two things you should look at – profitability and utility.

Profitability concerns the company, and utility concerns the final user.

If you’re interested in learning how to create a great product strategy, then take a look at our
product management certifications where we help you do just that.

 Product Concept Development (and Testing)

When you’ve decided on an idea, the next step is to turn the idea into a product concept. The
product concept is a more comprehensive and detailed version of the idea.

You can develop multiple product concepts for various ideas, but that just means more time,
effort, and resources are being used.

When you develop a product concept, you need to test it out in an existing market. Product
concepts need to be pretty precise to have an impact, and that’s where the testing comes in.

When you test out concepts with target audience clusters, you can see the people’s response,
appeal, and reliability of the concept. Meanwhile, you can ask the consumers specific questions
that will help you with product design, pricing, and prototyping.

 Develop Marketing Strategy

After you’ve developed a complete product concept and tested it, you need a working marketing
strategy. The marketing strategy is developed by keeping the current market, market share, and
target audience in mind.

The marketing strategy has a few main parts, including the following.

 Value proposition
 Target market description
 Profit and market share goals (focus on SMART goals)
 Pricing outline
 Marketing and distribution budget
 Long-term profit goals, sales, and marketing mix.

The marketing strategy also allows you to track certain metrics.

 Business Potential of Proposed Product

After the marketing strategy, it’s important to evaluate and analyze the effectiveness of the new
proposed product. That includes viewing future projections, costs, and more.

To conduct this research, you can either go for market surveys or look at similar products by
other companies. Developing a sales forecast will help you estimate costs, profits, and a
timeline.

 Product Development

After the business analysis, the product development starts. Up until this point, your product was
a rough idea, prototype, or a potential product. However, this step ensures that it becomes a full-
fledged product.

This step usually requires a lot of investment as you will be spending on research and
development. Usually, the R&D department tends to make multiple versions of the product.
Officially, it’s called prototyping, and it can take months to figure out.

After you have a product prototype in place, you have to test it out. Marketers tend to bring in
customers for product testing; it helps them get an idea of what the customer wants.

 Marketing Testing

When you have a product in a place that’s accepted and ready to launch, it’s time for test
marketing. This is where you test out marketing strategies based on realistic market settings. It
helps marketers understand how the product is perceived, what needs to be done, and what other
investments the company can make.

Marketing testing can run for months, depending on the product. However, it’s best to be as
thorough as possible and use testing best practices.

 Commercialization

The final step is where you have a working product, marketing strategy, and all the relevant
information you need to make it work. At this point, you have to decide whether to launch the
new product or not.

The step is just about officially introducing and pushing your product in the market. That means
you’re going to be spending large amounts on marketing, sales, and promotions.

Keep in mind that you need to carefully plan for the introduction timing and place. If you launch
at the wrong time and/or place, your product may end up failing.

Stages of a Product Development Strategy

Product management is all about adapting and modifying your current products to create,
innovate, and actualize ideas. Product development works in a similar manner.

If you have a great product development process, you can effectively launch a great product.
However, if you want to further improve the product’s chances of success, you can follow this
product development strategy.

This isn’t a one-in-all solution to your strategy, but in fact, it is a culmination of multiple things
that make up the entire strategy. It’s not necessary to follow it word-for-word. You may need to
make slight changes and adjustments according to your industry, company, and product.

1. Modify Existing Products

Creating a newer and better version of a successful existing product can give it a massive boost.
You can add new features, work on better marketing, and upgrade other aspects of the product.

This helps bring in a fresh perspective on an existing product while giving it room to grow even
more.

It’s also a great opportunity to see what features customers tend to want the most and what they
would want to see upgraded in the product.

In the long run, it helps plan for complementary and supplementary product lines.

2. Change Up Your Ideas

While messing with the initial product idea may seem counterintuitive, it can work out in some
cases. It usually happens when the market and consumers aren’t responding well to new
innovations.

For example, the removal of the 3.5mm jack from smartphones wasn’t received well by
consumers since it meant using wireless earphones. To counter that, companies started to make
Type-C cable earphones because that’s what the market wanted.

That’s why at times, you need to devote some resources to see what the market wants and change
up your ideas accordingly.

3. Offer Product Trials

Offering a less expensive or free version of your product as a sample is a great way to convince
customers to try your product. At times, people are often skeptical about trying new things,
especially when they have to pay for them.

However, if you have a great product that’s bound to convert customers, you can offer product
trials as a way of early onboarding.

There’s a good chance that if you convince a customer with a trial for one product, they will be
more likely to buy other products too.

4. Increase the Value of Your Product

Engaging customers can be pretty easy if you add additional value to your products. Every
product provides a certain value based on its utility, but you can add more value by offering
more features, better quantities, customer support, discounts, promotions, and more.

If you’re competing with a product that offers no added benefits, customers are more likely to
buy your product because you’re providing more value at the same price.

It’s inherent to want a better deal for the same product at the same price.

5. Customization and Specialization

If you paint your entire target market with the same brush, chances are that some of them will
eventually grow tired. Furthermore, you won’t be building brand loyalty and brand affinity. That
means the moment someone else comes up with the same product with better value; your
customers will switch to that.

The best way to develop your product to counter this is to offer specialization and customization
in your products. For example, Apple offers to imprint your name on your Mac, and so does Dell
with their computers. That small but of specialization and customization improves brand loyalty
and gives the customer a sense of importance.
In other cases, it allows customers to choose a product that suits their needs and wants.

6. Create Additional Products and Product Lines

Product development is contingent on a lot of factors, but the best way to jumpstart it is by
launching new products that complement current ones.

Starting a new product line or adding products to current product lines gives you the same level
of trust the consumer has in you. Meanwhile, you can launch multiple products and build a better
product mix.

7. Focus on Package Deals

Your product might be great, but a lot of people tend to like deals. It’s a great motivator for them
to make the final purchase, and that’s why making package deals for your products works.

That way, your customers are exposed to a variety of your products in different cases. This way,
you can also make sure your consumers try out other product offerings.

8. Find New Market Spaces

Every product has the potential to be sold in multiple markets, and your product development
strategy should take that into account.

That’s why it’s best to target people in different demographics, groups, locations, and more. It
provides the product with the opportunity to grow exponentially.

Creating a Great Product Development Strategy

Your product strategy is largely contingent on your product development strategy. You need the
latter for the former. It’s also how product managers, product marketing managers, the product
team, and the marketing team can do their jobs more effectively.

However, to nail your product development strategy, you need to be consistent and thorough. It’s
best to follow all the steps in the new product development process and then utilize the complete
product development strategy.

The idea isn’t to do everything; the point is to do everything possible without compromising on
product quality or the consumers.

Lastly, always keep your product development strategy customer-focused and completely
solution-oriented.
What is Agile Transformation?
A key aspect of making this transition involves accepting and adopting the values and principles
that the agile manifesto outlines. In essence, the objective behind becoming an agile company is
to have an iterative and collaborative approach to product development that favors rapid delivery
and centers on overall customer satisfaction.

Agile transformation encourages flexibility and open communication within the company
because the fundamentals revolve around the formation of teams, building backlogs, and
producing and testing software in short cycles or sprints.

Changes at this scale are complex and require careful planning as they reshape the entire culture
of a company. Therefore, it is, necessary to have the support of employees who also understand
what it means to be agile because they too stand to gain from it.

Benefits of Agile Transformation

Many organizations reap the benefits of adopting the radical shifts that agile transformation
requires. These benefits include:

Improvements in Team Collaboration

Most organizations that switch from traditional methodologies, such as Waterfall, provide more
freedom and independence to their agile teams. Successful agile teams communicate frequently
and work in cohesion to ensure they meet objectives and produce high-value deliverables.

Teams conduct daily meetings to ensure that each team member agrees with the project’s
requirements. This helps to avoid confusion and prioritize the team objectives.

Team members are also receptive to feedback from customers and fellow team members alike.
This provides cross-functional learning opportunities that further enhance their skill sets.

Fast Product Delivery

When organizations implement the agile mindset, the agile teams work in sprints. On average,
these sprints last between one to four weeks allowing the team to deliver projects quicker and
more efficiently.

The shorter time frame means that the team focuses more on developing and testing, which
reduces the chances of defects or bugs. Also, teams make the necessary changes that enable them
to optimize and re-prioritize the product backlog in a timely manner. In the end, the project
deliverables are consistent, of high quality, and align with the objectives.
High Return on Investment (ROI)

The primary goal of any agile organization is to achieve a favorable return on investment. As
such, these organizations ensure that agile projects and overall performance are always up to par
because they determine the efficiency and eventual success of the company.

The cost of production is a key element of the agile journey, and agile transformation embraces
reducing costs by eliminating the features which are not necessary. This practice of managing
funds is common within Lean portfolio management, which focuses more on achieving business
outcomes.

Aside from the quality of deliverables, agile teams prioritize customer and stakeholder needs
throughout the development process by apprising them of updates and taking their requirements
into account. This improves the user experience, thus increasing profits and retention rates.

Challenges With Agile Transformation

Transforming an organization using the agile principles is at times, a complex endeavor and as
such, has its drawbacks:

Strain on Resources

Transitioning to an agile organization requires a considerable amount of time and investment and
it does not happen in one fell swoop. Companies need time to prepare for this transformation by
not only training their teams but also acquiring the necessary tools to do so, software or
otherwise.

Ensuring that every employee receives proper education, training, and support during this
process is vital to its success. Although this is a lengthy process, there is no need to rush.

However, consider planning the rollout in increments so as not to disrupt business. In the end,
and despite the size of the organization, the intent is that everyone understands the changes and
purpose behind the agile mindset.

Reluctance to Change

Despite efforts to educate employees, it is understandable when they are not receptive to change.
It is a tremendous undertaking to adjust from using traditional methods that have had no visible
downsides.

In such instances, allow them the space to adapt to the new methods by not only showcasing the
benefits of agile transformation but also how it improves workflow and skill set. In addition, it
helps to address their concerns on a one-on-one basis, while reinforcing the fact that there is also
support at the managerial levels.

Cross-Organizational Responsibility

The agile transformation process requires participation from every member of the organization,
and this ranges from those in leadership positions to their subordinates. Since it is such a
collaborative strategy, it tips the balance of power that exists with other methodologies.

Everyone now assumes responsibility for the various projects and, in doing so, enforces
accountability. It is, therefore, important that they take an active role in learning the agile
practices and offering feedback where necessary.

6 Steps to Achieving Agile Transformation

While agile transformation is unique to every organization, the following steps are the most
common when choosing to embark on this agile journey:

Step 1: Have a Vision

Before making the transformation, it is important to know why the organization wants to
transform its agility and how it intends to achieve it. Creating a flexible plan that accounts for
changes in leadership, structure, technology, and other metrics benefits the transformation
process.

Step 2: Build a Transformation Roadmap

Creating a roadmap facilitates communication among stakeholders and teams alike. It outlines
the exact plans, duration, and benefits of projects while maintaining the flexibility to adjust in
response to updates and changes in the market. Consider using a Gantt Chart to assist with
managing the project.

Step 3: Adopt a New Team Structure

There are several agile team formats to choose from such as generalist, specialist, and hybrid, to
name a few. The idea is to abandon the hierarchical team structures that exist in traditional
methodologies in favor of the more flexible and dynamic structures that function in accordance
with agile practices.

Step 4: Adapt and Learn

With the vision in mind, you can make an assessment that determines whether everyone now has
a full understanding of the transformation process. Keep employees up to speed by offering
regular training sessions that reinforce the agile principles.

Step 5: Engage in Frequent Communication

Regular communication apprises leadership and team members of the progress and hindrances
that occur during the transformation process. Get feedback from the team on the impact of the
transition and address their concerns with haste. Consider using town halls, seminars,
roundtables, and other methods of sharing information.

Step 6: Create a Safe Space

As the organization undergoes its transformation, it is important that individual teams understand
where they fit and remain confident in their roles. Creating an environment where the
expectations are coherent, and teams accept accountability, is vital to a successful agile
transformation.

Agile Transformation: Key Takeaways

Agile transformation entails radical shifts in a company’s culture that promote accomplishing
goals and producing high-value deliverables.

As a rule of thumb, everyone within the organization adopts the principles that the Agile
Manifesto outlines. The immediate and long-term benefits include team collaboration, fast
delivery of products, and an increase in the ROI.

Transformations on any scale are susceptible to challenges such as reluctance from team
members, a strain on resources, and the toppling of the balance of power between leadership and
team members. The key is reinforcing the new processes while also allowing employees to voice
their concerns.

Table of Contents

 New Product Development Process

o 1- Idea Generation
o 2-Idea Screening
o 3- Concept Development and Testing
 Concept Development
 Concept Testing
o 4- Marketing Strategy Development
o 5- Business Analysis
o 6- Product Development
 o 7- Test Marketing
o 8- Commercialization
 Conclusion

New Product Development Process: 8 Stages

New Product Development Process
The entire process of bringing a product to market is referred to as product development. It also
includes bringing an old product to a new market and updating an already existing product.

This entails determining the demands of the market, envisioning the product, creating the
product roadmap, launching the product, and gathering customer feedback.

A crucial component of product design is new product development (NPD). The procedure
doesn’t finish till the end of the product life cycle. By upgrading or including new features, you
can iteratively create new versions while continuing to gather consumer feedback.

The process of bringing a brand-new product idea to market is known as new product
development (NPD).

When creating a new product, there are 8 crucial stages. These are listed below:

1. Idea generation
2. Idea screening
3. Concept development and testing
4. Marketing Strategy Development
5. Business Analysis
6. Product development
7. Test marketing
8. Commercialization

Let’s look more closely at these 8 stages of new product development.

1- Idea Generation

Businesses will carry out significant user and customer research, examine market trends, and
assess their users’ needs throughout this phase. In order to build a product that can address a
problem that people are currently facing, this preliminary effort is essential. The business might
use a variety of sources to get a steady flow of fresh product ideas.
Internal sources, customers, competitor businesses, distributors, and suppliers are among the
main sources of new product ideas.
There are two different approaches you can use to coming up with new ideas:

Internal idea generation – Internal ideas can emerge from a variety of departments inside your
company, such as the technical department, sales team, and customer support.

The business develops new

ideas internally. That includes employee contributions as well as R&D.

For instance, many businesses provide a “suggestion box” where staff members can place new id
eas. As they interact daily with both the product and consumer feedback, employees are frequentl
y the finest source of new ideas.

External idea generation – External ideas are derived from outside sources, such as examining
the competition or collecting feedback from your target audience.

The major objective during this phase is to generate as many good ideas as you can while
continuing to focus on providing value to your consumers.

The business looks outside for new ideas.

This includes competitors as well as other external sources like distributors and suppliers.

Customers are the most significant external source since the new product development process s
hould be focused on generating value for customers.

In the digital age, when communication between businesses and customers is more dynamic than
ever before, gathering new product ideas from customers becomes both increasingly crucial and
straightforward.
Taking feedback from customers seriously can lead to some truly innovative ideas.

2-Idea Screening

The goal of screening is to identify good ideas and discard weak ones as quickly as feasible.

The focus of this stage is picking the idea with the best chance of succeeding. Lay up all the
options accessible for internal review. That is, for idea screening, seek for individuals with
relevant industry expertise and experience.
The ideas need to be filtered. A group of professionals selected from your internal teams
frequently handles this.

To determine the initial feasibility of each project, they should ask the following questions:

 How will using the product assist customers in the target market?
 Does the product really benefit consumers and society as a whole?
 Is this product suitable for our specific business?
 What market demand that is unmet will the product address?
  Why do you succeed when other goods fail in satisfying this need?
 Do you have the necessary processes and knowledge for product design to do this well?
 Do you possess the technological know-how necessary to produce the product?
 Does the suggested product match your capabilities for manufacturing and distributing it?
 Does product fit well with the objectives and strategies of the company?
 Do we have the necessary personnel, expertise, and resources to succeed?
 Is product cost performance better to competitive products?
 Is product easy to advertise and distribute?

3- Concept Development and Testing

Now, attractive ideas must be turned into product concepts. It’s critical to understand the
differences between the stages of the different stages:

Product idea: An idea for a potential product is one that the business may envision releasing to
the market.

Product concept: A product concept is a more in-depth presentation of the idea in

understandable consumer terms.

Product image: The way consumers perceive a real or potential product is called a “product
image.”

Concept Development

Imagine of a car company that has created an all-electric car. The concept now has to be
developed after passing the idea screening step. The marketing company job is to develop this
new product into a number of alternative product concepts. The business may then determine
how attractive each concept is to customers and select the best one.

A product concept should at the very least describe how the product will be used, its target
market, and its primary use cases. The following are possible product concepts for the electric
car idea:

Concept 1: A reasonably priced mid-size car intended to serve as a second family vehicle for
visiting friends and shopping trips around town.

Concept 2: A reasonably priced sporty small car that appeals to young singles and couples
looking for fun drives.

Concept 3: A high-end midsize utility car that appeals to people who prefer the spaciousness but
also need a economical car for commuting around the city on a daily basis.

In order for these concepts to have any real significance, they must be quite precise. Each
concept is tested in the following sub-stage.
Concept Testing

It’s important to test new product concepts with target consumer groups, such the ones
mentioned above. Consumers might be introduced to the concepts either physically or
symbolically.

Is the particular concept appealing to consumers in a significant way?

A description in words or pictures may be adequate for some concept tests. However, a more
concrete and physical presentation of the product concept may be required to improve the test’s
reliability.

Following the concept’s delivery to the group of target consumers, questions will be posed to
them to determine the consumer attractiveness and customer value of each concept.

You should know which product concept, based on customer feedback, is the best after the
concept testing stage. In some circumstances, it’s possible that numerous concepts seem to work
really well.

For instance, two distinct versions might work effectively for two distinct sub-target audiences.
The business may decide to proceed with both product concepts if each of the target groups
offers a sizable and relevant target market.

4- Marketing Strategy Development

The development of a marketing strategy is the next step in the development of a new product. It
is time to construct an initial marketing strategy for the new product based on the product
concept for bringing this new product to the market once a promising concept has been created
and tested.

The three components of the marketing strategy statement should be carefully formulated:

 A description of the target markets, the anticipated value offer, and the initial targets for
sales, market share, and profits.

 An outline of the product’s first-year marketing budget as well as its distribution and
price plans.

 Sales and profit targets for the long term, as well as the marketing mix strategy.

5- Business Analysis

Management can assess the proposed new product’s business attractiveness once the company
has chosen a product concept and marketing strategy.
Reviewing the new product’s sales, cost, and profit estimates in order to determine whether they
meet the company’s objectives is the fifth phase in the new product development process. If they
do, the product can go to the next phase of development.

The business could, for instance, research market surveys and the sales history of comparable
products to estimate sales. It is imperative to have a clear understanding of the potential demand
for the final product. This level has been underestimated in several instances.

Consider vehicles as an example, which were first a failure on the market. This step is frequently
skipped by businesses, or it is given insufficient attention. The cause is frequently a propensity to
hear only what the business has to say rather than what the customers have to say.

You might have created a fantastic product for yourself when you come up with a new idea,
carefully consider it, design the product, include all the characteristics you enjoy, and so on. This
does not necessarily imply that it will be a successful product on the market, though.

Therefore, customer feedback is essential at every stage of the creation of a new product.

The business should be able to estimate minimum and maximum sales once the initial demand
analysis has been performed in order to determine the risk level.

The business should calculate the anticipated expenses and profits for a product, including
marketing, R&D, operations, etc., based on the sales projection.

Eventually, the combined sales and cost data can be utilized to evaluate the financial
attractiveness of the new product.

6- Product Development

The process of creating a new product continues together with the creation of the real product.
Many new product concepts may simply have a word description, a design, or even a basic
prototype as of this phase.

To make sure that the product idea can be turned into a viable market offering, the product
concept must be developed into a real product if it passes the business test. However, the issue is
that at this point, R&D and engineering costs result in a significant increase in investment.

One or more physical prototypes of the product concept will be created and tested by the R&D
department. However, depending on the product and prototyping techniques, it may take days,
weeks, months, or even years to develop a good prototype.

Additionally, testing are frequently conducted on items to ensure their effectiveness and safety.
The company may handle this internally or externally.
Marketers frequently use real customers to test their products. Consumers can test out early
versions of products and assess prototypes. In the process of developing the product, their
experiences might be quite helpful.

7- Test Marketing

This phase of the new product development process involves testing the product in actual market
conditions as well as the suggested marketing strategy.

So, before incurring the high cost of complete introduction, test marketing allows the marketer to
get expertise with marketing the product.

In reality, it enables the business to test both the product and the entirety of its marketing plan,
including targeting and positioning, advertising, distribution, packaging, etc., before making a
full investment.

The amount of test marketing required varies depending on the new product. A great amount of
time may be spent on test marketing, particularly when launching a new product that demands a
sizable expenditure, when the risks are high, or when the firm is unsure of the product or its
marketing program.

8- Commercialization

Management now has the information required to make the final decision thanks to test
marketing: Launch the new product, or don’t.

Commercialization is the last step in the process of developing a new product. Simply said,
commercialization is the process of releasing a new product onto the market.

At this stage, the corporation may need to build or rent a manufacturing facility, which may incur
the largest expenditures. In the first year, significant sums may be spent on advertising, sales
promotion, and other marketing initiatives.

Before the product is launched, a few things need to be taken into account:

Introduction timing – If the economy is weak, it can be a good idea to postpone the launch until
the following year. However, the business should seek to launch the new product sooner if
competitors are prepared to launch their own products.

Introduction place – Where should the new product launched? Should it launch in just one place,
a specific area, the national market, or the international market?

Companies frequently lack the confidence, resources, and capacity to launch new products into
wide international distribution right away. Instead, over time, they often establish a planned
market rollout.
A crucial requirement of your product or service’s success is a successful product launch.
Conclusion
The primary goal of each of these stages in the new product development process is to maximise
value for the customer.

The product can only achieve market success after that. As you might expect, only a very small
number of items genuinely have a chance to be a success.

Every product cannot successfully complete the new product development process because the
risks and expenses are simply too great. Given these costs and risks, it is imperative that these 8
steps of the new product development process be completed correctly.

Product Attributes in Marketing | Types | Examples

Table of Contents

 Product Attributes
o Types of Product Attributes
o Example of Product Attributes
 →Brand
 →Product’s Name
 →Product Type
 →Product Images
 →Retail and Cost Prices
 →(Stock Keeping Unit) SKUs
 →Category
 →Weight
 →Barcode
 →Variants
 →Custom attributes
 →SEO fields
 •META Titles
 •META Description
 •META Keyword
 Benefits of Product Attributes?
o
 → For Vendors
 →For Retailers
 Product attributes in Marketing
 Management of Product Attributes
 Product Attributes FAQ
o 1- How Do Product Attributes Influence Marketing Strategy?
o 2- What Is the Difference Between Product Attributes and Product Benefits?
o 3- Why is product attribute important?
o 4- What is the difference between product features and attributes?
Product Attributes
Product attributes are all of a product’s physical and intangible characteristics that fully and
entirely characterize it.

Products, like most things in the universe, have a number of primary qualities that collectively
contribute to their overall functions. Product attributes must be accurate and informative for
marketing purposes.

Product attributes might include:

 Specific product features

 Pricing
 Aesthetics
 Design
 Weight
 Color
 Size
 Ingredients
 Material

Types of Product Attributes

As previously established, a product’s attributes can be:

Tangible: refers to any quality that can be felt via touch and has a physical form. An example
could be all of these attributes of a smartphone let potential buyers’ picture how it would look
and feel in their hands.

Intangible: refers to qualities that cannot be felt through touch and have no physical form. An
example could be the hardware specifications for smartphones which include things like battery
life, internal storage, and screen resolution.

More crucially, product qualities are all the minor details of a product that have an impact on the
consumer’s buying decision.

Therefore, a buyer may be prompted to make a purchase as a result of a product attribute that
directly adds value to them.

The characteristics of the product work together to meet client needs. Understanding product
attributes is crucial since decisions about product development or brand development are always
based on the needs of the customer.

Example of Product Attributes

Below are the examples of product attributes.

→Brand

Brand is just the name of the firm that made the product, but it’s also a useful attribute for
narrowing the selection of products by a particular manufacturer.

→Product’s Name

A product’s name serves as a description and may include information about the manufacturer,
model, and other factors. such as the name, colour, and model “Blue iPhone 14 Plus .”

→Product Type

Product type refers to the categories of goods that your company sells, which are loosely
classified as physical, digital, and services.

→Product Images

Product images are high-quality photos that highlight characteristics like a phone’s size, design,
and screen.

→Retail and Cost Prices

The retail price is what the buyer should pay; it is made up of the product’s cost plus a markup,
which is a percentage added to the price to make it competitive with competing offerings, among
other factors.

→(Stock Keeping Unit) SKUs

SKUs are alphanumeric barcodes that are exclusive to each shop and stand for “Stock Keeping
Unit.” This code can be used to track the movement of inventory and contains details on the
product, its manufacturer, and its cost.

→Category

A category is a collection of products with similar qualities, such as smartphones. Although,

depending on how diverse your selection is, they might be a part of a larger category like
Electronics.

→Weight

Weight is the measurement of an object’s mass in grams or another unit, with or without
packaging. It can be crucial to assess whether a customer feels comfortable handling a product
like a phone. However, it can be important to determine the type of delivery that bigger items
would require.

→Barcode
A barcode (ISBN, UPC, GTIN, etc.) is a two-dimensional code that can be read by an optical
scanner or a tool like Google Lens and carries product information like an SKU.

→Variants

Variants are the various shapes and sizes that a product can take, including case cover color,
clothing size, and memory capacity.

→Custom attributes

Custom attributes are specific product characteristics that are necessary for your choice but
aren’t frequently supplied in data management systems.

→SEO fields

SEO fields are metadata, such as image alt and title, that help online users find your products.

•META Titles

These titles, also known as title tags, are what search engines and website users use to determine
the subject matter of any given page on your website.

You’ll see this text at the top of your browser. The goal of title tags is to be as accurate and
precise as feasible. For users to quickly understand the content of their search result and how it
relates to their query, META Titles are essential.

These must be of good quality because they are frequently the main piece of information visitors
use to pick which information to click on.

•META Description

META Description is an HTML attribute that, in addition to the META Title, provides a brief
summary of your product.

It clarifies the topic of your page to both search engines and users.
The click-through rate greatly depends on the META description. Visitors may click on your link
to inspect your product and learn more about it if your META description is appealing enough.

•META Keyword

Another form of META tag that can be seen in the HTML code of a web page is a META
keyword.

META keyword helps search engines understand the subject matter of your page.

To add value to your content, the keywords you employ must always be pertinent to the
information on your website.
Benefits of Product Attributes?
→ For Vendors

Vendors use product attributes to learn about emerging trends, plan their inventory wisely, and
more quickly spot growth opportunities.

Which model red or the black—sells more quickly? either the smaller or the bigger one?

Your qualities should be created in a way that caters to the increasingly specialized consumer
searches and inquiries that have developed over time.

Marketing professionals must create product descriptions that appeal to the target market’s
interests, with each feature serving as a strong selling point.

→For Retailers

In a crowded e-commerce market, using product features might help your product stand out to
customers.

Managing Product Attributes is essential since it makes your products stand out from those of
competitors. Companies should list the features of their products in a way that is clear to the
average user.

Product attributes in Marketing

Product attributes are crucial components that marketing teams typically use in order to sell
products online. Customers may learn all the details about a product from its qualities rather than
just from looking at a photograph of it on an e-commerce website. So, to summarise, marketing
teams can use the listed product qualities to make a more appealing story about the product.

Lots of market research is necessary to fully comprehend the needs of the target audience in
order to assist design a powerful branding and marketing campaign. Teams can begin to link the
attributes of the product with the needs of the consumer once that data has been gathered.

Management of Product Attributes

It is clear that the product development cycle, as well as all marketing, branding, and sales
initiatives, depend greatly on the product attributes.

A brand needs to manage its product attributes for every product group with extreme care.

The list below includes some suggestions for managing certain product attributes.
List all the attributes – Making a list of all the attributes is the first step in managing product
attributes. Teams will grasp the relative significance of each quality by making a list of them.

Create cross-functional teams – It will take cooperation between various product teams to
extract meaningful value from the knowledge of product attributes. Cross-functional teams can
collaborate to assist with modelling, product development, market research, etc.

Create segments and categorize-Once all the attributes have been listed, teams can go on and
separate them into categories like quality, physical attributes, material attributes, etc.

Gather all the data: Gather all the data and arrange it in a readable document so that all the
teams may refer to it now that you have the segments. The data is organized for teams to quickly
comprehend all of the product’s attributes.

Check out the competitors and product reviews: To improve the current product, the next step
is to research the competition and product reviews.

Considering the features of your competitor’s product can therefore be helpful. To find out about
any problems or client requirements, you can also consult user feedback. By rearranging existing
attributes and adding new ones, a strategy can be created to enhance the current product.

Product Attributes FAQ

1- How Do Product Attributes Influence Marketing Strategy?

Since attributes affect consumer buying choices, they also have an impact on how you should
promote your goods. For instance, to get more attention from the target audience, you may center
your campaigns on your unique attributes.

2- What Is the Difference Between Product Attributes and Product Benefits?

Product attributes are fixed qualities that can be seen clearly from a distance. The list of features
you display can vary based on your target market, brand, or current campaign.

Benefits, on the other hand, are purely subjective observations. These essential characteristics
can differ from one customer or shopper category to another.

3- Why is product attribute important?

Marketers and consumers both value certain product attributes. Since attributes offer benefits
that consumers want when buying a product and comparing it to competing brands, consumers
utilise attributes as the basis for evaluating a product.

4- What is the difference between product features and attributes?

It is product attribute if you can sell it separately from other products. If you can’t sell it
separately, it should called as a feature of the product.

Product Life Cycle (PLC) Stages, Strategies

and Examples
PLC is the pattern of a product’s lifetime profits and sales. Management wants the new product
to live a long and healthy life after it has been introduced.

The company wants to make a respectable profit to recover all the time, money, and danger that
went into developing the product, even though it doesn’t expect it to last forever.

Each product will have a life cycle, although the precise shape and length are not yet known to
management.

There are the four stages that form a product’s life cycle.

1. Introduction
2. Growth
3. Maturity
4. Decline

Product Life Cycle Graph

This S-shaped product life cycle is not followed by all products. Some products are released and
quickly disappear, while others remain in the mature stage for an extremely long time. Some
products reach the decline period, and through strong promotion or repositioning, they switch
back into the growth stage.

Table of Contents

 Introduction
o
 Characteristics of Introduction Stage
 Marketing strategies used in Introduction Stage
 Rapid Skimming
 Slow Skimming
 Rapid Penetration
 Slow Penetration
 Growth
o
 Growth strategies
 Maturity
o Maturity Strategies
  Market Development
 Product Development
 Market Innovation
 Decline
o Decline Strategies
 Product Life-Cycle Characteristics Table
 Product Life-Cycle Objectives and Strategies Table
 Example of Product Life Cycle
o
 Product Life Cycle of Coca Cola
 Benefits of Product Life Cycle

Introduction
When a new product is first introduced, the introduction stage begins. Product is launched in the
market with full scale production and marketing program. In this stage sales grow at very low
rate because the product is not in the demand.

Before they began to experience rapid growth, well-known products like instant coffee, personal
computers, and cell phones remained on the market for many years.

Due to the low sales and expensive distribution and promotion costs, this stage’s profits are
negative or poor when compared to other stages.

To attract distributors and increase their stocks, a lot of money is required. To get consumers to
try a new product and learn about it, comparatively large amounts of money are spent on
promotions.

The company and its few competitors offer basic versions of the product because the market is
typically not prepared for continuous improvement at this point.

Characteristics of Introduction Stage

 Low and slow sales

 High product price
 Heavy promotional expenses
 Lack of knowledge
 Low Profits
 Narrow product lines

Marketing strategies used in Introduction Stage

One of many marketing approaches may be used by a business to launch a new product. Each
marketing variable, such as price, advertising, distribution, and product quality, can be set to a
high or low level.
Following are the marketing strategies that can be used in the introduction stage.

Rapid Skimming

Launching the product at a high price and high promotional level.

In the early stages of a new product’s launch, a high price, high promotion strategy aids the
company in rapid skimming the price-insensitive end of the market.

Slow Skimming

Launching the product at a high price and low promotional level.

Companies may offer the new product with a high price and low promotion spending in order to
slowly skim the market.

Because of the low promotion spending, marketing expenses are kept to a minimum while the
high price helps in recovering as much gross profit per unit as possible.

Such a strategy works sense when the market is small, the majority of customers are
knowledgeable about the product and eager to pay a high price (these customers are often
referred to as the “innovators”), and there is little immediate or possible competition.

Rapid Penetration

Launching the product at a low price with high promotion

A business may launch a new product with a low pricing and strong promotional expenses.

This strategy offers the fastest market penetration and the highest market share, as the market is
large, potential buyers are price sensitive and unfamiliar of the product.

There is strong potential competition, and the company’s unit manufacturing costs fall as
production scale and manufacturing experience increases.

Slow Penetration

Launching the product at a low price and low promotion.

If consumers are price conscious yet the company needs to keep its launch costs low due to
resource limitations, it may opt for a cheap price but low promotion spend option instead.

Growth
Once market has accepted the product, sales begin to rise.
The new product will enter a growth stage, during which sales will start rapidly increasing, if it
fulfils market need or generates previously unmet demands.

Early adopters will keep purchasing, and subsequent consumers will begin to do the same,
particularly if they hear positive word of mouth.

New rivals will enter the market drawn by the chances for financial gain. They will expand the
product’s market, add new product features.

The number of distribution channels rises as a result of increased competition, and sales increase
solely to fill reseller inventories. Prices either stay the same or only slightly decrease.

Companies maintain or slightly increase their spending on promotions.

Profits rise during the growth stage as unit manufacturing costs decline and promotion costs are
spread over a large volume.

 Rapid increase in sales

 Product Improvements
 Increase in profits
 Increase in competition
 Reduction in price
 Strengthening the distribution channel

Growth strategies

The primary goal of marketing strategies utilized during the growth stage is to boost profits. The
following are some strategies to try:

 lowers prices to attract more customers.

 enters new market segments
 adds new product features and models
 improves product quality
 grow sales by selling through new distribution channels
 shifting advertising message from product awareness to product preference and purchase

Maturity
A product will eventually reach a point of maturity when its sales growth slows.

This stage of maturity typically lasts longer than the other stages and presents significant
difficulties for marketing management.

Since most products are in this stage of their life cycles, the majority of marketing management
activities center on mature products.
Due to the slowdown in sales growth, there are numerous producers and a large number of
products. This excess capacity then increases competition. In order to develop better versions of
the product, competitors start to reduce prices, expand their advertising and sale activities, and
increase their R & D spending.

These actions result in a decline in earnings. The lesser competitors frequently begin to fall
behind and finally leave the market, leaving only the more well-established competitors.

Even while many mature products seem to remain unchanged for extended periods of time, the
most successful ones survive by constantly adapting to meet shifting consumer needs.

 Sales increasing at decreasing rate

 Normal promotional expenses
 Uniform and lower prices
 Product modifications
 Profit margin decreases

Maturity Strategies

Following are the marketing strategies that can be used in the maturity stage.

 Market Development
 Product Development
 Market Innovation

Market Development

Here, the business aims to boost the use of the current product. It searches for new users or
market segments that the business isn’t currently serving.

Companies enters new market segments, redefining target consumers, converting non-users.

Product Development

The companies alter or improve product’s features, quality, pricing, and differentiating it from
competing products in the market.

To draw in new customers and encourage increased usage, the product manager may also alter th
e product’s qualities, features, or style.

The product’s performance and quality might be enhanced, including its speed, flavour, dependa
bility, and durability.

It could also include additional features that increase the product’s use, safety, or convenience.
Market Innovation

By altering one or more components of the marketing mix, marketers might also strive to
increase sales.

Price reductions draw in new users and clients from other businesses. They can start a more
effective advertising campaign or employ forceful sales promotions, such as trade offers,
discounts, premiums, and competitions.

If these channels are expanding, the business can also enter broader market segments. Finally,
the business can provide customers with even more value by introducing new or upgraded
services.

Decline
In decline stage, actual sales begin to fall under the new product competition and changing
consumer behavior.

Most product types and brands eventually see a decline in sales. The decline could be slow or
quick. Sales could decline to zero or to a low level where they stay for several years.

Sales are declining for a variety of factors, including changes in consumer preferences,
technology advancements, and heightened competition.

Some businesses leave the die market as sales and revenues fall. Carrying a poor product may
cost a company significantly, and not just financially.

 Decrease in price
 No promotional expenses
 Suspension of product work
 Sales decline
 changes in consumer preferences
 Increase in competition

Decline Strategies

Following are the marketing strategies that can be used by firms in the decline stage.

 Keep the product in production and wait for rivals to leave the market first
 harvest the product
 Cut the costs ( plant and equipment, maintenance, R & D, advertising, sales force )
 drop the product from the line

Product Life-Cycle Characteristics Table

Characteristics Introductio Growth Maturity Decline
n
Sales Low sales Sales increases Peak sales Sales decline
rapidly
Costs High cost Average cost Low cost Low cost
Profits Negative Rising profits High profits profits decline
Customers Innovators Early adopters Middle majority Laggards
Competitors Few Competitors Stable competition Competitors
grow starts to decline Decline

Product Life-Cycle Objectives and Strategies Table

Introduction Growth Maturity Decline
Marketing Create product Maximize’ Maximize Reduce
Objectives awareness market share profit expenditure and
while milk the brand
defending
market share
Product Offer a basic Offer Diversify Phase out
product product brand and weak
extensions, products products
service,
warranty
Price Use cost-plus Price to price to
penetrate match or Cut price
market beat
competitors
Distribution Build selective Build Build more Go selective
distribution intensive intensive
distribution distribution
Advertising Build product Build Stress brand phase out
awareness among awareness differences unprofitable outlets
early adopters and interest and Reduce to level
and dealers in benefits needed to retain
the mass hard-core loyals
market
Sales Use heavy sales Reduce to Increase to Reduce to
Promotion promotion to attract take encourage minimal level
customers advantage of brand
heavy switching
consumer
demand
Product Positioning | Positioning Strategies |
Examples
Businesses use marketing to let customers know where they stand in the market and to shape
how they view their products and services.

The brand identity is established through marketing, which also affects how customers see the
brand in relation to alternatives offered by competitors.

Table of Contents

 Product Positioning
 Process of Product Positioning
o
 Examples of Product Positioning
o Positioning Strategies
 Price-based positioning
 Example of Price based positioning
 Quality based positioning
 Example of Quality based positioning
 Variety-based positioning
 Example of Variety-based positioning
 Competitor-based positioning
 Performance product positioning
 Example of Performance product positioning
 Advantages of Product positioning
 What is product positioning used for?
 What are the 4 main components of product positioning?

Product Positioning
Product Positioning is the image that a produce in the mind of customers in comparison to the
competitor’s products and also in comparison to other products of the same company.

Positioning is the act of designing the company’s offering and image to make a distinctive place
in the mind of the target market or consumer.

Process of Product Positioning

1. Analyze the consumer’s perceptions in relation to competitors.
2. Identify competitor’s positions.
3. Find out consumer preferences.
4. Select the position for the product.
5. Monitor the positioning Strategy.
Examples of Product Positioning

The best watch in the world is considered to be a Rolex.

The biggest soft drink firm in the world is Coca-Cola.

One of the best sports cars in the world is considered to be a Porsche.

These businesses hold those positions, making it difficult for a rival to steal them.

We’ve already provided a few examples of product positioning, but let’s take a closer look at one
very well-known brand’s positioning.

One of the most well-known companies in the world, Nike is known for creating competitive
sportswear for all consumers (not just elite athletes).

Nike presents itself as a firm that offers top-notch, stylish clothes to athletes from all walks of
life, rather than just as a manufacturer of shoes and athletic wear.

Even more, these items deliver under the most trying circumstances and motivate sportsmen to
perform at their best.

Positioning Strategies

Price-based positioning

Offering your products at a competitive or lower price than your competitors is known as price-
based positioning. And most frequently, people choose these products exclusively on the basis of
price, without weighing or contrasting the alternatives.

Example of Price based positioning

The grocery store is the clearest example of price-based positioning since there, discounts enable
companies to directly compete on price savings.

Quality based positioning

Quality based positioning refers to the practice of brands using greater price to imply a product
of superior quality or status while avoiding price competition.

The focus of a quality-based product positioning strategy is on the product’s quality as its main
selling point. This kind of position is frequently used by organisations because it can apply to
both products and services.

When highlighting quality, businesses frequently contrast it with the quality of a rival who offers
a comparable product.
Example of Quality based positioning

Rolex has dominated the luxury watch industry and will continue to do so.

Variety-based positioning

The variety of products the brand offers is primarily the focus of this kind of product positioning.
The audience will be aware of their variety of options in this way.

The brand may contrast the variety offered by its competitors with the variety offered by its
product to demonstrate that the company offers a wide variety with the product.

A company may compare how many products they have to those of its competitors to highlight
the huge variety they provide, or they may highlight how each of their products are unique and
different from the others.

Example of Variety-based positioning

No one provides a wider range than we do. There is a different ice cream flavor for every
occasion, with over 15+ options ranging from honey butter pecan to mint agave. So that you can
have as much ice cream as you want, whenever you want, get yours in a range of sizes.

Competitor-based positioning

Utilizing alternatives offered by competitor brands helps to distinguish products and showcase
their benefits. It aids companies in differentiating their products and showcasing their
uniqueness.

Performance product positioning

Performance-based product positioning places a strong emphasis on a product’s performance.

This kind of approach is more interested in how something works than in how something looks.

Although it can also apply to a digital product, performance positioning is most often used with
physical products.

Even though performance positioning marketing frequently highlights how its product is the top
performing one on the market, it may or may not draw direct comparisons to similar competitors.

Example of Performance product positioning

voted three years in a row as the computer brand with the best performance. With our newest PC
model, the Aero 2000, the highest-rated HD i10 core processor notebook currently on the
market, you can satisfy all of your computing needs. Enjoy its unparalleled style and
performance.
Advantages of Product positioning
We’ve listed the top advantages of product positioning to illustrate why it’s one of the most
successful marketing strategies.

 Finding a competitive advantage in a changing market.

 Meeting customer expectations.
 Reaffirming your brand’s name and its products.
 Gaining customer loyalty.
 Developing an effective promotional strategy.
 Attracting new customers.
 Boosting competitive strength.
 Launching new products.
 Showcasing new features of existing products
 Aligning product’s key benefits with customers’ needs.

What is product positioning used for?

A product’s or service’s positioning describes how it addresses a certain need, want, or desire
that the target market is missing. it’s a crucial component of marketing because it establishes
and clarifies a company’s goals while highlighting how its brand stands apart from similar
competitors.

What are the 4 main components of product positioning?

 Identification of the target market and comprehension of its needs, desires, and preferen
ces.
 Creating a USP (unique selling proposition)
that distinctly separates the product from its rivals.
 Developing a brand identity that appeals to the target audience and fosters loyalty.
 Creating a communication strategy that successfully communicates the brand’s message
.

Market Segmentation | Types, Benefits of

Segmentation
We will discover what market segmentation is in this post and how it enables you to successfully
target the right audience with your marketing efforts to ensure the success of your company.

Targeting the right market with the right message is crucial when trying to reach customers
through marketing messages or advertising campaigns. If you aim too broadly, your message
may reach a small number of people who end up becoming customers, but it will also likely
reach a large number of people who have no interest in your goods or services. You’ll waste a lot
of money on advertising if your messaging isn’t tailored to your audience.

By using market segmentation, you can focus your advertising on the people who are most likely
to become loyal clients or enthusiastic consumers of your material. You divide a market into
groups that share similar traits to segment it. A segment can be based on one or more
characteristics. By segmenting an audience in this way, customized content and more precise
targeted marketing are made possible.

Your target audiences and ideal consumers can be defined and understood more clearly with the
aid of market segmentation. Being able to identify the ideal market for your products can help
marketers better target their advertising. Publishers can similarly tailor their content for various
audience segments and offer more accurately targeted advertising opportunities by using market
segmentation.

Table of Contents

 Market Segmentation
o Bases for Segmentation
o 1. Geographic Segmentation
o 2. Demographic Segmentation
 ▶ Age
 Example
 ▶ Gender
 Example
 ▶ Income
o 3. Psychographic Segmentation
 ▶ Social class
 ▶ Lifestyle
 ▶ Personality
o 4. Behavioral Segmentation
 ▶ Opinions, interest and hobbies
 ▶ Degree of loyalty
 ▶ Occasions
 Example
 ▶ Benefits of sought
 Example
 ▶ Usage
 Requirements for Effective Segmentation:
o

 → Measurability:
 → Accessibility:
 → Substantiality:
 → Actionability:
 → Differentiable:
  Benefits of Market Segmentation
o
 ✔ Build better products
 ✔ Better marketing ROI
 ✔ Lower customer acquisition costs
 ✔Reach out to new markets
 ✔Create a loyal customer base.
 ✔ Establish an omnichannel approach

Market Segmentation
Market segmentation is the process of dividing a market into separate groups of consumers with
varying wants, traits, and behaviors who may require different goods or marketing strategies.
The business determines various market segmentation strategies and creates profiles of the
resulting market segments.

The process of market segmentation divides the target market into smaller groups based on
shared features like age, income, personality traits, behavior, interests, needs, or location.

These segments can be used to enhance sales, marketing, and other related activities.

Due to segmentation, brands can develop strategies for various consumer types based on how
they view the overall value of different products and services. They can introduce a more
customized message in this way with confidence that it will be well-received.

1. Identify segmentation bases and segment the market.

2. Develop profiles of resulting segments.

Bases for Segmentation

A market for a product can be segment using several bases.

1. Geographic Segmentation
2. Demographic Segmentation
3. Psychographic Segmentation
4. Behavioral Segmentation

1. Geographic Segmentation

It tries to divide markets into different geographical units.

 Regions by continents, country, state, neighborhood

 Size of area segmented according to size of population
 Population density urban, suburban or rural
 Climate
A business may choose to operate in one or a few geographical locations, or it may choose to
operate everywhere while taking into account geographical differences in needs and wants.

Marketer who operate globally often segment the market by continents/ country / region in the
first instance and then go for segmentation on other bases.

National markets within country often segment the markets by region, state, district, urban / rural
area in first instance and then go for segmentation on other bases.

2. Demographic Segmentation

Demographic Segmentation consists of dividing the market into groups based on variables such
as

 Age (Infants, Child Market, Teen Market, Youth Market, Elders Market)
 Gender ( Male, Female )
 Income
 Social class ( Upper class, Middle class, Lower class )
 Lifestyle

The most common bases for segmenting consumer groups is based on demographic factors
because consumer needs, wants and usage rates often vary closely with demographic variables.
Another reason is that compared to most other types of variables, demographic variables are
simpler to measure.

▶ Age

Marketers design, package and promote products differently to meet the wants of different age
groups.

Example

McDonald’s uses many advertisements and media to reach children, teenagers, adults, and senior
citizens. While the advertisements for senior residents are softer and more emotional, the
advertisements for youth have dance beat music, action, and quick cuts between scenes.

Toys age-based segments.

▶ Gender

Clothing, haircare, cosmetics, and perfumes frequently segment their audiences by gender.

Example

For instance, most deodorant brands are used by both men and women. To counter this, Procter
& Gamble created Secret as a line specifically tailored for a woman’s chemistry. The company
then packaged and sold the product to further support the feminine stereotype. In contrast,
Gillette’s deodorant is targeted toward men due to its association with shaving.

▶ Income

Consumers perceived social class influences their preferences for cars, clothes, home,
furnishings, leisure activities.

Many businesses offer luxury items and convenient services to elite customers.

3. Psychographic Segmentation

It groups customers according to their social class, lifestyle and buying psychology.

 Activities
 Interest
 Opinion
 Values

Many businesses offer products based on the attitudes, beliefs and emotions of their target
market.

Knowledge of lifestyle indicate whether a person is interested in outdoor, sports, shopping,

culture or reading.

The desire for status enhanced appearance and more money are examples of psychographic
variables. These are the factors that influence your customer’s purchasing decision.

▶ Social class

They have an impact on consumer preferences for automobiles, clothing, home décor, leisure
activities, reading habits, and stores.

Many businesses create goods or services with features that appeal to particular social classes in
mind.

▶ Lifestyle

Lifestyle choices have an impact on people’s interest in products. Conversely, the products
people purchase reflect their lifestyles.
Marketers are progressively dividing their consumer base into several lifestyle segments.

▶ Personality

Marketers have also employed personality traits to divide up markets and give their goods
personalities that match those of their target audiences.
For products like cosmetics, cigarettes, and insurance, personality-based market segmentation
tactics are effective.

4. Behavioral Segmentation

The customer can also be divided into certain segments on the basis of their knowledge, attitude,
use or response to a product.

 Opinions, interest and hobbies

 Degree of loyalty
 Occasions
 Benefits of sought
 Usage

▶ Opinions, interest and hobbies

It includes consumer’s optical opinions views on environment, sporting, recreational activities,

arts and cultural issues.

▶ Degree of loyalty

Nowadays, a lot of businesses use loyalty schemes to segment their markets based on customer
loyalty. They assume that some customers are truly loyal and continuously purchase the same
brand.

Others are more indifferent; they favour one brand while occasionally purchasing others, or they
are devoted to two or three brands of a certain product.

Others consumers still don’t display any brand loyalty. They either always purchase a brand that
is on sale, or they want something different every time they shop.

Marketers typically divide consumers into groups based on how loyal they are to their goods or
services, then they concentrate on the most profitable loyal customer.

▶ Occasions

This segments the product on the basis of when a product is purchased and consumed for
example products consumed on marriages, festival or other occasions.

Example

Segmenting by occasion might aid businesses in increasing product usage. The promotion of
Mother’s Day and Father’s Day boosts sales of candy, flowers, cards, and other gifts.

▶ Benefits of sought
This requires marketers to identify and understand the main benefits consumers look for in a
product.

Grouping customers based on the various benefits they expect from the product is a highly
effective kind of segmentation.

Finding the primary benefits consumers in the product class search for, the types of consumers
who look for each benefit, and the major brands that provide each benefit are necessary for
benefit segmentation.
In general, businesses can use benefit segmentation to describe their brand’s key characteristics
and contrast it with rival brands, as well as to explain why customers should buy their product.
They might also look for fresh advantages and introduce brands that offer them.

Example

Colgate — White teeth stops bad breath.

▶ Usage

In some markets, there are also segments for light, medium, and heavy users. Even though they
make up a small percentage of the market, heavy users frequently make up a large portion of all
purchases.

Requirements for Effective Segmentation:

Measurable, accessible, substantial, differentiable, and actionable segments are necessary for
effective segmentation.

A business has a better chance of long-term success and increased profitability when it has
appropriately segmented its market.

Establishing the criteria for efficient market segmentation enables businesses to establish
marketing strategies that are vital to their growth and development.

The five requirements for efficient market segmentation are as follows:

→ Measurability:

The extent to which a market segment’s size, purchasing power, and profits can be calculated.

→ Accessibility:

How easily a market segment can be reached and served to.

→ Substantiality:
The extent to which a market segment is large enough or profitable.

→ Actionability:

The degree to which effective programs can be designed or attracting and serving a given market
segment.

→ Differentiable:

Make sure that different target markets react differently to various marketing strategies before
segmenting the market. This might not be a big deal if a company just caters to one market
segment.

Benefits of Market Segmentation

The top advantages of market segmentation are as follows.

✔ Build better products

You can make products that better meet your consumers’ requirements, wants, and expectations i
f you have a deeper grasp of who they are.

✔ Better marketing ROI

Research indicates that segmented, targeted, and triggered campaigns account for 77% of market
ing ROI.

✔ Lower customer acquisition costs

Your marketing campaigns will be more successful as a result of the knowledge you gain from d
eveloping segmented customer personas.

Both D2C and B2B brands fall under this statement.

For instance, after refining its sales process to take into account the habits and attitudes of each c
ustomer segment, the world’s largest insurance company, Metlife, set yearly savings goals of $80
0 million.

✔Reach out to new markets

Brands can find market gaps by segmenting their target audiences. For instance, the camera mak
er Canon saw an opportunity to sell cameras to kids who didn’t have smartphones and seized 40
% of the low-end digital camera market.

✔Create a loyal customer base.

You may create the personalized journeys your customers want with the aid of market segmentat
ion.

79% of consumers are more loyal to brands that employ personalization strategies, according to
Accenture.

✔ Establish an omnichannel approach

You may develop an omnichannel strategy that better serves the demands of your customers with
the support of the comprehensive data you gain from a solid market segmentation approach.

For instance, if a large portion of your clientele is from Generation Z, make sure your messaging
is tailored to their cultural and social reference points across all channels.

The 5-Step process for strategic marketing

planning | PPT
Strategic marketing planning is a process that any business can use to create a comprehensive,
integrated, and cohesive marketing plan. By taking the time to develop a strategic marketing plan,
businesses can ensure that all of their marketing efforts are working together to achieve their overall
objectives.

Table of Contents

 Strategic Planning
o 5-Step process for Strategic Marketing Planning
 1- Mission and objectives
 2- Environmental Scanning
 External Factors
 Internal Factors
 SWOT Analysis
 3- Strategy Formulation
 4- Strategy Implementation
 5- Evaluation and Control
 Conclusion

Strategic Planning
It is an organization’s process of defining its strategy or direction and making decisions on
allocating its recourses to pursue this strategy.

Strategic Planning is an art of formulating business strategies, implementing them and evaluating
their impact based on organizational objectives.
Strategic Planning is the process of setting goals, identifying and making decisions on how best
to achieve them. It is a fundamental tool for any organization, business.

5-Step process for Strategic Marketing Planning

Strategic Marketing Planning involves these five steps.

1- Mission and objectives

2- Environmental Scanning

3- Strategy Formulation

4- Strategy Implementation

5- Control and Evaluation

1- Mission and objectives

The first step in the strategic planning process is to identify the organization’s mission and
vision. This is a brief statement that defines what the company plans to achieve.

The mission is the reason for the organization’s existence.

What it does and Why it exists ?

The vision is the long-term goal of where the organization wants to be.

Mission and vision describes the purpose and direction of the organiztion

Corporate Objectives are organization’s goal in which firms leaders define financial and strategic
objectives.

. The objectives are specific goals that support the mission statement and help the company
achieve its goals.

Some objectives might include increasing market share, launching new products, entering new
markets, or increasing brand awareness. To develop effective objectives, businesses need to
understand their target market, their competition, and their own strengths and weaknesses. Only
then can they set realistic and achievable goals.

2- Environmental Scanning
Once the mission and vision are established, the next step is to assess the current situation. This
includes looking at both internal and external factors that may impact the organization’s ability
to achieve its goals.

Environmental scanning is a critical task for businesses. By keeping abreast of current and future trends,
businesses can make informed decisions about where to allocate resources in order to best take
advantage of opportunities and minimize threats.

External Factors

External Factors are those factors that don’t have immediate impact on the performance and
cannot be controlled by the organization. For Example Legislation

Techniques used: PESTLE, Opportunities , Threats

Internal Factors

Internal Factors are key factors and capabilities of an organization’s recourses , departments,
products, services finance etc. For Example Marketing

Techniques used: Portfolio Analysis ( BCG ) , Financial Analysis, Marketing Audit

By taking the time to periodically scan their environment, businesses can stay ahead of the curve
and make strategic decisions that will help them remain competitive.

SWOT Analysis

SWOT is the scan of internal and external environment which is an important part of strategic
planning process

It includes environmental factors that are internal to the firm that is strength (S) or weakness (W)
and those factors that are external to the firm that can be classified as Threats (T) or
Opportunities (O).

A SWOT analysis is a tool that can be used to assess a company’s competitive position. The analysis
involves four key areas: strengths, weaknesses, opportunities, and threats.

Strengths are internal factors that give a company an advantage over its competitors.

Weaknesses are internal factors that put a company at a disadvantage relative to its competitors.

Opportunities are external factors that present themselves as potential areas for growth or
expansion for the company.

Threats are external factors that could negatively impact the company’s business model or
competitive position.
 Strengths Weaknesses

✔ Strong brand names ❌ Weak brand names

✔ Good Reputation among customers ❌ Poor Reputation among customers
✔ Access to High Quality natural ❌ Lack of access to High Quality natural
recourses recourses
✔ Favorable Access to distribution ❌ Lack of access to distribution networks
networks
Opportunities Threats

✔ Unfulfilled customer need ❌ Emergence of competitors

✔ arrival of new technologies ❌ Emergence of substitute products
✔ removal of international trade barriers ❌ New regulations
✔ loosening of regulations ❌ Increased trade barriers

The goal of a SWOT analysis is to help companies identify potential areas of improvement and make
informed decisions about where to focus their resources.

3- Strategy Formulation

Given information rom the environmental scan, the firm should match its strengths to the
opportunities that it has identifies while addressing its weaknesses and external threats.

Strategy formulation is the process of developing a company’s marketing and business plans. It
includes the identification of opportunities and threats, the selection of appropriate strategies.

Marketing strategy formulation is the core of marketing planning. A marketing strategy is a set
of goals, guidelines, and regulations that direct the company’s long-term marketing initiatives.

Simply put, marketing strategy is the entire, unbeatable plan created especially for reaching the
firm’s marketing objectives. The marketing objectives set forth what the firm hopes to
accomplish, and the marketing strategy offers the method for doing so.

4- Strategy Implementation

The selected strategy is implemented by means of programs and procedures. Implementation

involves organization of firm’s recourses and motivation of staff to achieve objectives.

The specific functional strategies will flow from and be in line with the company’s marketing goals and
marketing plan. If the intricate functional plans are created carelessly, even the strongest marketing
strategy could fail in the marketplace. It can be necessary to create a plan for each marketing function.

5- Evaluation and Control

The implementation of the strategy must be monitored and adjustments should be made as
needed.

The business must continuously check to see if everything is operating according to plan. If this control
point isn’t present, it won’t be feasible to evaluate successes or failures or identify and address the
strategy’s weak areas. Going back to Step 1 again, may be necessary if revisions are needed.

Conclusion
As the world of marketing changes, so do the strategies that businesses use to reach their target
audiences. While some companies are content to stick with tried-and-true marketing methods,
others are always looking for the latest and greatest way to get their name out there.

Creating a strategic marketing plan is the first step to ensuring that your marketing efforts are effective
and efficient. Without a plan, it’s easy to waste time and money on tactics that don’t work or don’t fit
your overall goals. But with a solid plan in place, you can make the most of your marketing budget and
make sure that every dollar you spend is working toward your bottom line.

What is New Product Development (NPD)?

New product development is the process of converting an idea into a workable software product.

The New Product Development (NPD) process is about grabbing the market opportunity that
revolves around customer needs, checking the idea’s feasibility, and delivering working
software.

On the other hand, Product Development is an umbrella term that sticks to the six stages of
software development lifecycle and works on launching products that already have a Proof of
Concept (POC). The New Product Development approach revolves around working on an
entirely new idea, where the uncertainty around its development and subsequent adoption is
high.

Some of the successful New Product Development examples include — Trello for task
management and tracking, Zoom for video communication, Dropbox for cloud storage, Figma
for designers working remotely, Airtable for relational data management, and so on.

Here is an insight into each of these stages for understanding how to develop a new product:

Seven Stages of New Product Life Cycle Development

Process
Building new products and services can be a process filled with uncertainty. However, following
the systematic New Product Development process can help businesses gain clarity and
confidence in what they are building.

Stage 1: Idea Generation

The goal should be to generate many worthy ideas that can form the foundation for the New
Product Development strategy. The major focus for stage 1 should be to arrange brainstorming
sessions where solving customer problems is given precedence.

This phase is not about generating foolproof ideas that are ready for implementation. Instead,
raw and unproven ideas that can be shortlisted later should be discussed.

Here’s how a business can do that:

1. Emphasize on Customer Problems

The problem that is well described is a problem half-solved. Here’s how to identify the issues
that the target audience is facing:

a. Personal Problems

It is a good idea to look at problems the business is facing to come up with the idea. All a
business needs to focus on that specific problem and build a solution that can be tagged as a “one
for all” solution to the common problem.

To start with, a business needs to understand the human story behind digital offerings.

For instance, Jeff Lawson, the founder of Twilio, has an interesting story behind its
communication-based software product launch.

He was associated with three business companies in the past, and all of them lacked one thing —
Productivity.

When he was driven to start again with something of his own, he knew that he needed to cover
up the communication gaps as these were, in his experience, the biggest hurdles on the path to
productivity.

That is when product innovation happened in the form of Twilio. The product building and
launching had their ups and downs, but his conviction to have this product led to a great business
idea.

Here is an inspiring extract of his speech from the Web Summit.

b. Qualify Each of the Listed Problems

This step helps check the feasibility of the shortlisted problems and their solutions based on the
4U approach by Michael Skok, the founder of Startup Secrets. The 4U stands for:

aking a deeper look at each of these aspects in detail will provide greater clarity.

 Unworkable: Figure out whether the brainstormed product concepts will address some
real problems. Will the product be able to fill the existing customer experience gaps and
will the product achieve product-market fit?
 Unavoidable: Is the problem the product will address unavoidable to the extent that it
becomes mandatory to comply? It is necessary to find out whether solving that problem is
a choice or a compulsion.
 Urgent: Is the problem urgent and is a solution highly demanded by the target market? If
the answer is affirmative, this could be a chance to cover the white space in the market
with the original product.
 Underserved: Are there no available products that address the existing user problems?
Look for the whitespace in the market and hold on to the idea that looks promising.

c. Coming Up With Possible Solutions

If a problem has been identified, it’s time to look for possible solutions. For every user problem,
there ought to be potential New Product Development opportunities.

Here’s the workflow that starts with a problem and ends with strategizing around the solution.

In all, no matter how common or uncommon the problem is, the solution should be unique. Even
if a product already exists, ensure that the product can solve problems differently.

For instance, Slack and Zoom are both SaaS products that focus on promoting communication
and collaboration. Zoom, however, does this differently by also enabling the conducting of
webinars. In other words, webinars are their unique selling point (USP).

d. Narrowing Down Problems + Solutions

Create a comparison chart that lists all the shortlisted problems and solutions. Circulate the
findings across the organizational structure to develop a viable problem set.

If the stakeholders are not convinced regarding the shortlisted idea, try the Replicate, Re-
Purpose, and Upgrade approach.

 Replicate: This focuses on creating a similar product as that of a competitor but

launching it in new market conditions. When done with launching the minimum viable
product (MVP), the strategy should be to expand the business by introducing out-of-the-
box and unique features later on.
 Re-Purpose: This focuses on rewiring an existing business model. For instance,
LinkedIn introduced LinkedIn Learning, an e-learning platform for professionals. This
 product was similar to an e-learning platform for students. However, they built new
opportunities for expanding the target audience and market share.
 Upgrading: This concept of New Product Development revolves around introducing a
new business model that is better than existing solutions. Better could mean improved
performance, better speed, addressing the challenges that a competitor is facing, or
introducing added functionalities.

Stage 2: Idea Screening

This New Product Development stage revolves around choosing the one idea with the highest
potential for success. Put all the ideas available on the table for internal review. That is, turn to
people with industry knowledge and experience in the field for idea screening.

A proof of concept (POC) should hold precedence for a new product development idea as it
helps check the idea’s feasibility. There is no point in zeroing in on an idea that is not technically
feasible to build.

Consult the Agile Development team. Their expertise can help with understanding the technical
side of things, which, in turn, can assist with shortlisting ideas worth building a PoC for.

SWOT ( Strengths, Weaknesses, Opportunities, and Threats) analysis can be another good
practice to consider when shortlisting New Product Development ideas.

In a SWOT analysis, the Agile Development team, the product owner, the scrum master, and the
product manager conduct a detailed analysis of the idea to identify an idea where strengths and
opportunities overpower threats and weaknesses.

Conducting a SWOT is relatively simple. Getting started only requires a simple 2×2 grid:

In conclusion, the New Product Development idea should be unique so that people do not need
to be convinced to pay for it.

Stage 3: Concept Development & Testing

Before starting the New Product Development process, building a detailed version of the idea
and the user stories should be prioritized.

This value proposition evaluation is the first step towards concept development and testing. At
the very least, it ensures that problems in the approach are discovered sooner and the team can
course-correct earlier. That helps to ensure that technical debts will not accumulate.

There is a 17% chance that [your] startup’s idea fails, just because it was a poor product. — CBI
Insights

The easy-to-follow concept development steps include:

1. Quantifying Gain/Pain Ratio

A business needs to create an insightful picture of the product from the user’s perspective. This
can be achieved by calculating the gain/pain ratio, where:

Gain = Benefits of the product for the customer. What is in it for them?

Pain = The efforts made by the customer to understand and use the product.

2. Conducting a Competitor Analysis

Knowing about existing market players is a critical strategic step to consider. Understanding the
competition makes it easier to infer:

 Where the competitor lacks

 Where is the scope for improvement
 Existing white space in the market

3. Enlisting the Major Product Features

The user stories involved in the New Product Development software project will make or break a
business. When creating a list of such features, it is imperative to know — how is it an
innovative feature, and how is it going to solve a problem?

4. Create a Value Proposition Chart

Even after being convinced of the wisdom & the utility of an idea, being able to state it clearly to
the end-user, in their context, is quite a different story altogether. The end-user needs to be given
a clear picture of what the new product is capable of doing.

This clean & presentable fashion can be best represented in the form of a value proposition chart.
The format of which should include:

5. Concept Testing

Once the value proposition is ready, it is time to present it to the set of selected customers. How
they perceive the idea is the test of the efforts so far. If the idea doesn’t look promising, it is wise
to repeat the idea screening steps to develop a new product.

Meaningful insight can be gained by focusing on four critical aspects:

 Identification of the focus group, i.e., people who would benefit from the new product
under development.
 Assessment of other alternatives that can be presented to the focus group.
 Development of a foolproof plan for the New Product Development that includes all
stages from feature development, marketing, pricing, and distribution.
  Positioning of the product’s unique features into the customers’ minds to enhance
findability and discoverability.

The concept testing report would look something like this

Stage 4: Market Strategy/Business Analysis

Marketing strategy is all about drafting a way to reach out to the targeted audience. Perhaps the
best and most straightforward method is to follow McCarthy’s 4Ps of marketing for a New
Product Development project.

Category Meaning Purpose

Product Finalizing the software product based on the Product Design
concept testing report
Branding Strategy

Level of services offered

Price Strategizing around product licensing cost, Pricing Strategy
estimating profit margins, and creating an
unbeatable marketing strategy Discounting Policies

Payment Modes
Promotion Distinguishing the new solution from others Balancing advertising,
by highlighting the hero point or unique marketing, and public relations
feature strategy

The mediums to reach out to the

target audience

Maintaining a fair to-and-fro

customer communication
frequency limit
Placement Communicating how it solves the key Finalizing product distribution
problems of the customer strategies

Defining the product’s scope,

i.e., local vs Global

This business analysis will help to determine whether the New Product Development efforts are
worth the financial investment or not (i.e., will it create a continuous stream of value)?

It is important to strategize in an informed way about the selling price by identifying the base
price of the product. The best way to identify the base price is:

1. Cost-Based Pricing Model

Here, the initial production cost is added to the markup percentage to come up with the new
product’s final price.

Applying the cost-plus pricing formula:

 Production cost = Technology cost + development cost + licensing cost = $100

 Markup% = 50%
 Price = $150

If a business analysis team applies the psychological price trick (i.e., ending the final price with 5
or 9 digits) chances of conversions increase.

So, if the psychological pricing is to play, the $150 price will become $149.9.

2. Market-Focused Pricing

This pricing is inferred after a thorough analysis of the pricing model of similar products in the
target market.

The market-oriented pricing follows the trajectory:

The factors to consider when selecting a competitive price:

 Price Above Market: A higher price is suitable when proceeding with New Product
Development initiatives that solve an urgent problem of the customers.
 Copy Market: Selling the new product at the same price as the competitors can initially
be a safer move. However, marketing efforts would have to be ramped up to score better
than the competitor.
 Price Below Market: A lower price bracket than the competitor is recommended to
attract customers that can be converted into loyal ones over time, even if the new product
solves things differently.

Stage 5: Product Development

When the New Product Development idea is in place, the market strategy is documented, and the
business analysis is completed, it is time to move on with the product life-cycle development
process.

The New Product Development starts with developing the prototype followed by MVP.

1. Prototype
This focuses on creating the UI/UX for the product, which is then shared with the stakeholders.
This helps in visualizing how the product will look and whether it complies with ergonomics
best practices.

2. Minimum Viable Product (MVP)

This focuses on working on the user stories in Agile for the New Product that will set it apart
from others. Once the design, development, and testing are done, the MVP is launched in the
market with minimal features. The future iterations depend on the initial response.

The best way to approach New Product Development is to rely on Agile Product Development
that focuses on incremental and iterative development while promoting collaboration and
communication.

This is better than the waterfall approach as it allows for to-and-fro movement across the product
development cycle as new user requirements emerge. Though the development stages of
Waterfall and Agile are similar, these software development methodologies differ.

The advantage of Agile is that it speeds up the software development process while maintaining
communication and synchronization across the development teams.

Stage 6: Deployment

Once the MVP is ready, efforts shift from development to deploying the product in the live
environment. This process involves embracing the DevOps culture and implementing the CI/CD
pipeline.

The different stages of implementation include:

a. Commit

This stage involves:

 The newly developed features are integrated with the code for the existing features
 Quality assurance team ensures that the integrated code works fine
 CI/CD tools such as Jenkins run automated unit tests and sanity tests to check code’s
efficacy

b. Build

This stage involves:

 Developers push the software artifacts into the registry using Docker tools such as
Gradle, Packer, AZK, etc.

c. Alpha Deployment
This stage involves:

 Developers test the performance of the new builds and the interactions between those
builds.

d. Beta Deployment

This stage involves:

 Manual testing of the new product to validate its overall performance and efficiency of
output considering all input scenarios.

e. Production Deployment

This stage involves:

 The product is pushed into the live environment, i.e., the product is available and ready to
use by the end-users.

Stage 7: Market Entry/Commercialization

Commercialization is an umbrella term that entails varied strategies to ensure the success of the
new product. Here is what commercialization includes:

If all the mentioned strategies fall right in place, nothing can stop a product from getting
attention and being a product-market fit.

Here are some must-do marketing activities that will help the product gain traction:

1. Marketing the Concept Over Product

The idea here is simple: talk about the concept and the product’s intent instead of endlessly
boasting about the product features. In short, answer how the product will make the customer’s
life easier.

When HubSpot, a marketer’s product, was launched, it was not much of a success. Sadly, their
customers did not understand the intent of the now successful product.

So, how did they change the game?

They chose to market their unique selling point instead of marketing and promoting the entire
product. That unique selling point was inbound marketing.

They started to create awareness around inbound marketing and instantly became a recognized
leader in the software product industry. Sometimes the right marketing is all a product needs for
the magnet effect.
2. Having a Brand Voice

A unique mindset and a unique voice always gain an all-ears audience. This is where the
marketing team plays a significant role. They need to establish an effective communication style
that represents the brand in the best manner.

Be it blogs, emails, or even the website content, all of these elements need to be well thought out
and clear in their message. In the end, these elements should hold the power to intrigue the target
audience.

3. Conducting Intriguing Webinars

Webinars are one way to attract quality leads. Conduct webinars that talk about how the new
product will benefit the audience and describe the features that are being introduced.

Webinars can also help promote findability and discoverability:

 Findability: It is easy to find and use features that the customer is aware of.
 Discoverability: It is easy to find and use features that the customer has no knowledge
about.

Now that remote work is gaining traction, webinars are an even more effective way to reach a
target audience. Talk about the product, describe its features, and witness a positive impact on
the bottom line.

Benefits of the New Product Development Process

Here are some of the benefits of sticking to the New Product Development process:

 Helps check the technical feasibility of the idea

 Ensures faster time to market
 Effectively addresses the customer needs
 Multiplies the chances of success
 Reduces technical debt
 Better management of the feature creep
 Negates the opportunity cost

What is the Need for New Product Development?