Product Strategy, with a simple example

Every day in our lives, we have to make many choices. Even the time we get up in the morning and the time we go to sleep is a choice that we make. Not just that, we make choices in every other task that we do. But only some people make some decisions consciously :-)

Product Strategy is all about making choices. Making choices in every aspect of product lifecycle.

Let me a take a very simple example of setting up a Pakoda (snack) stall. One may wonder, being in sophisticated technology jobs, what an example? What has the pakoda shop to do with product strategy?. Yes in a real world company, it gets a little more complicated. There will be many priorities, many stakeholders etc. But, the fundamentals remains the same. So, Let us dissect this case and see how it goes! :-)

I reiterate "PRODUCT STRATEGY is all about making choices…"

Let us see what choices one has to make while setting up a pokada or samosa shop

• ?First and foremost, what kind of Pakodas and samosas to make? >> Which recipe to use? >>How many varieties to have?
• Where to get the ingredients from? >>Which ingredients to get from retail market? >>Which ones to get from wholesale market? >>Order some items online? >>Source some ingredients from some manufacturer?
• How to price them? >>Cost + margin and how much? >>What about price at nearby shops, restaurants and other competitors? >>What about frequent changes in oil prices and LPG, would you need to consider that?
• Location choices - where to put the shop? >>Which location is apt? >>Nearby a busy mall or college or bus stand or a popular retail store?
• Customer segment >>Who are we making the pakodas for? >>What type of customer segment to target?
• Timing >>What is the ideal time to operate?
• Packaging >>What kind of paper to use? >>Or should we have a specific unique packaging?
• Garbage handling >>How to handle the waste? >>What about Segregation and will it be collected from some mahanagar palike team?

And the list can go on…. So, we saw many different choices one has to make. From the very critical ones like how to source ingredients? to as simple as deciding on the packing material.

Having detailed out these stuff, Now let us understand, how to take decisions on these different options. The driving force behind this process is nothing but the business objectives. Objectives guide in making the right choices.?Business objective is not just about making money all the time continuously!!

After having understood a simple example, let me also highlight some core components that can help define a strong and coherent Product Strategy.

Target customer

Start with a narrow segment, Try to provide critical value for a specific target audience. Targeting wider audience segment may risk, not satisfying any of them fully.

Customer Need?

Again focus on one such core customer need to be satisfied Vs many weak needs. Having a clearly identified customer need gives us further clarity what decisions to make and which direction to take.

Market category

It is important to identify the product with a category, it give us focus. More important, it gives clarity to customers on how they should perceive our product and which alternatives are to be compared with.

Key Benefit

Customers buy products not for its features but for the benefit it offers. Before we develop a feature, we should know what benefit it will offer to customers. There can be many benefits, but identify one important, core benefit that could become the compelling reason for customers to buy.

Competition and customer alternatives

Competition is not just about another product from a different company. Think from customer point of view, understand the options available to them. For example, using public transport or Taxi services is an alternative to owning a car.

Unique differentiator

When there are many products with similar features offering same or similar benefit to customers. How can the customers decide, which product to buy? Having a unique differentiator helps. It not about having another feature or adding more value. But, more about how do we stand out from the rest!.

Now if we them together and use the elevator pitch framework, strategy is easy to understand and explain in two sentences. This can also be directly used as product positioning statement.

Elevator Pitch Framework

"For <target customer>,

Who <customer need>

<product name> Is a <market category> That <one key benefit> .

Unlike (primary customer alternative),

The Product (unique differentiator)."

The elevator pitch, does not focus on business model or pricing models. It is simple. But if we get this right, we can be sure that, we are on the right way to define a strong product strategy.

Development of product strategy should be done together with all the important stakeholders. Like, those who need to approve, those who need to sponsor, those who need to execute and those who act as influencers in many ways etc. So, involve people, build support and then shift to execution mode.

Having a clear objective and a strategy does not guarantee that we achieve success. But, for sure it increases the chances of achieving it. And I am confident that almost all of you will agree that, it is definitely better than wandering around aimlessly.

Developing a strong product strategy and focusing on its execution is not the end of story. But just the beginning. Market economics will change, competitive dynamics will alter, we will get new insights.?

"Remember, Product strategy will change over time!"