Stand out or die – what is a product development strategy?
August 16 2022
Are you launching a new product or improving an existing one? Are you unsure how to handle it? This is where a product development strategy comes to the rescue. This topic is closely linked to marketing and sales strategies. In this article, I will show you that it is, however, more complicated and requires the development of a broader view of the company, product, marketing and long-term goals. It can be done but you need to take a holistic approach to sales.
We will start with the basics – long-term goals and a holistic approach. If you have been reading my content for a while (or have taken a look at the homepage), then you know that I believe in a holistic approach to sales. One that takes into account all the key departments in a company. And this is how I see this topic too. A product development strategy should include marketing and sales plans, and if the company does not currently have the resources to market a particular product – an HR plan to recruit appropriate specialists.
In addition, the plan should be formulated in a way that includes long-term sales. This is the only way to collect feedback from the market and make sensible plans for the future. There are exceptions, for example, a limited edition of a beverage available only for a few months of the year. But even this type of sales and product development plans should fit into a broader framework.
A final and very important factor is innovation. Given today’s market saturation, the product simply has to stand out in some way. However, innovation can be understood in many different ways, which we will discuss later.
What should a product development strategy include?
There are several elements without which the launch of a new product will be very difficult. It is worth remembering about:
- creating a persona symbolising customers to whom the product will be dedicated,
- developing a sales plan,
- establishing marketing and communication plans,
- ensuring product delivery,
- ensuring that production capacity is increased in case demand exceeds the expected estimates,
- creating a roadmap for product improvement or the introduction of a new model,
- providing technical assistance,
- setting an appropriate price.
Of course, not every item on this list will apply to every product you intend to launch.
Several other important factors should be taken into account when developing plans for the future:
- market penetration,
- market development,
- product development,
Your team must also answer some basic questions:
- Is the market already saturated with similar products?
- Will the product life cycle be sufficient for the projected financial forecasts in this case?
- What will the market look like at the time of the planned launch of the product?
- To what extent have competitors penetrated the market with their proposals and how should we position our product? Should we offer it as an interesting novelty in a market niche or aim for a broader marketing message?
Real market needs, MVPs and MLPs
The most vital thing in all this is to understand the users, their real needs and problems. For over ten years now, we have been living in the age of the app economy, where mass-produced digital products have dramatically changed the market landscape, consumer habits and even the way we think about product design. However, all too often, and I have personally witnessed this many times, founders do not think about addressing the real and current problems. They push through their business ideas without exercising sufficient due diligence.
Sometimes, all it takes is a minimum viable product (MVP) to see how the market will respond. The MVP is the hallmark of digital products. It involves app owners who launch a new product equipped with only basic options and observe how the public reacts. If the feedback is positive, they work on the app by improving the code and user experience, adding new features, and including marketing strategies.
There is another, more recent trend. I am referring to a minimum loveable product, or MLP. In this model, the product development strategy assumes that the MVP is not an excuse for launching unfinished apps. Instead, the product still has limited functionality but is created to completely satisfy basic needs while the user experience and user interface (UX/UI) are designed with the user’s emotions and onboarding process in mind. This is the “next-level school” of product design.
The new product development process
Before we get into specific examples and interesting case studies, I will tell you a little bit more about the theory. Prior to designing the placement of a product on shop shelves, it still needs to be created. This is where the product development and life cycle design processes become useful. In this section of the article, I will tell you about a few things to keep in mind.
The process itself consists of six stages:
- Idea generation. This stage involves a brainstorming session, during which the team gathers ideas for a new product or improvements to an existing one. A product concept is generated based on customer needs, market research, focus group feedback, team observations, intuition and data analysis. The key lies in defining the target market.
- Product definition. At this point, it is necessary to clearly define boundaries for the new item (design, material, budget, business).
During this stage, the product is defined by creating a business analysis, offering users a specific value that differentiates it from competitors (unique selling point, USP) and developing product success indicators (sales in the first quarter, in the first year, achievement of X number of users, expansion of market share). It is also necessary to establish a market strategy.
- Prototyping. This is when the team creates the first working copy of the new product. Such a basis should enable the determination of a number of technical parameters, sales opportunities and the foundation of a marketing strategy. Why not earlier, right after the market research, after the first stage of the entire process? Because the product has just been created, and we have not been able to do anything meaningful with it until now.
This stage requires the performance of a series of activities – a risk analysis, a strategy for further product development, feasibility and schedule meeting analyses and the definition of a minimum break-even point for the product.
- Preliminary design. This is when the refinement of the product and its “proper” design begins. The prototype provides us with an answer to the question of whether the item is feasible and whether it can be made within an established budget. The design shows us whether it can also be attractive and tailored to the user’s expectations.
At this stage, it is necessary to collect periodic feedback from all project stakeholders, order materials to finish the product and validate its final shape.
- Validation and testing. The most relevant aspect of a product launch is its functionality and usefulness to the customer. The design may not be the most appealing, and the product itself may not have all the features originally planned by the team and desired by the customer. To some extent, it may even be poorly designed. If the customer trusts and is emotionally attached to the brand (branding again!), they will be able to accept all of this. The situation is worse if the product does not fulfil its basic function.
Steve Jobs always rightly maintained that regardless of what a product looks like, it must first and foremost work. The slogan “it just works” is therefore essential. Of course, a beautiful design is not an obstacle in any way. This applies equally to the design of sippy cups, T-shirts featuring cute kittens and highly sophisticated technology. In fact, for decades, there have even been special sound design units within product design departments, which are strictly responsible for designing the audio experience for users. This includes the unscrewing of bottle caps (yes, such sounds are also designed) and the sound of a hoover.
At this stage, it is crucial to test whether and how the product works, how it is perceived by users, and what marketing strategies can lead the company closer to market success.
- Commercialisation of the solution. All that is left is to launch the product on the market. This is when the final details are finalised, the last strategies implemented and the product can be placed on the shop shelves.
Once that happens, it is possible to prepare for the planning of its successor.
Examples of product development strategies
Product development strategies may be divided into five main models:
- defined by price (you can create a premium product or offer a basic value model at a low price),
- defined by innovation (you can either charge a premium price for a very innovative product and exclusivity or opt for a regular price and let a large number of early adopters attract the rest of the market),
- defined by the time it takes to market the product (either you enter the market quickly or you launch more iterations of the product and wait longer),
- defined by the product’s orientation towards the market or a specific user group (here, market research is necessary to select an appropriate strategy),
- defined by the existing platform that the new product should fit into (if you already have a sales platform or product ecosystem and want to add a new element to your offer).
Specific case studies, along with the strategies companies have put in place, are provided below.
Apple and its product orientation. Apple is an example of a company whose products and marketing are inseparable. Yes, the product is supposed to first and foremost work, but that does not prevent it from also being beautiful. Steve Jobs has introduced the concept of a premium product for which users are willing to pay a premium price. Such a product is launched once and then refined over the years to subsequently undergo internal cannibalisation (the iPhone “killing” the iPod).
Netflix and its focus on ease of use. Netflix is the largest streaming platform in the world, and even though the business model and trust of users appear to have run out, the platform is still going strong. The streaming giant has always focused on several important features, including ease of use, a strongly diversified offer, content based on the knowledge of users and the personalisation of recommendations. Its competitors have largely copied the look and user experience linked to the navigation through the website (product). They also rely on differentiated content and aggressively compete in terms of price.
IKEA and the model of maintaining good quality at low prices. This brand has made its way into the consciousness of consumers and has become synonymous with high quality at moderate prices. In this case, the key to success lies in top-notch logistics and supply chains.
Snow Monkey and organic, allergy-friendly ice cream. Around 2017, the preferences of US customers began to take a strong turn. Snow Monkey’s managers recognised this change and introduced ice cream into its superfoods category. This marketing term refers to unprocessed foods rich in natural ingredients, which is exactly what Snow Monkey’s offer includes. Their ice cream is made up of ingredients that are vegan, non-dairy based and free of allergens, such as gluten, soya, nuts and lactose.
Nintendo and the motion revolution in the world of video games. Several years ago, Nintendo launched the Wii console based on motion control. It was followed by the release of the Wii U (from the same company) and now the Switch. All of them are based on the same idea and partly use the same accessories to control games. Nintendo opted for an innovative product, which still finds its reflection in the industry in the form of new generations of the company’s hardware built around the same idea, but also motion controllers for music games and controllers for virtual reality (VR) games.
Company mission and values versus product marketing strategy
Companies are paying more and more attention not only to what they sell but also to how they do it. The way they communicate their commitment to values is also relevant. This may include the idea of sustainability, the very fashionable trend of eco-friendly packaging or ecological printing. It may also involve the issue of neurodiversity, that is, the employment of people with different brain “wiring” who perceive reality differently. The recruitment of individuals with what is known as a t-shaped personality also fits into this trend, although it is a different topic. These are specialists who know everything about one or more subjects, but have a very broad knowledge that extends into other fields as well.
What does this have to do with a product launch? Customers (but also employees!) are becoming more interested in associating a particular company not only with a good product, but also with a product that is properly manufactured. It should also be created under responsible conditions and by people who are simply happy with their work. It all comes down to branding. Creating a mission and vision for the company, as well as values and appropriate communication. I happen to deal with the economy of value.
If you want to sell a new product, you need to communicate both its qualities and the exterior elements. Show that the packaging containing the juice is made from biodegradable materials or that the components of a computer do not contain cadmium or lead. They are not just environmental pipe dreams – in many cases, they are market requirements.
The role of the discovery phase, Design Thinking and Customer-centric Selling
A good product development strategy should also include as much innovation as possible. Without it, the product will be lost in the jungle of similar offers. New products appear and fade away just as quickly – their life cycles are short. This is why I personally recommend focusing on three important elements: the discovery phase, design thinking and customer-centric selling.
The discovery phase literally means “product discovery”. Its full definition reads more or less as follows: it is a data-driven reduction of uncertainty relating to problems and solutions, which is created by cross-functional teams through non-linear activities. Oof, okay, and now in English. Tim Herbig suggested this definition to show that the discovery phase of a team’s own product consists mainly of data, the removal of problems and the creation of solutions. The data determine our direction while the rest provides the customer – the user of the product – with a specific tool to address their challenges.
In turn, design thinking is an approach to solving problems relating to product design with a simultaneous understanding of the needs of individual users. It is associated with consumer empathy. It basically refers to designing a product in a way that does not prioritise projected sales revenues or key performance indicators (KPIs) but brings the problem down to a conversation with a single human being who represents the target group. As a result, it is easier to identify and address real problems.
Customer-centric selling is a sales method consisting in guiding the sales process in a manner ensuring that it is the customer who finds value in buying a product or service. This method entails reduced sales time, increased number of sales opportunities and transaction value, as well as objective evaluation of progress.
All these elements combine to form a coherent and intertwined whole.
These are the reasons why my services are so comprehensive. If you are planning a product launch, make sure that your product development strategy covers all of those key areas. Marketing strategies tend not to cover every single issue. I take all aspects into account and that is why I would like to recommend my services to you. Contact me, let’s talk.