In a recent survey, 68% of respondents chose ‘product marketing’ as the most important factor for the success of a product. While that is partly correct, the rest 32% has picked ‘right product development strategy’ as their response. The interesting fact is that over 90% of those who chose ‘strategy’ were entrepreneurs and successful product owners.
So, what do you think is the most important factor for the success of a product?
→ Customer satisfaction
While each of the above parameters plays a crucial role in product success, the right product strategy takes the front seat as you battle against a huge crowd of competition.
In this article, we will walk you through the best practices to devise the right product development strategy for your business.
Here’s what’s in store:
→ What is a product development strategy
→ Different types of product development strategies
→ How to devise your own product development strategy
What is a product development strategy?
It refers to the process of future-proofing your product with the right development approach and enabling your business to disrupt the market and competition with innovative and delightful solutions for the customers who need your product. A definite product development strategy allows you to gain a competitive advantage by aligning your business goals effectively and mitigating risks. It improves the market readiness of your product and helps you drive business goals such as sales, revenue growth, and profits.
What are the different types of product development strategies?
There are four broad types of approaches that product development companies commonly practise while strategizing their product development. These best practices help you understand where and how to position your product in the market successfully.
1) The product that leads the market
2) The product that challenges
3) The product that follows
4) The niche product
#1 The product that leads the market
The first category refers to the kind of strategy practised by market leaders who create first-of-the-kind and innovative products that stand out and lead the market. Product development companies that aspire to become market leaders will have to invest huge money and resources in research and development. This strategy helps to create a new market and leverage the ‘first-mover advantage’. Apple, Amazon, eBay are a few examples of successful market leaders.
#2 The product that challenges
This strategy refers to the kind of products that gain traction by challenging the market leader. Just like the market leader, challengers also invest a lot of time, effort, and money in research and development but the key difference is that the challengers aspire to create a highly competitive product rather than the number-one product. The product development companies that aim to conquer the second largest market share should practise this strategy.
#3 The product that follows
The third strategy is an interesting one where the product development companies take the short route to success by just following the leaders and marketers without spending huge on research and development or innovation. The best thing about this strategy is that the followers can become more successful than market leaders. We know what Facebook is today that once followed the footprints of Orkut and MySpace.
#4 The niche product
This strategy refers to creating products for smaller audiences to serve specific and limited purposes and still being successful in that domain. The advantages of creating niche products are their limited competition and mitigated risks. Product development companies that have limited resources and money can invest in creating niche products. Developing niche products help reap consistent benefits in the long run.
Here’s how to devise your own product development strategy:
What follows is a step-by-step guide to create a winning product development strategy:
1) Define your purpose
2) Clearly establish your mission vision statements
3) Understand your market
4) Learn from your competitors
5) Devise your business model
6) Do an intensive research
7) Identify problems aka opportunities
8) Keep improving consistently
#1 Define your purpose
Great products serve great purposes. The first step to build a great product is to define your product vision. The product vision needs to be such that it inspires people to buy it and serve valuable purposes for them. The success of a product lies in the core purpose it serves, the value it delivers, and the difference it brings. For example, Google’s vision is to provide access to the world’s information in just one click and the benefits of such a strong product vision are miraculous.
#2 Clearly establish your mission and vision statements
The next step to defining your product value is to set micro and macro goals to envision your product value in the long term. Clearly established mission statements help you to align your teams on the goals and design a product roadmap accordingly with key milestones. Besides defining the reason why your product is in the market, your mission should clarify whom it caters to, why they should buy it, and what makes your product unique.
#3 Understand your market
Understanding your market involves two things: knowing your customers as well as competitors better. You can not sell your product to your customers if you haven’t figured out who exactly they are and what exactly they need. Knowing your target audiences, their problem statements, interests, their user personas, etc., helps you enhance the value of your product. The better you know your customers’ pain points, the more ahead of the curve you will be in your competition.
#4 Learn from your competitors
Every marketplace is becoming increasingly competitive. While there are scores of other players in the market who sell (more or less) the same as you do, how do you think you can stand apart from them and make a difference? Extensive competitive study and analysis are the keys to unlock competitive advantage. Follow your peers, identify their areas of improvement, and make your product better than theirs.
#5 Devise your business model
Every product has business goals that include ROI outcomes and other KPIs. As you develop your product, it is essential that you simultaneously devise an ideal business model that aligns with your revenue goals. Power your business with an ROI-ready model that is foolproof and guarantees revenue outcomes. Sponsored ads (like Facebook), homegrown paid products (like LinkedIn), subscription-based content (like Netflix) are some examples of successful revenue models for products.
#6 Do an intensive research
In-depth research and deep-dive analysis help you identify your key differentiators and USP-boosting features. Research your industry landscape extensively and accelerate your product design and development processes to identify the core features that can translate your brand value effectively. Incorporate the takeaways of your research as insightful actionable items in your product design and development.
#7 Identify problems a ka opportunities
There’s a famous saying that reads problems are opportunities in disguise. This best applies to product design and development. Your product design and development should go through a series of iterations before you finalize the best and enhanced version. Creating user personas of your ideal customer profiles and conducting impactful usability tests help you identify your problems. If there are any gaps in your capabilities or roadblocks in the ideal business journey, you can mitigate those risks at this phase of product design and development. Ensure that your end-user gets the best possible user experience by adopting the best-in-industry product design and development practices.
#8 Keep improving consistently
Take any brand that is successful today. Facebook, Google, Amazon, or be it anyone – just compare how their product designs used to be when they were launched and how they are today. Their meticulous and consistent efforts to improvise their product design speaks for their massive success today, and there lies the secret of a successful product design and development. The best product development strategy is to keep improving your product for better and forever. After all, the best version of your product should be the one that you are about to release.
The product market is becoming increasingly competitive and it’s not easy to stand out in the huge crowd of competition. Building a winning product development strategy is a mission-critical step in your business. That said, the steps and best particles listed out in this article will help you give your product development strategy a headstart. Follow this space for more resourceful articles on product development and digital transformation trends. If you are looking for a personalized product development solution, we are ready to help you. Get in touch for a free consultation with our product development experts.
Siam computing houses a team of product development experts, designers, developers, business analysts, product strategists, and technology enthusiasts. With over a decade of experience, we have helped a broad spectrum of domestic and global clients develop stunning products, outperform competitors, and succeed in the market. Are you a product aspirant looking for the best product development company? Siam Computing has got you covered. Call us for free consultation. We would love to help you.