Types of Product Strategies Used in Business
Whenever you are creating, marketing and selling a product or service, do this using specific product strategy. Getting your product strategy right would let you to develop the products and services with particular clear business objective in mind.
You will find that all successful product strategies are actually based on only several main product strategies.
These are the following main product strategies:
Product Strategy 1: Market leader (when you are in a position to be the best in the market)
Product Strategy 2: Challenger (when you are trying to go after the market leader’s market share)
Product Strategy 3: Follower (mainly you are following the industry standards and marketing average products and services) and finally
Product Strategy 4: Specialist product strategy (when you are focusing on a specialized or unique niche market).
Which of the previously mentioned product strategy you will use depend on various internal and external factors.
The internal elements include your R&D, operations, manufacturing capabilities to name a few.
The external elements will involve basically two major groups of variables: the market demand including market trends and the competitors’ positioning in the marketplace.
Let’s review these main types of product strategies:
Typically market leaders produce brand new and revolutionary products and solutions so as to develop a bigger marketplace. This type of company invests seriously in R&D to be able to develop new services which are unique and better than competitors. This is often costly approach, which makes it hard for any small company to put into action.
The next product strategy (challenger strategy) resembles the previous product strategy. The business invests to a great extent in R&D to be able to make products which are progressive and can differentiate in the market. The actual difference involving the two product strategies is the leader is definitely the number 1 organization out there, however challengers are trying to get that place.
Businesses employing a follower product strategy tend not to invest very much in R&D. As an alternative, these companies use the innovative developments put together by others. Consequently, their products and services are not original, additionally they as a result control lower pricing for their products.
Finally, the specialist product strategy requires creating a product or service to get a smaller sized part on the market. For instance, an application developer may concentrate on the academic market, and even smaller market like the business schools market segment. This plan is often good for smaller sized companies having restricted assets, because resources could be used effectively to pay attention to the requirements in the specialized segment in the market.