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We are starting the marketing plan series with a discussion of the product strategy. We will identify the essential elements of a product strategy and the various tactics we can use in the execution of the product strategy for our furniture marketing business.
The marketing objectives
We commence by re-stating the marketing objectives defined in the earlier series on marketing strategy as follows:
To launch in the 2nd quarter of 2018 the initial home furniture and office systems lines.
To introduce the “ABODE” Brand of home furniture and “WORKPLACE” Brand of office systems to at least 40% of the target households and corporate clients by the 4th quarter of 2018.
Market coverage – geographic (country: Philippines)
To reach 20% of target households and target corporate clients in Metro Manila in the 2nd quarter, in the island of Luzon in the 3rd quarter, and in the islands of Visayas and Mindanao in the 4th quarter.
These marketing objectives will guide our marketing plan in the context we have discussed in the marketing strategy series.
We will show how each of the four elements of the marketing mix (product, price, promotion, and place) will contribute to the achievement of the above objectives.
In the process, we will be shaping our market offering, creating and communicating our business’ value proposition.
Specific to the product element, we mentioned previously in Part 4 of the marketing strategy series several strategies that suited the local marketing of imported brands of furniture. These were for products that have a fully implemented product strategy done by its foreign manufacturer and are now in the maturity stage of the product lifecycle.
One of the logical and common options of a furniture marketing business is to develop a separate product platform consisting of locally manufactured furniture items that meet specific needs/problems of the local market.
Our discussion of product strategy will deal with developing and marketing these local furniture items.
For our product strategy case, let us consider one furniture item – the dining set.
What is a product strategy?
Product strategy outlines the various elements and processes involved in the life of a product from its concept stage up to the end stage of its lifecycle consistently guided by how it can effectively and profitably satisfy the needs of its target market.
What are the elements of a product strategy?
Before coming up with a product idea or concept, you have to determine first what needs or problems exist in your target market that can be satisfied or met by your proposed product. This entails a thorough market research.
In the following discussion, you presume that market research shows that current urban dwellers prefer a 4-seater elegant and durable dining set that suits small households that live in condominium units.
You and your management team have to go through a process that includes the following steps using market research data and market feedback:
Generating and screening product ideas
You come up with a 4-seater dining set made of local hardwood that is elegant and durable.
Testing the product concept
You may ask some of your key dealers and approach a few independent customers in a focus group setting for feedback on the product concept.
Test marketing the product prototype
You produce a prototype, test it for performance, price it for what you believe it is worth, and show it to your dealers and some independent customers for feedback this time on a tangible product with an indicative price.
Technical and cost adjustments
You summarize the feedback and make the required improvement in product construction, finishing, and color selection. You also review your production and other costs to adjust your price to a profitable and acceptable level.
Determining the minimum viable product
You revise the prototype and come up with the minimum viable product meeting the target market quality expectations and attaining your profitability target.
Once you have your minimum viable product, you and your management team can proceed with the other elements.
How will your final product look, what are its dimension, finish, color, packaging, and other details that your target market deems aesthetically desirable?
In what respect will your product differ from that of competitors in terms of design? What other features can you add in terms of functionality?
Design and functionality differentiation is very important as it can convince customers to prefer your product in terms of aesthetic and performance, respectively.
You have to identify a few unique benefits associated with your differentiated product. These will be your value proposition to your target market.
Aside from the product features and benefits you have identified, you have to establish a quality standard for materials and workmanship that is expected by your target market. Quality forms part of your value proposition.
Given your product’s particular features and quality, what is the competitive price range for products in the same category as yours as determined by market research and feedback?
Having a clear product concept above, how would you position your product in the minds (and hearts) of your target market? Would you highlight design, quality, or price? What is your unique value proposition that makes your product different or superior to those of competitors?
Going back to our dining set case, you can position the final product as a local product of excellent quality specially designed to suit the Filipino homes.
You and your marketing team can develop a brand that encapsulates all of the above elements. You can come up with a brand name, logo, and brand styles that appropriately reflect these elements.
Your brand messaging should clearly communicate through all marketing channels your unique value proposition. It should differentiate your product from the competition.
You can brainstorm on several brand names and brand styles that embody your positioning statement.
As with all strategies, you should have a timeline for achieving the various milestones in the process of carrying out your product strategy.
The above elements of product strategy are also collectively referred to as new product development.
Now that your product strategy has been implemented, you can monitor the progress in the market of your new product by deliberately following its lifecycle.
The product lifecycle consists of four stages, namely: introduction, growth, maturity, and decline. There is no standard total time span for this cycle and duration of each stage. Both vary to a large degree for different products.
Let us briefly discuss each stage.
At this stage, market research has established the needed/desired features of the minimum viable product. A prototype has been developed and has been scheduled for a production run. Marketing samples have been given to the marketing and sales teams to promote the new product initially to key customers.
This is the most important milestone of your product strategy.
The new product has been promoted to all market segments using all marketing communication channels. It has been carried by all channel partners and has been purchased by major corporate clients. Sales volume has been accelerating and profits start increasing.
At this point, new market entrants have introduced a similar product after recognizing the profitability of your product. You try to boost sales and maximize profit while holding off competitors from gaining more market share.
Sales and profits decline while market share is eaten up by more competitors offering either cheaper or better quality similar products.
You can always extend the length of your product’s lifecycle or the duration of each stage by using different tactics involving the other elements of the marketing mix.
You may increase your product utility value by adding new features, reduce prices, launch more aggressive promotion, or improve the relationship with channel partners and corporate clients. All these are intended to create a positive impact on your product’s lifecycle.
The product is the most extensively studied element of the marketing mix. This article cannot adequately discuss everything about it.
For our present purpose, we have just discussed the most fundamental aspects to give us an initial understanding of product strategy.
I welcome your comments, suggestions, and questions.
You may also check other concerns about your existing and forthcoming business.