The Important Relativity Between a Product Strategy and a Marketing Strategy
You’ve undoubtedly heard of the four Ps of marketing – price, product, promotion, and place. But how do these four components converge into one cohesive product and marketing strategy?
It’s best to separate these two components and understand the importance of each strategy individually before attempting to understand their relationship to one another. While they share similarities and overarching themes, the two strategies serve different purposes.
If you’re working on launching a brand new product or considering a new plan to promote your current product lines, make sure you’re planning to use these insights as you create your next product strategy.
Key Elements of a Market Strategy
A market strategy is like a roadmap for reaching your target audience, what type of communication you will have with them, and how you will differentiate your business from others in the same market.
At its core, a market strategy typically includes:
- Mission and vision statements
- Buyer personas
- Goals and priorities
- Key Messaging and Content Marketing plan
- Marketing Tactics and calendar (Marketing Mix)
- Measurement tools
When it works perfectly, a marketing strategy enables teams to execute the marketing tasks that bring the highest return on investment and evaluate new opportunities in light of the existing strategies. In other words, instead of chasing every new trend or opportunity that comes along, teams can evaluate the options according to how they fit with the current plan.
In most cases, marketing strategies fall on the plate of higher-level executives (CMO or a Director of Marketing) and then are driven forward and implemented by a larger team. The plans need to be flexible but not shift on a whim – they should help teams stay focused on the company’s bigger vision.
The most significant portion of the marketing strategy is typically the marketing tactics, detailing exactly how the company will share its key messages and aim to convert its audience into customers. However, more and more of these tactics fall to digital marketing actions in today’s environment.
However, there is still a place for traditional marketing tactics – print ads, television and radio advertising, and in-person promotions.
Key Elements of a Product Strategy
Inside of the marketing strategy is the product strategy. A product development strategy describes the goods or services delivered to your customers and, more importantly, how these products will support the overall business goals.
For companies that sell a single product or service, the two strategies – product and marketing – are essentially the same and require very little differentiation. However, teams must develop the strategies differently for medium to large companies that offer multiple products or services.
A product strategy typically starts with the customer in mind. Team leaders begin with market research, understanding what the customer wants and what potential needs are unmet in the industry or space. At this stage, businesses must consider how the potential product will impact its bottom line and contribute to its overall goals.
For instance, if a local bakery identifies a need for someone to cater large corporate events, this service may be in high demand but not feasible for a very small business.
Another element of the product strategy is the product lifecycle — how long the company will offer the product, how it will incorporate into new or existing product lines, and ultimately, how success will be evaluated.
Once these elements come together inside a product strategy, a team has the tools needed to decide how and where the company will market the products. User personas help companies better understand the customer’s unique behaviors and attributes, and campaigns are built around launching and promoting new products.
Product strategies are flexible and often short-term and can vary based on the company’s goals or key objectives. Some types of product strategies include price-based strategies, differentiation (how your product differs from another), or segmentation strategies that target a very niche market.
How Product and Market Strategies Work Together
Product and market strategies must work in tandem to be effective. For instance, if a marketing strategy states that the company will be most successful in reaching an older retiree population and yet the product strategy calls for a strong text message marketing campaign, the two are unlikely to be aligned.
Since product strategists often develop product strategies – very different roles than those working on the overall marketing strategy, it’s essential to communicate when writing and implementing the recommendations.
Many of the tasks for each strategy overlap, however. For instance, market research is likely to overlap since the product market should be a sub-segment of the company’s larger audience.
Likewise, the goals and priorities of the product strategy should align with those of the larger marketing plan. For example, if the company’s overarching goal is to increase revenue by 25%, the product strategy should detail what percentage of product sales will contribute to that goal.
One of the areas where the product and marketing strategies tend to differ is within the marketing mix or tactics. While the broader marketing plan may include 10-12 different marketing tactics, the product strategy implementation tends to be much more narrow.
To illustrate, consider a local bakery. The bakery’s marketing plan may call for tactics like robust SEO and content marketing around recipes, holiday cookie decorating, and tutorials. However, creating effective product strategies for the custom cookie delivery service might be completely different. Those tactics likely include social media advertising, product placement, and corporate sponsorships.
Building healthy, cross-functional teams that prioritize the importance of a robust, overall marketing plan and specific, aligned product plans is the best way to keep a positive and effective relationship between product and marketing strategies.
While both teams must be experts in their respective areas, everyone must also work toward the same goals and objectives of the entire company and keep the customer at the center of everything.
Additionally, continuous evaluation of strategies perform ensure that the company can make adjustments and pivot when the market takes unexpected turns, or the industry experiences a significant shift or new competitor.
The most successful companies invest in the planning phase, value the input of team members and customers, and work to deliver an outstanding product or service that solves a problem no other company can solve.
Jonathan is a technocrat and an avid outdoor enthusiast. He is a community manager and a committed team member at Userwell.com – a subsidiary of saas.industries. When he isn’t working to make the internet a better place, Jonathan can be found exploring the great outdoors and beautiful coastlines with his sidekick, Zen, a very energetic Weimaraner.