Are you planning to start a new business, or maybe you want to launch a new product but don’t know that is the best strategy? In this article, we will present to you the 8 best strategies for product development.
It is crucial that you understand your business, what kind of product or service you have, where you want to compete, and who your competitors will be. Also, the development of new products or services will depend on the strategy you want to implement in your company.
Before you choose the best strategy for product development, it is necessary to understand what is this, and what does it include.
What is a strategy for product development?
Also known as product strategy or product development strategy. It includes all strategies that a company can implement for the development of a product or service.
It serves as a roadmap for all the activities that will be carried out to ensure that the product or service won’t lose its focus, and that the company knows what is necessary to do and what is the process.
For instance, if the marketing team wants to add new features to a product or service due to the received feedback from customers, they will have to follow all the tasks that are described in the product development strategy. By doing this, they comply with the goals of the company; sales growth and profits.
What does a product strategy plan have?
The product strategy carefully underlines what problems the products or services can solve, how the clients can be benefited, the impact they will experience, and also, how the products or services can help the business.
Every company that wants to grow in a healthy and organized way needs to create a product strategy from the beginning, since it establishes the different decisions that can be made in relation to funding, prices, platforms, product vision, product goals, and innovations.
For example, the product vision serves as a guide for defining the target audience of the product or service. Where you will sell it, what strategies can be implemented, and how this product or service will perform in the market versus other competitors.
In this case, write every idea you have around the potential of your product or service, and why people should acquire it. If you follow these guidelines, you guarantee that your audience will always be satisfied with the new products you launch into the market.
What are the best strategies to develop a new product?
We will give you several product strategies that you can apply in your business. They will help you to organize the development of new products, taking into account the goals of the company.
When you have a good strategy for your product, you will be able to improve the product development process, reducing the risks of affecting the research and development area. Also, your product will fit better the current conditions of the market and increase sales.
1. Time to market strategy
This is a great strategy for new product development. Entering the market before any other competitor.
How? Well, it depends on your business. If you for example launch an innovative app that doesn’t exist or no one else has thought about, it is the perfect opportunity to enter the market with a time to market strategy.
You will get a great amount of customers, and over the days or months, you can release new updates, to fix bugs or errors in the app.
When other competitors want to copy your business idea, you will already have a big market share and loyal customers. Why? Because you were the first to enter the market with that app.
The key here is rapid selling, and updating the service or app later.
An example of time to market is the streaming platform, Netflix. This company was a pioneer in the streaming services, and thus, it has a great amount of subscribers around the world. Only a few years ago other streaming services started to compete against Netflix.
Though the other streaming platforms have great content, new movies and series, it has been hard for them to reach Netflix, since it was the first in the market with this service.
2. Innovation strategy
This strategy for product development is not for everyone. It requires to assume risks. This strategy is for companies that are willing to innovate in new ways that have nothing to do with the main product they offer.
An example of this is Slack. They started as an app for gamers. However, they saw the potential it had for companies, and started offering the service at a professional level.
Thanks to their innovation, and the risk of offering the app (that was originally designed for gamers) to companies, they now count on over 10 million daily active users.
In this strategy for new product development, think of how you could provide a similar benefit to the current service or product you offer, and innovate taking that into account.
For this strategy to work, you can also hire a company that provides outsourced product development services; they can help you come up with new ideas for your product, and innovate upon it.
3. Market oriented strategy
The market oriented strategy implies the company focuses its efforts on developing new products taking into account the market’s needs.
This marketing strategy for product development requires a lot of research and development. And by applying this approach, the company can come up with new innovative ideas the market is asking for.
Amazon is a good example of applying a market oriented strategy. They think of new ways to add processes and services to please the market. If people want exclusive treatment, Amazon creates exclusive services in exchange for an additional fee.
One of the newest strategies of Amazon is to use drones to deliver their packages; they understand the market wants their products delivered in a short time after they buy them. This is an innovative way to deliver products faster to their customers.
The market oriented strategy will require a lot of effort on the product development life cycle, since the market is constantly changing.
4. Customer oriented strategy
In this case, companies or startups focus only on a specific buyer persona. This strategy works if you really know your audience: their needs, pain points, unsolved problems, and desires.
When a company is customer oriented, they must listen carefully to every customer and tailor the new product development specifically for them.
Another way to develop a strategy that is customer oriented is by improving the different processes of the company. For instance, you can work on the customer service area to make it more accessible to clients when they call or have a complaint.
If your customer service area solves any product or service related problem in a short period of time, your customers will be grateful and will stay with you, no matter what problems arise.
The key in this strategy is to act fast, since your customers will be the center of your business. Don’t try to copy your competitors in the strategies they implement, since they have different customers to yours.
5. Product oriented
When you try to apply this strategy, you need to be the best at product development. Why? Because you create products based on what you know, your expertise and what you really want to sell in the market.
Apple is a great example of this strategy. They innovate their products with the intention of generating great sales volume. The company cares a lot for quality, and they innovate on their products by adding new features and technologies.
Here, the feedback of the market is not the focus, rather, the company creates new products and tries its best to convince the market how good it is. Of course, the company receives feedback from customers and takes it into account for new developments, but the real interest of the company is to deliver high quality products.
6. Price driven strategy
This strategy for product development depends on offering your service or product at a low price. It is a risky move, since you won’t be able to sell your product at an expensive price, rather, you will have to compete with other companies at similar conditions. The only difference is that your product or service will distinguish from the rest with specific features.
In this scenario, you have to be smart to market your product, and make it look more appealing than the ones from your competitors. Think of this strategy only when you have a product that is not too innovative and when there are many competitors.
7. Cost strategy
This strategy has the particularity of manufacturing products or devices at the lowest cost possible. It requires an efficient system for producing big amounts of products to ensure the manufacturing costs are low.
However, if you are in the technology area, it is important to analyze if this strategy really works for your business model. Often, the companies that apply this strategy for product development are the ones that make cleaning products.
These kinds of products don’t have a lot of differentiation, and the marketing strategies are the main core of the companies for attracting customers.
8. Differentiation strategy
When the goal of your business is to be exclusive, or recognized as a company that launches interesting products, you will have to rely on different factors to stand out from the competition:
- Offer exclusive features that no one else has.
- Offer a better customer experience.
- Guarantee the performance of your products (drops, water resistant, long lasting battery).
- Use materials that ensure a larger longevity of the product under hard conditions.
- Exclusive features for specific locations.
You can choose any of these factors and use them as a strategy for your business process. Don’t try to use them all at the same time, because it will be difficult to meet all expectations of the customers. Remember, this strategy requires you to innovate in future versions of your product, to keep them attractive and different from the competition.
We hope you liked this article and that is useful for you. The final recommendation is, try to apply the best strategy for product development that you think aligns better with the core of your business. Remember that once you select one of these, you will have to develop new products taking into account the chosen strategy.