Day 96 — PM series 2/5: “Product Strategy & Marketing”
What are the main factors contribute to a product success? Is it simply because we have a superior product? Surprisingly (or not), a lot of startups fail not because they don’t have a good product idea, but without a good strategy to determine when to launch it, where to launch it, what the scope of MVP is, and how to attract early adopters and Angel Investors.
This is a 5-part series of my work experience/knowledge about product management, please check out the rest of the series:
In today’s article, I’m going to share my experience/ knowledge around product strategy and marketing in the following structure:
- What is product strategy & marketing
- Why do we need them
- How to formulate product strategy & marketing plan
What is product strategy & marketing
People talk a lot about product strategy, or strategic way to build/sell a product, but what exactly is product strategy? How does it intertwine with marketing strategy? Let’s take a deep dive to understand what they are:
What is product strategy
Product strategy is a derivative of business strategy, for the product success contributes back to the business success at various levels. A product strategy usually consists of the following elements:
- Business Goal: What is the target market segment/users? Who are our competitors? What is the competitive edge? How does the product success contribute back to business success? (e.g. increase revenue from new transactions; increase market share and brand awareness with new adopted users; increase brand value with new design; increase purchase intention with the new feature set, etc.) There are some commonly used product/ business strategy framework, and you can learn more about it from my earlier post: Strategy.
- Experience Goal: What are the user needs we’re addressing thought this product? Do we solve existing pain points, or create a new way, new process of working/living? What are some key benefit that users get from the product? How does the product fit into their existing lives? What types of praise we want to hear from user survey?
- Feature Breakdown: What exactly do you want to sell to potential customers? What features will you add to increase the benefits offered to your target market? How does your product differ from the others? “Marketing is not about providing products or services, it is essentially about providing changing benefits to the changing needs and demands of the customer”[5] Product features differentiate among competitors.
- Technology Stack: What kind of technology we’re building upon? Is there a plan/ strategy for tech migration? What is the cost/ risk we’re expecting for adopting new technology?
- Product Lifecycle: What is the projected product lifecycle (see example figure below)? Where does the next release fit into the lifecycle? What’s the product goals based on the phase in the lifecycle?
- Execution Roadmap: What’s the timeline for the key product milestones (e.g. alpha test, beta test/ MVP, v2.0, etc.)? What are the key activities involved in those milestones (e.g. legal & compliance check in, internal testing, press release, etc.)? What are the key check point with senior leadership team?
By no mean the above is a comprehensive list, but this should give us a good idea of where to start with our initial draft of product strategy.
What is product marketing
According to Wikipedia, “The organization’s marketing task is to determine the needs, wants and interests of target markets and to achieve the desired results more effectively and efficiently than competitors, in a way that preserves or enhances the consumer’s or society’s well-being.”
I remember around 16 years ago, my first job as product manager in a marketing/ product team, one of my first tasks is to draft a marketing strategy for an import car. I was using the classical Marketing 4Ps framework (Product, Price, Place/Distribution, Promotion) to create my first ever marketing plan.
As time goes by, 4Ps evolved into newer versions like 6Ps (appending People & Process), 7Ps (appending Physical Evidence), or 8Ps (appending Productivity and Quality). Some might argue some of these P attributes are not specifically in the scope marketing work. However, most of these attributes are surely important to capture in order to form a sound marketing plan.
Obviously product marketing is much bigger than what 2–3 paragraphs can explain, but this high level description should somewhat helps us to kick start our learning and adoption of product marketing plan.
Why mixing strategy & marketing
A little bit of the story time: Long long time ago, there isn’t a clear concept of product strategy nor marketing. Makers simply want to make better product with cheaper cost and hope to make money out of it. Soon they realize that, it’s not always the best product wins, or the cheapest; sometime it’s the product that fits a specific customers needs that sell well.
Other factors like the perfect price (too high people can’t afford, too low they suspect the quality is bad), easy to access to (best spot in the bazaar, or deliver to your home), and discount or product package (buy 1 get 1 free, buy whiskey get free glasses), these strategy sometimes really boost the sales. Therefore in the 60’s, E. Jerome McCarthy created the Marketing 4Ps, and it’s widely adopted for marketing strategy field.
At that time, because marketing is so hot in the industry, marketing research is the only ways to get funding to get to know what users want in a scalable way. Therefore, for a long period of time, product strategy is just a piece of the whole marketing strategy. Another reason they were tied together is because before digital world invade our lives, product managers are mostly trained by business school and their focus is on how to sell more products; while “production manager” are trained by engineering school who doesn’t really pay close attention to user needs or product/market fit.
Why do we need Product Strategy & Marketing
In short, both approaches intend to help us make the right product, sell it to the right customer at the right time, and get most of the product success.
The value of product strategy
Ever heard of the term “Product/market fit”? That’s probably one of the most important thing in product strategy and often got wrong, If haven’t heard of it, here’s a simple summary:
Product/market fit is the degree to which a product satisfies a strong market demand. It has been identified as a first step to building a successful venture in which the company meets early adopters, gathers feedback and gauges interest in its product(s). — Wikipedia
One of the most common issues in product strategy is bad product-market fit. There are many reason why a product couldn’t reach a good product/market fit, just to name a few:
- Customer base is not big enough
- Customers are not ready for the new technology (you probably heard of the phrase “It’s ahead of it’s time”. )
- Over/under offer to fit customer’s needs
- Wrong customer segment
- Bad pricing strategy
That being said, if a product can’t get the right product/market fit, product failure is not surprising. An example of product/market fit is Nespresso. Many don’t know that this easy-to-make espresso drink from a capsule, which George Clooney craves for, was created in the 80’s in Switzerland. The patent was actually granted in the 70’s. However, you couldn’t easily find a machine like it with the brand printed on it back then, because due to lack of product/market fit, it wasn’t a successful/ well-known product.
It wasn’t until 2000 when they opened their first boutique in Paris as a concept store, and features George Clooney in their commercials, the sales and adoptions really started to take off. The capsule/machine/ quality of coffee didn’t change drastically change, but the market just wasn’t ready until much later.
The value of product marketing
What’s the value of good product marketing? Think about CocaCola vs. Pepsi, both rely on strong marketing to get buy-in, given the product quality is extremely close to each other. In a famous blind test, lots of participants indicate one glass tasted better than the other because it’s Coke, and turns out it’s actually Pepsi. The reason why they thought “Coke taste better” is mainly because of confirmation bias, and that came from CocaCola’s successful marketing.
Similar example of marketing-driven digital product success can be found in the early success of YouTube. Back then, the platform quality is not much superior than their competitors, but a series of successful marketing campaign helped YouTube gain a large user base, which eventually leads to their dominance in online video uploading/streaming/sharing platform.
How to formulate product strategy & marketing plan
Now that we’re aware of the importance of product strategy & marketing, what are some approaches we can start to take to create our initial product strategy and marketing plan? Let’s start with product strategy:
How to formulate product strategy
- “Know thy neighbor”: Whether you’re using Michael Porter’s 5 Force Analysis, Blue Ocean Strategy, or the popular Platform Strategy, the first you’ll need to know is the market and trends. It might not be wise to sell a fancy comb to monks who shave their hat everyday, or sell shoes where they don’t need them. Knowing your market segment helps you focus on what is really needed and how many people actually need it.
- Formulate your mission/vision statement and product goal: The mission statement is a powerful way not only to bring your team together, but also attract the early adopters. They need to know what you stand for, what are the purposes you’re trying to achieve. Then, a clear vision statement helps your team and your sponsor/investor know where the end goals is, and align on the approach you take. Once you have both, you can break it down to tangible goals that you’re team is trying to achieve.
- Define your approach: Once you got all those high level work done (and agree upon, if in a larger organization), the next step is to define the actual steps. You might need to do a bit research about the resourcing & budget, feasibility on underlying technology, and that helps you define the actual scope and corresponding timeline.
How to formulate marketing strategy
One of the classical framework of marketing strategy that I still use to coach designer and product manager is AIDA. It’s the acronym of:
- Attention: How do we get users attention to our product? Famous example is the iHOP to iHOb marketing campaign last year; it’s a publicity stunt that seemingly-real branding change as a practical joke, that trigger a viral effect and got people pay attention to their new product line (burger) and attract more people into their stores.
- Interest: Once we got people pay attention to our product message, how do we grab their interest toward our product? This is the part of many ads campaign failed that people remember the commercial, but not the product. So, the important task her is to figure out how we can craft our marketing the message to link back to our product, and make our product interesting to our target audience.
- Desire: Now that our target audience is interested in our product, how do we enhance that message and create a purchase intention (PI)? How do we create a connection of the product features/purpose to target users daily life, the problem they have, the pain point they suffer from, or the wish they want to come true? Or if it’s a new area they never think of (e.g. space travel), how do we make them wanting to sign up? Is it the limited time special discount that creates a sense of urgency? or is it something we tap into their repeating, excruciating pain? (e.g. family make a mess and house wives/husbands need to clean up everyday)
- Action: They are ready to go, they are ready to buy, where can they buy it? Where is the action? Do we create a big shiny shop now button, a hotline numbers to call, or an easy way to subscribe to the service? This is really where we close the deal and where the money comes in, so it might not be as innovative, exciting, from a creative standpoint, but it’s essentially the most important step.
One of the most popular marketing framework these days is Marketing 4.0, a framework that refuse to believe the “once-size-fits-all” marketing strategy, but instead analyzing different nature of different industries, and craft our marketing strategy correspondingly.
The first step to adopt Marketing 4.0 framework is by understanding what types of industry we’re in in respect of the 5As marketing framework: Brand awareness, appeal, ask, act, and advocate. Do people know our brand/product? Is our brand/product appealing to them? Are they curious about our brand/product? Will they take action (e.g. buy our product)? And will they advocate for our brand/product? Using this 5As framework, you can start plotting the shape of your brand/industry as figure below.
In the figure below, its the mapping of A1 — awareness, A2 — appeal, A3 — ask, A4 — act, and A5 — advocate. The higher you score on each A, the taller the color bar is in the Y axis. Now link all the Y color bars together, do you see your brand/product a Knob, a Goldfish, a Trumpet, or a Funnel?
This powerful framework disrupt some of the traditional marketing thinking, that we always go through the Marketing funnel, and start by building the brand awareness. In the hyper connect digital age and super fast pace, sales can come from all different channels with different types of purchase intention, or even different “mood of purchasing”. It’s important to really analyze where the sales are from and identify the opportunities that suitable for our industry/ brand/ product.
Conclusion
- Product Strategy and Marketing help us define what’s the right product, who’s our target audience, where the market is, and when and how to approach the market;
- A good product strategy should focus on how to plan out the whole product lifecycle with both internal factors (e.g. business goal) and external factors (e.g. user needs, market trends); A good marketing strategy should think about not only how the product work/worth, but also what it means to customers, how to get the product into both their consciousness and their home.
- To formulate product strategy and marketing plan, start by understanding the game: researching the customer and existing competition, find threat and opportunities, and customize our approach to get customers interested and take actions.
Have you seen any failed product strategy or marketing plan? What are some good ways to formulate product strategy? I’m eager to learn from you.
ABC. Always be clappin’.
The opinions expressed in this article are those of the author. They do not represent current or previous client or employer views.
