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Product Strategy
Elements of a Product Strategy
Changes Affecting Product
Management
Product Strategy over the life cycle
Competitor Analysis
Customer Analysis
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Elements of Product Strategy
Product Strategy

An action plan for the product that
addresses the following issues:
Basic Objectives such as growth vs.
profits.
Quantitative objectives such as
customer segment and competitive
targets.
Specific programs or tactics to
implement the core strategy

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Elements of Product Strategy
Benefits of Product Strategy

A successful product strategy leads to at
least three key outcomes:
Enhances coordination among the
functional areas of the organisation as
well within marketing.
Defines how resources will be allocated.
Leads to a superior market position.
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Elements of Product Strategy
Elements of a Product Strategy

Statement of objective(s) the product
should attain.
Selection of strategic alternatives
Selection of customer targets
Choice of competitor targets
Statement of the core strategy
Description of supporting marketing mix.
Description of supporting functional
programs.
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Elements of Product
Strategy
Company Mission/Vision
Corporate Objectives
Corporate Strategies
Divisional Objectives
Divisional Strategies
Product/Brand Objectives
Product Strategies
Program Objectives
Tactics
Level 0
Level 1
Level 2
Level 3
Level 4
Setting Objectives
Hierarchy of Objectives
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Elements of Product Strategy
Setting Objectives

Sales Revenue or Market Share
Profitability

One of the objectives becomes the
primary objective the other
generally becomes the constraint.


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Elements of Product Strategy
Characteristics of Good Objectives

Quantified standards of Performance
They should be challenging but not
unrealistic.
They should have a time frame.
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Elements of Product Strategy
Selection of Strategic Alternatives

Choice of Strategic alternative depends on
the primary objective selected.
Increasing Sales/Market Share
Market Development Strategies
(converting non users)
Market Penetration Strategies (increasing
usage from current level)
Increasing Profitability
Decreasing Inputs
Increasing Outputs

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Elements of Product
Strategy
New Product
Development
Growth in
Sales or
Market share
Market
Development
Market
Penetration
New
Segments
Existing
Customers
Convert
Nonusers
Competitors
Customers
Efficiency
Short-term
Profits
Decrease
Inputs
Increase
Outputs
Reduce
Costs
Increase
Price
Improve
Asset
Utilization
Improve
Sales Mix
Long-term
Profits
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Product Market Strategy
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New Product Development
To sustain growth and profits over a long period of time,
it is important for any firm to develop and commercialize
new products. The following strategies are adopted
related to new product development:

New-to-the-World Products: Discontinuous innovations
New Product Lines
Product Line Extension
Improvements or Revisions of Existing Products
Repositioning
Cost Reductions