What is New Product Strategy?

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Your goal is to ultimately grow your business, right?

Great! But how?

Whether you’re a startup or an established enterprise, if you’re in this position then you may be considering a new product strategy, the purpose of which is to allow you to organize the vision for a product with the tactical implementation in order to increase market share.

However, a new product strategy is only one option to grow your business, and only tells a portion of the story.

Let’s zoom out for a moment.

If our goal is to grow the businesses, then increasing market share is one of the most viable and important opportunities to sell more and therefore increase revenue. In order to do this, you need to understand the concept of increasing your Total Addressable Market (TAM). If you don’t know what TAM is, google that and come back. Just kidding! I googled it for you. Check out this resource from Hubspot: Total Addressable Market (TAM): What It Is & How You Can Calculate It.

Now that we have that understood, let’s discuss Market Development strategies. The Ansoff Matrix helps us to understand the different market development strategy examples. In this matrix, market development is broken down into 4 categories; Market Penetration, Product Development, Market Development, and Diversification.

Source: themarketingagenda.com

One of the strongest cases to understand the Ansoff Matrix is product development examples coca-cola gives. Check out this great article from The Marketing Agenda: COCA-COLA: ANSOFF MATRIX. It does a really great job of breaking down the example.

New Product Development (NPD) requires planning, research, and thorough testing. Product development strategy focuses on new products, or revising existing ones. This involves ideation, conceptual testing, market analysis and product-market fit, development, testing, and launch. Whether you’re a startup or an established enterprise, the use of product development strategies can set the foundation for your offerings, or offer new opportunities for further market capture. A product development plan example from Asana covers Product development process: The 6 stages (with examples). Through all of this, understand that business analysis in new product development is key to the success of any new NPD.

A marketing strategy for new product example could be any of the following:

Create a referral funnel to convert previous customers into ambassadors.
Content marketing including blogs, emails, social media, etc.
Local Search Engine Optimization.
Giveaways, promotions, and offers.
Traditional marketing methods.

Product Strategy Templates

Melissa Perri at Medium, in the article What is Good Product Strategy?, defines the elements of product strategy as “a system of achievable goals and visions that work together to align the team around desirable outcomes for both the business and your customers.”. This means that you’re not just answering the question of ‘why’, but also of ‘what’ and ‘how’. The why is key, because as we’ll discuss further - the market must react to your product.

New product strategy examples accomplish an overall market vision to address product goals and initiatives through elements such as:

Competitive landscape
Target audience
Market analysis
Strengths and opportunities
Goals and key performance indicators
Tactical Resources Required

The types of product strategy range from cost, differentiation, focus, quality, and service. You can find a great breakdown of each here: The Straightforward Guide to Product Strategy, by Hubspot. They even have a great product strategy template. Speaking of templates, you can download a product strategy example pdf here. To summarize these great resources, a product strategy uses an established vision to create a roadmap for development based on customers, business, competitors, and the macro environment. The examples given by Hubspot are from Telfar and Nike.

For startups especially, having a product strategy in business plans is important because it sets your strategic vision by defining the direction and implementation. Since this is all new territory, versus established enterprises, this answers a much more fundamental question of problem / solution offering.

Product Strategy Examples & Product Development Strategy Examples

As mentioned above, product strategy examples include: cost, differentiation, focus, quality, and service strategies. In order to fully understand each of these, it’s important to understand each of the aspects that lead to great product strategies.

So, what leads to great product strategies?

Well, first and foremost, understanding your audience is key. Without understanding your target audience, you will not be able to create a product that is ready for the market - and this can lead you to spending time and money on something that does not have the effect on the market that you thought it would. The best product strategies focus on what the market requires, and do this by testing assumptions and hypotheses.

Next, you need to capture and listen to the data. As we just reviewed, market validation is really important! So if you’re not collecting and analyzing data, you cannot remain agile, meaning you cannot adjust on the fly. In order to develop a great product strategy you need to be able to adjust - and more specifically - allow the data to tell you when and how to adjust to the market.

Overall, this should help you accomplish specific goals - which means you have to set those goals! This is also where collecting data becomes very important. If you have no idea what you’re measuring, then it becomes worthless to measure. Understanding goals, and key performance indicators, before launching any product strategy is vital.

So first, target audience, next capture data, lastly establish goals.

New Product Development Strategy

As discussed previously, new product development strategy consists of several steps; inclusive of ideation, conceptual testing, market analysis and product-market fit, development, testing, and launch. For startups, this is the foundation of development - you’re establishing your solution to the problem you’ve identified in the market. For SMEs, you’re establishing an opportunity to increase market share and your total addressable market.

A new product strategy can help any stage business focus on key opportunities in the market, rather than wasting time and money on developing a product that ultimately does not resonate. However, a new product strategy can be risky for developed enterprises. There are less risky options to increase market share, which is why it’s important to recognize opportunities based on data, rather than untested assumptions. These are some of the product development strategy advantages and disadvantages. Before deciding if product development is the best strategy for you, make sure to understand the types of product development strategies.

So to recap, what are the four product development strategies? Well, according to the Ansoff Matrix, these are: Market Penetration, Product Development, Market Development, and Diversification. Remember, these do not hold the same level of risk. Product Development and Diversification are typically more risky, whereas market penetration and market development are seen as less risky.

Idea Screening In New Product Development

How do you source new ideas while also assessing the opportunities?

New product strategy inputs and identifying opportunities go hand in hand. These inputs include idea generation, development, and evaluation. Understanding how to address the needs of the market are going to help you understand the opportunities for expansion. Without the development and evaluation, idea generation falls flat.

Typically, the standard is that there are 8 stages of new product development. There are other models, such as 10 or 12 steps, but the 8 stages are more widely accepted and utilized. The 8 stages of new product development process with examples can be found from Quickbooks, here. To summarize, there 8 stages are:

Get an Idea
Screen your New Product Ideas
Develop and Test Your Product Concept
Product Concept Testing
Overall Business Analysis
Product Development
Test Marketing
Product Launch

Overall, market development strategies are broken down beyond product development and new product strategies. New product strategies are always foundational for startups, since this is the initial offer of a company. New product strategies also provide expansion opportunities for established businesses, which is key to growing a business rather than remaining stagnant. What’s best for your company depends on a variety of factors - including having a clear vision, understanding the market and the opportunity, your level of risk aversion, and the resource requirements.

Startup and SME Growth

Sometimes, all you need is a little guidance.

Argona Partners offers hourly consulting with business experts across a wide range of industries and specialties, and provides an outside perspective to accelerating your business.

Curious how Argona Partners can help you grow your business? Check out our consulting services! Argona offers strategy, transformation, design, and general business consulting/ These services help you discover opportunities, analyze them, strategize, implement, and grow your business!

If you’d actually like downloadable content, send us a message and let us know! We’re always looking to create the best resources to help our fellow entrepreneurs.

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