On Product Strategy

There are three kinds of products:

• • Those with a benefit (the brand promise), with a support to the promise, and with tonality of communication – cosmetics, detergents, and most B2B products are of this kind.
  • Those without a benefit, but with a support to the promise, and tonality of communication – for instance certain biscuits, candies, etc.
  • And products with tonality only – like fragrances. Hugo Boss fragrances make a great example of how Procter & Gamble won applying strategic marketing in one of the toughest competitive environments out there.

It goes without saying that making strategic choices for each of the three product kinds implies different kinds of data and analytical methods.

What is the Product Strategy?

The product strategy is made of two parts:

• • Strategic statement
  • Support to the statement.

The strategic statement describes what the product is supposed to do, now and in the long-term, and it is created upon three core elements:

1. 1. Technical performance: What the product does under given usage conditions.
   2. Design: How the product looks like and works.
   3. Acceptance: The preference of customers.

For instance, the product strategy of an icon brand most of us know was:

[BRAND X] should support its positioning by a product which

provides performance superiority over major competition for the most important boilwash.

At washing temperatures of 60°C and below at least equal performance should be achieved vs. specialist brands.

The support to the statement proves, with reliable facts and data (gathered with marketing research), that the strategic direction is reasonable. It explains the strategic logic answering questions like Why superior performance?, and Why at 60° and below?

Aim of the product strategy

The very aim of the product strategy is to define the product performance in comparison to competitors.

It may refer to the whole market or just a segment of it and it can claim:

• • Superiority. Our product performance measured for given parameters beats the competitors
  • Equivalence. Our product performance measured for given parameters is not inferior to that of competitors
  • Proximity. Our product performance measured for given parameters lies within an acceptable range above or below the competitors

Product strategy and freedom of execution

The product strategy should give freedom of maneuver and at the same time define clearly the borders behind which stretching the brand performance is not a viable option.  Just pay attention to not define it too narrowly.

Ivory soap lost its market appeal because P&G did not leave enough room for maneuver saying Ivory soap had to:

• • Be 100% pure (actually 99 44/100%)
  • Have Ivopo (a proprietary perfume)
  • Float

Game over. All you can do is keep communicating the brand promise, but time plays against you.

Differentiate or die, wrote Jack Trout [1].

What is product restaging?

We speak of restaging when the product performance changes.

Restaging may require the modification of the product strategy, for instance after a substantial product improvement, like when a new product substitutes two products used, for instance, with different water temperatures.

Restaging helps to:

• • Regain the interest of the customer
  • Reconfirm the product superiority over competitors
  • Adapt the product endresult to changed consumption conditions

Recent examples of successful restaging are:

• • Dove’s bottles shaped like women’s body
  • S’well fashion water bottles

What is quality?

What does it mean “High-quality product”?

Quality is not a differentiating concept and therefore should not be used in strategic statements. In fact, it is never easy to show a relationship between product quality and sales rank.

A test conducted in Europe by a buying guide tested the quality of cars of the same category. Those ranked first, second and third in terms of product quality ranked 12th, 9th, and 16th in market share, respectively.

Forget unqualified terms and explain exactly what makes yours a quality product.

That is what distinguishes you, and you can work on it to differentiate you further from competitors.

 

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[1] Jack Trout, Differentiate or die. Wiley & Sons, Inc. 2000.