This strategy deals with what you will sell to generate revenue. It covers areas such as product development and product brand. In your previous research, you have investigated which of your products or services gives you the most sales and the highest profitability.

Using this information, you can break down the total revenue goal that you have for your business (for example, the next 12 months), according to which product line will deliver the results.

Describe Your Product

To help give you a clear idea of what market segment your product is aimed at (low, middle or upper segments), and to serve as a framework for future product development, describe your product range. For example, here is the description that Steve from Top Shelf Groceries used for his product lines:

Top Shelf Groceries offers a quality product which matches the expectancy of its customer. It offers value for money and provides specialty items that are not readily available in other locations.

This statement provides Steve with a number of guidelines:

  • His products are of a higher quality that his customer has come to expect
  • They provide value for money
  • Specialty, premium items not readily available elsewhere

Any future products Steve is considering selling in his business must meet the criteria of his description. If not, then he knows from his research that the chances of selling the product successfully may not be as well as he had hoped. His product description statement reflects his customer and their buyer behavior, as well as the quality of his products.

Allocate Your Time To What Sells

Once you have described your products or services in a statement, allocate a percentage of your total planned revenue to each. Use your past performance for each product line to see which area made the most in sales.

This information, combined with any research that has helped to highlight potential areas of growth (along with your own ‘gut-feel’), will help to create these percentages. These percentages will help you stay focused on what brings you the results.

Here are Steve’s results:

Product
Lines Revenue

Green Goods 41%
Fresh Goods 21%
Meat 25%
Deli 8%
Other 5%
TOTAL 100%

“I must monitor my sales to watch which product line gives me the most sales, and use that information to tailor my promotions.”

Product Development Strategy

Once you have described your products and made a list of them, you will need to create a product development strategy. In order to stay competitive and exciting for your customer, you will need to introduce new products for them. It doesn’t have to be big – just enough to stay in the game and keep your advantage.

An example of a product development strategy that McDonald’s has instigated has been their fresh food and salads options in their menus. Since 2003, the company has recognized the need to meet the needs of the growing portion of the population that take a keen interest in what food they eat. This development of their product range has kept them relevant in a changing society.

What emerging trends in the industry (refer to your research) are there? What new products or services should you plan on introducing to meet the growing demand for a product?

When developing this part of your product strategy, there might be some other issues that you need to be aware of. Depending on where you are in the world, there may be changing tariffs with international trade that may mean an increase in overseas competition, or an increase or decrease in costs to import/export product overseas.

For Steve, he needed to be aware of quality control and freshness in relation to his products. His business could not afford to promote products that were any less in quality than those he already sold.

This is what Steve prepared for his Product Strategy:

Top Shelf Groceres – Product Development Strategy

I have found that my customers are asking for organic foods. Even though the food I sell is of a high standard, I will introduce a range of organic foods to meet their needs. I will start small, and only introduce products that already sell well in the store, so I do not risk much of my business.

Once introduced, I will monitor the sales, and if it performs well, I will slowly introduce other product lines. My task will be to research which products have the best chance of succeeding, and ensure that I price them accordingly.

No matter what products or services you choose to develop, you must always maintain and grow your brand and reputation you have become known for. If it is delivering great food, then stick to it. If it is providing premium services, then don’t drop the standard. The long-term gain by remaining true to your position in the market-place, and in the minds of your customer, will far outweigh any short-term benefit by selling a product not suited to the rest of your product mix.

Think of all the areas that surround your products – quality control, product development, etc. Make sure you plan for the future with your strategy. Is there a product line that needs to be researched, to find out where the opportunity lies? Can you create a product from your knowledge of the industry or service? Could this product help other people in any way?

Like this post? Subscribe to my RSS feed and get loads more!