A Guide To Different Types Of Product Strategy

Product Strategy is the process of understanding the opportunities and threats in a market, and then deriving and implementing a product strategy that maximizes one’s chances for success. 

It includes:

a) Market segmentation (choosing which customer groups to target);

b) Positioning (placing the product so it stands out from its competitors);

c) Product development (selecting technologies, components, features etc.); and

d) Pricing (setting prices based on costs or market analysis).

Different Types Of Product Strategy are:

1. Differentiation Strategy

Companies approach this strategy through the development of product attributes that are valued by customers and for which they are willing to pay a premium. For example, Apple’s differentiation strategy is built on design, technology, simplicity of software, etc.

2. Focus Strategy

This involves targeting one or two market segments where the company has the capability to meet their needs effectively. By focusing on these areas, companies can develop deep expertise in these target segments and then leverage them across other market segments as well. This way, they will be able to enter new markets more quickly than if they had decided to diversify their portfolio with products from multiple markets. An example of a firm practicing this type of strategy is Marketo who focused exclusively on marketing software initially and now has one of the top marketing automation suites.

3. Scalable Strategy

This involves focusing on a specific product where there is a scalable business model present. This means that you can establish a significant market share for your product by going after a massive potential customer base. For instance, take Amazon as an example, they started out selling books by mail, but then expanded to sell music until eventually their growth exploded because of their scalable online platform. They can now deliver nearly anything to your door-step overnight if you want them too! From this perspective, companies which have been able to scale quickly do realize a competitive advantage over those who cannot realize such growth within a short period of time. The reason being that these companies are able to progress faster and maintain a competitive advantage over their competitors.

4. Enabling rapid growth in revenue and customers.

In order to have a scalable business model, one must have a scalable product(s) that can be easily distributed over various channels. In doing so, they are able to add customers at an exponential rate which results in a corresponding increase in revenues for the company. This makes it possible for businesses to grow extremely quickly with relatively fewer resources required. According to the Boston Consulting Group, only 8% of companies realize this type of explosive growth with most failing due to resource constraints and lack of scalability. They also go on to say that a larger market share is created from firms that offer products or services that scale efficiently rather than those who focus on providing niche products/services targeting small markets.

The established base of users acts as a source of growth through referrals, word-of-mouth marketing and organic search engine optimization. However, this is not the only way to achieve rapid user adoption. Many companies have reached significant levels of success by employing aggressive paid acquisition strategies.

5. Paid Acquisition

Paid acquisition can take many forms, but in its simplest definition, the acquiring company pays the target customer to use or buy their product. This contrasts with organic user acquisition where companies rely on non-paid strategies to achieve growth.

The most common form of paid user acquisition is advertising via Google Adwords and Facebook Ads. These platforms provide a cost-per-click (CPC) model for advertisers looking to promote their products/services within targeted audiences. The advertiser sets a bid that represents how much they are willing to pay per click and then either spends their daily budget or maximizes clicks within this allocated budget.

Thus a Product Strategy is required to optimize and manage the ad spend to achieve maximum growth.


Social media platforms such as Twitter or LinkedIn can be used for word of mouth marketing where we post updates about our product and services. It is vital that this is done in a consistent way, so that people recognize your brand and associate it with positivity. This strategy relies on sharing content which builds trust with users and gets them to eventually go from being passive readers to paying customers. Another form of organic user acquisition includes relationship building over social media platforms such as Facebook, Instagram and Snapchat through influencer marketing whereby brands collaborate with celebrities who have a large following online. This can lead to free promotion via posts containing your product/service link. This has become an effective, less expensive alternative to banner ads which are known to be ignored by users.

Not surprisingly, the world’s most famous social media platforms have already adopted this model of promotion through their use of hashtags – a special kind of metadata that allows you to label your posts on Facebook and Instagram so that they are easier for other people to find via search engines. By adding popular or relevant hashtags, it is more likely that your post will appear when others search for them. As per LinkedIn’s Head of Content Products, Micheal Albers , “Hashtags allow members in the professional space to quickly see who is talking about certain topics.”

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