What are the three major strategies for developing an effective product mix?

The marketing mix is the set of controllable, tactical marketing tools that a company uses to produce a desired response from its target market. It consists of everything that a company can do to influence demand for its product. It is also a tool to help marketing planning and execution.

The four Ps of marketing: product, price, place and promotion

The marketing mix can be divided into four groups of variables commonly known as the four Ps:

1. Product: The goods and/or services offered by a company to its customers.
2. Price: The amount of money paid by customers to purchase the product.
3. Place (or distribution): The activities that make the product available to consumers.
4. Promotion: The activities that communicate the product’s features and benefits and persuade customers to purchase the product.

Marketing tools

Each of the four Ps has its own tools to contribute to the marketing mix:

• Product: variety, quality, design, features, brand name, packaging, services
• Price: list price, discounts, allowance, payment period, credit terms
• Place: channels, coverage, assortments, locations, inventory, transportation, logistics
• Promotion: advertising, personal selling, sales promotion, public relations

An effective marketing strategy combines the 4 Ps of the marketing mix. It is designed to meet the company’s marketing objectives by providing its customers with value. The 4 Ps of the marketing mix are related, and combine to establish the product’s position within its target markets.

Weaknesses of the marketing mix

The four Ps of the marketing mix have a number of weaknesses in that they omit or underemphasize some important marketing activities. For example, services are not explicitly mentioned, although they can be categorized as products (that is, service products). As well, other important marketing activities (such as packaging) are not specifically addressed but are placed within one of the four P groups.

Another key problem is that the four Ps focus on the seller’s view of the market. The buyer’s view should be marketing’s main concern.

The four Ps as the four Cs

The four Ps of the marketing mix can be reinterpreted as the four Cs. They put the customer’s interests (the buyer) ahead of the marketer’s interests (the seller).

• Customer solutions, not products: Customers want to buy value or a solution to their problems.
• Customer cost, not price: Customers want to know the total cost of acquiring, using and disposing of a product.
• Convenience, not place: Customers want products and services to be as convenient to purchase as possible.
• Communication, not promotion: Customers want two-way communication with the companies that make the product.

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To understand what your potential users need, you need to make user research an integral part of the product design and development lifecycle. Conduct a series of field studies and user interviews to understand who your users are and what they want. Use this information to define personas—archetypal models that reflect the most critical information about your target users. Well-researched personas will act as a proxy for the user.

Your product should deliver value to users. Image credit: leanstartup.

As Laura Klein, author of Lean Startup says, product teams tend to create descriptive personas, not predictive. Leveraging predictive personas makes product design much easier because by analyzing them, product teams learn not only what their users like and dislike, but also come to understand the exact factors that make a person want to become a user.

You might also like: How to Learn More About Your Users with a Contextual Inquiry.

2. Understand the problem

Problem definition plays a crucial role in product strategy. The product you design should help your users solve their problems. You need to not only identify the problem, but also ensure that this problem is worth solving (i.e. that your target audience really needs a solution for this problem and is willing to pay money for it). It’s critical to understand the core reason why you want to build a product (your business motivators) and then evaluate your product decisions in terms of the value they bring to your users (potential conversion).

You need to identify the sweet spot—when the user needs and business goals intersect.

3. Define your product vision

Product strategy defines a product’s journey. As with any journey, you have to have a vision for where you’re headed. Many product teams assume that product vision and product strategy are the same, but in reality, there are two related—but different—concepts. 

“Vision is the motivation for creating the product; strategy is a guide on how to do it properly.”

Vision is the high-level, ultimate view of where the business is going, and it’s the reason why you are making a product in the first place. Well-defined product vision becomes the north star for your organization. It makes everyone think big about the things they do when they work on a product.

Below are a few things to remember when defining product vision:

• Identify long-term goals. It’s easy to create a vision when you have an inspiring long-term goal (such as what the product will look like in 2 or 3 years). 
• Vision should be inspiring. When it comes to inspiration, it’s vital to get emotional buy-in from team members. That’s why your product vision should win the brain with facts and win the heart with emotions.
• It’s also important to identify your product vision and ensure that everyone in your team fully understands the global goal. Many organizations use video format for this purpose, as it’s much easier to convey the message that way.

4. Define the current state and target condition

For many organizations, it’s possible to define two states—current state (the state of your product experience today), and the target condition (the ultimate user experience toward which you’re aiming). Vision helps you define a destination (target condition). 

You can plan your route towards the target destination by focusing on precisely what you need to build. By setting the goal (challenge), you can adjust the direction of your product efforts. It’s essential to invest time in analyzing, measuring, and quantifying challenges before the team starts to work on your project.

This is highlighted well in Melissa Perri’s article on What is Good Product Strategy.

Caption: Product strategy creates a route between a current state and a target condition. Image credit: Melissa Perri.

5. State product design principles

Making product decisions is a risky business. No matter how hard you try, there will always be some degree of uncertainty that will make you doubt your decisions. However, you can simplify the decision-making process by introducing a simple yet very powerful tool—product design principles. Product design principles will help you define what good design means in your organization. Well-defined principles are genuine—they reflect your product design philosophy.

For example, one of the design principles of Medium (a popular blogging platform) is “direction over choice.” The Medium design team relied on this principle while they were working on the Medium editor. They purposely traded user interface (layout, type, and color choices) for guidance and direction. 

6. Stay in sync with other teams

No matter how good your product design is, it only exists if people know it and follow it. The product strategy should be the result of a cross-functional collaboration between core teams: design, development, marketing, and sales.

“When you ask any person in your organization what you’re building and why, you should get the same answer.”

7. Stay focused

Before you start working on a solution to a problem, you need to develop a deep understanding of the ultimate experience you’re aiming for. Many organizations get this step wrong. While they understand the problem, they think that including more and more features in their product will make them valuable for the target audience. As a result, they are bloating their products with useless, poorly designed features and compromising their user experience (this effect is known in the software world as feature creep).

When Apple introduced the first iPhone back in 2007, they built very few features but implemented them very well. One of the features that we find very important today, copy and paste, was missing in the first version of the iPhone. Copy and paste wasn’t included because it didn’t meet the team’s minimal intended experience. Instead of releasing a buggy feature, they launched the iPhone without, and added the feature only once it met their expectations for its experience.

“Product teams must realize that good product strategy is not about just shipping lots of features.”

A concept called Minimum Loveable Product suggests that it’s necessary to define the few essential functions and implement them very well, so users will actually use them and love them. Below, watch Steve Jobs explain the importance of saying no to feature requests:

8. Define the success metrics

It’s not enough to set a direction—it’s also essential to measure how fast you are moving towards the goal. Metrics help a team measure performance and know if they are on track.

If you’re looking for practical recommendations on how to choose proper metrics, I recommend starting with Objectives and Key Results, or OKRs. In this model, objectives are what you want your company to achieve, and key results are how you intend to measure that objective. What numbers would move? Objectives should be inspiring, while key results should be measurable. 

9. Execute the strategy

When you start building a new product, you have a threshold of knowledge. Missing pieces of information will prevent you from establishing an ideal product strategy on Day 1. But starting with solid goals and a willingness to experiment will help you create a well-defined strategy.

“Think of your product strategy not as something set in stone, but more like a living and breathing organism that grows together with your organization.”

Start primitively and build from there. Once you introduce your product strategy, the sooner you get feedback on it, the faster you can iterate.

The product strategy should also be revised systematically. Revise your metrics and adjust tactics when you get information about what works and what does not. 

You might also like: 3 Project Management Strategies to Prevent Scope Creep.

The Product Strategy Canvas

Similar to the Business Model Canvas, which helps identify gaps in a business model, the Product Strategy Canvas helps to challenge the product strategy that the organization wants to execute. Product strategy canvases help teams to structure all available information and develop a holistic approach to business strategy.

There are a couple of canvases that can be used for this. First is the Product Strategy Canvas created by Melissa Perri, which is an excellent tool for articulating product strategy. 

Product Strategy Canvas created by Melissa Perri.

The second is the Strategy Kernel Canvas (PDF) proposed by Chris Butler, which is an excellent tool for sparking a discussion around strategy. 

Strategy Kernel Canvas by Chris Butler.

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Product strategy defines the user experience

Product strategy should be your number one tool to justify user experience decisions. You must start every product design project by defining the experience that you want people to have with your product or service. 

Product strategy will make you focus on achieving the ultimate goal: delivering the right features with the right user experience for the right people.

How have you developed product strategies? Share your thoughts in the comments below.

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About the author

Nick Babich

Nick Babich is a developer, tech enthusiast, and UX lover. He's spent the last 10 years working in the software industry, with a specialized focus on development. He counts advertising, psychology, and cinema among his myriad interests.

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