But what is product strategy? And what is product marketing?
This briefing is an excerpt taken from Econsultancy’s Product Strategy and Marketing Best Practice Guide.
What is product strategy?
As with marketing strategy, product strategy should flow from the wider business strategy. In a business with digital products and/or services, both marketing and product strategy should be intertwined with a close relationship between the two.
The product strategy should translate the wider business strategy into a high-level plan for how the product can fulfil the objectives of the business, incorporating a definition of who the product is being built for (the personas), the vision for how the product will serve the needs of those personas and what the product goals are through its lifecycle. A good product strategy creates alignment and direction, enabling all those involved with the product (including development, marketing, sales, customer success) to see how their work is contributing towards the achievement of organisational goals.
Figure 1: Linking business strategy to marketing and product
Collaborative strategy creation
“Strategy creation is now a collaborative process. You can’t create marketing and product strategy in isolation – it needs to be joined up from the start.”
Fiona Spooner, Global Marketing Director, B2C, Financial Times
Product management and product owners
Product management has steadily grown in importance as a discipline and role within organisations. Traditionally, product managers deal with the product across its entire lifecycle from development and business cases, through to planning, forecasting, launching and pricing, and they will even get involved with the product marketing. McKinsey has described product managers as “the glue that bind the many functions that touch a product – engineering, design, customer success, sales, marketing, operations, finance, legal, and more”. It continues: “They not only own the decisions about what gets built but also influence every aspect of how it gets built and launched.”
The natural connection between marketing and product functions within organisations will often be through product managers.
Former Head of the Government Digital Service Mike Bracken discusses the rise of product management in an article by the BBC’s former Head of Product Development, Nic Newman. Bracken describes how the discipline needs to maintain a potentially difficult balance between two key audiences: “Firstly, [have a relationship] with an end user; with the people who are consuming or paying for the end product and [secondly] … maintain a good working relationship and take a bunch of stakeholders with them through the product development cycle.”
Product Management business 280 Group has set out a simple job description for the Product Manager as being “responsible for the product planning and execution throughout the product lifecycle”. This includes: “Gathering and prioritising product and customer requirements, defining the product vision, and working closely with engineering, sales, marketing and support to ensure revenue and customer satisfaction goals are met.
“The product manager also ensures that the product supports the company’s overall strategy and goals.”
In short, product management is a more strategic role that helps to translate business strategy and goals into a product vision and strategy in a way that can articulate to the product team the business value and intent of what they are creating.
They may well utilise user research to reveal key customer insights and needs and will use that to align a product team around a comprehensive product roadmap, prioritising what features to build next. They will also act as the champion for the product and the product team, ensuring ongoing alignment around priorities and direction. As well as possessing good strategic skills, a good product manager will be able to influence key stakeholders, will understand customer needs and be knowledgeable about the market in which the product operates.
As product management platform business Product Board describes it: “A good product manager is expected to be a customer spokesman, product visionary, team champion, and a strategic leader.”
Both product managers and product owners act to generate value for both customers and the organisation by building, improving and optimising product features, so what is the difference between a product manager and a product owner?
In simple terms, where product managers are mainly customer facing, product owners work primarily with the development team, ensuring that their work and processes align with the product roadmap and that the value of the product is optimised through the work of that team. A key part of this is managing the backlog, creating and prioritising actionable user stories and arranging them in the backlog, but product owners also make sure that the processes make clear what the team need to work on next, that the backlog is aligned to the roadmap, and that the voice of the customer is represented to the development team in daily work.
The product owner should feed back to the product manager, enabling them to validate and update the roadmap as necessary. They will work closely with the development team, attending all daily meetings and key ceremonies such as retrospectives and sprint planning meetings.
As Product Board articulates it: “While the product manager has a highly strategic role and is accountable for the whole product lifecycle, the role of the product owner entails a more narrow focus and closer work with the development team. The role of the product manager is, among other things, customer facing. Conversely, the product owner works primarily with the production team to ensure that development processes align with the product roadmap.”
Simply put, the product manager decides what products to build next, and the product owner helps the development team to build the products in the best way possible.
“Product people can learn a lot from marketers and marketers can learn a lot from product teams. There is a real opportunity in finding more integrated ways of working.”
Nick Haley, Product Design Principal, Idean
What is product marketing?
HubSpot has defined product marketing as: “The process of bringing a product to market, promoting it, and selling it to a customer. Product marketing involves understanding the product’s target audience and using strategic positioning and messaging to boost revenue and demand for the product.”
Product marketing essentially sits at the intersection of product, marketing and sales. Where traditional marketing will concentrate on promoting a business or a brand as a whole, product marketing is much more focused on promoting the product itself. The former acts to position a brand, raise awareness, increase reach, build an image around the brand, create campaigns to develop leads and prospects, and ultimately to drive revenue. The latter works from an understanding of the motivations and frustrations of a target audience and seeks to position the product as the optimal solution.
Like marketing, product marketing requires a good appreciation of customer needs, the market and the competition, but is more focused on how specific products can serve those requirements and on highlighting specific features in relation to specific customer pain points, problems or needs. In this sense, product marketing is a subset of marketing, but is also closely connected to (and needs to be aligned with) product and sales.
Figure 2: Product marketing
As digital strategist Shane Barker describes it, the benefits of product marketing are that teams can rapidly introduce products to the market and to target audiences, highlight key features and advantages and how the product can address customer pain points. Product marketing should work hand in hand with brand marketing, and companies may want to change the emphasis placed on each over time according to their needs.
Going beyond messaging
“Your brand is what people think of your company as a result of everything it does and says. So messaging can’t be disconnected from the product. The story you want to bring to market needs to be baked into everything from the start.”
Andy Whitlock, Founder, The Human Half
Product marketers have five key areas of responsibility:
- Customer: Identify the target customer and buyer persona for the product.
- Fit: Ensure that the product meets a need or needs of the target customer.
- Position: Determine the product’s positioning in the market in comparison to competitors, based on expert knowledge of the product and the market, and ensure that this positioning stays relevant over time and in response to changes in the market.
- Marketing: Write and action a successful product marketing strategy.
- Sales: Collaborate with the sales function to attract the target customers to the product.
While marketing managers are concerned with building the brand, defining and executing the right communications strategy and raising awareness and interest around a brand, product marketers are more concerned with understanding competitive contexts, customer needs and deep knowledge of the product itself in order to position it as the best solution. This requires them to work closely with product teams to drive demand and usage of products; product marketers may often sit between product functions and traditional marketers.
Figure 3: The relationship between marketing, product marketing, and product teams
Yet, as more than one of the interviewees for Econsultancy’s Product Strategy and Marketing Best Practice Guide pointed out, it is wrong to think of product marketing as a perfect hybrid between product and marketing functions. While the discipline may well sit in between and take elements from both, it is really about marketing expanding into product and product experience territories.
Defining product marketing
“In order to do product marketing well, you need to understand the product really well – the user journeys, the flows, the unique features, how the experience is shaped for the customer.”
Gregor Young, Group Product Manager, Financial Times
Product marketing goes beyond customer acquisition and retention and into developing an understanding of user flows and journeys through an app store, the brand website and also the product or service itself. It takes account of the full customer journey including how users use a product or service to achieve their goals. This enables product marketers to use experience and behavioural metrics from the product itself as well as the journey outside of the product in order to identify the real levers that can support growth.
This also means that product marketers are relentless in their focus on metrics and understanding user needs and interaction. Where product teams will be focused on shipping new features and optimising user flows, product marketers will be looking at interaction metrics to enhance performance and growth. Where marketing teams will be more focused on campaigns, product marketers have a more continuous programme of optimisation, improvements and experiments. Yet both marketing and product marketing are needed to capitalise on the full range of opportunity to ensure that digitised products and service are as successful as possible.
The 4Ps and the role of product within marketing
Product is of course one of the famous ‘4Ps’ of marketing (product, place, price and promotion). Yet each of the 4Ps is changing dramatically in response to digitisation and the impact of technology:
- Product: With more products becoming digitised services, marketers now need to consider not only brand and positioning, but how to best map product features and benefits to customer needs, and how customer usage of the product itself can support other marketing objectives (such as awareness and acquisition).
- Place: Digital has rapidly increased the number of channels, distribution and presentation opportunities that are available for marketers to get products and services in front of customers in meaningful ways.
- Price: More than ever, pricing strategies are an integral part of product marketing, and the flexibility and range of options that marketers have around pricing has never been greater.
- Promotion: Digital has resulted in an explosion of promotion possibilities, and data has brought new opportunities to better understand customer needs, questions and journeys, not only to optimise communications but also product usage and advocacy.
As digital has expanded the possibilities surrounding each of the 4Ps, it becomes increasingly important for marketers to work more closely with adjacent teams, notably sales, technology and product.