Have tried to collate potential growth strategies which can be utilized by product managers to manage growth of products at various stages in the product's lifecycle.
2. Product Development Process
Finding Target Consumer’s need through-
Shallow observation
Depth Probing (Voice of Customer)
Above process will provide large chunk of information, this data will
be converted to consumer insights by data analysis
Mapping Consumer’s needs serves as technical specifications for
Product Development
Segmentation
Segmentation creates a consumption barrier
Product with a specification attractive to one group (target Consumer)
The same product will be un-attractive for the other groups (non-
target) due to consumer barrier
3. Growth Strategy
Once the product is launched, a firm’s performance is measured by –
Absolute growth – performance between any two time period
Relative Growth- Growth relative to competition, growth in Market
Share
In order to grow further a company have two options-
Internal Leverage – Intrasegment and Intersegment Growth
External Leverage
4. Intra-segment Growth- Overcoming the Perceptual
Barrier
Market perception initiated, by offering a product (fixed in its dimensions)
For a select target segment and creating a value chain
Intra-segment Growth Options-
a. Leveraging the existing Value Chain to its full potential before embarking
upon something new
b. Add Sales from sticking to the existing segment, exhausting to its full
potential
Idea is to increase sales by increasing usage through suggesting creative
usage (increase usage frequency, alternative usage, increasing per usage
consumption) of the same product to the same consumers.
Least risk strategy of consumption expansion with existing product and existing
market
Has least investment burden as product and market are unaltered
Expansion gives opportunity for productivity gains from learning effects
Key Drivers-
a. Marketing Research- unveils potential applications
b. Brand Communication – Conveys the idea effectively
Sales
Revenue
= No. of
Consumers
(Same)
X Quantity consumed per person
(increased, by creative
suggestions for more usage)
X Price
(Same)
5. Intersegment Growth- Overcoming Consumption
Barrier
As a firm grow, it excels in its skills and competencies in value chain activities
When the existing value chain and the existing target consumer segment is
completely exhausted, we look at other segments within the same market
Crossing over to new segments requires adaptation to the product to overcome
consumption barriers separating the two segments
The product category remains the same with slight modifications.
The strategy is to leverage the currently served market and the company
competencies and strengths
Less risky option since the product category is same with little change in
operations to increase its participation in the market by creating product
variations
The strategy calls for extending the product line thus called line extension
strategy
Modifications Needed-
a. Product Modifications- adaptations created in the product
b. Brand Modifications – adaptations created in brand identity to match with the
extended products
Sales
Revenue
= No. of Consumers (more,
from different segments)
X Quantity consumed
per person
X Price
(different
points)
6. Product Modifications
Variations in a product could be created by modifying its dimensions
like-
Ingredient- Computers with different microprocessors
Form- Powder, bar, flakes, liquid etc
Size- Availability in various size, number of users allowed
Color- Notional differences
Flavours- different flavors provide different stimulations and
increase usage frequency
Packaging- Variations in aesthetics
Application or Usage – Suggested applications, chocolate before
Shubh kaam, chocolate as Rakhi gift, chocolate on Salary day
(Pahli tareekh), Chocolate on an achievement and so on.
7. External Leverage- Brand Extensions
When you exhaust your internal resources completely and leveraged
all the intersegments too, you still look for further growth
The obvious strategy now is to cross over to new market, leveraging
the asset created outside the balance sheet i.e. the BRAND
The brand name contributes to extension by adding preexisting
image to extension
It adds associations of superior functionality, emotions and user
imagery and thus pull consumers to create a favorable response
The brand as it exists in consumer’s mind must be kept in mind while
considering for brand extension, leveraging brand strengths and
minimize crossover of its weakness
8. Types of Brand Extensions
Product Form Extensions- A different product form constituting entirely
a different product category
Companion Product- To capitalise on prodcut complimentarily, the
consumer may view both products jointly and hence provide scope for
launching brand extension, eg- toothpaste and toothbrush
Customer Franchise- To meet the needs of a specific customer group,
eg- variety of products meant for infants from J&J
Company expertise- based on the core competency of the company, eg-
Variety of products from Honda – scooters, engines, lawn mowers, cars
are all based on the expertise of the company i.e. engines
Brand Distinction- Some brands achieve distinction in some unique
attribute, feature or benefit which gets associated with the brand, like
parachute for cocnut nourishment has helped the company to leverage
the brand in hair cream, cooking oil, shampoo etc.
Brand Prestige- brand exclusivity or prestige bestows great extension
opportunities
9. Brand Extension possibility
Brand extension is lucrative stategy, but not every extension is a
success story
Brand extension merges the brand with a new product
If the associations of consumers with the product are different with
the nature of new product, it will create a contradiction and confuse
the consumer about the perception created by the brand originally,
this will lead to destruction of the brand identity
Such situation is dangerous and leads to destruction of brand equity
Hence below mentioned characteristics must be taken care of for
brand extension-
Associative Structure (Presence)
Favourability of Associations (Positivity)
Distinctiveness of Associations (Uniqueness)
10. Brand Extendability
There are 5 types of brands, depending on their nature, their
extendibility range from least extendible (Product Brand) to highly
extendibility (Philosophy Brand)
The
Product
Brand
Formula
Brand
Know how
brands
Interest
Brand
Philosophy
Brand
11. Technology Products/services
Management of Technology Products/services are different from
FMCG products
Technology products/services can be categorized into B2B and
B2C and both have different features-
B2C – Consumer Solutions
Have strong network externalities
effect
Have early mover advantage
Once the product is accepted
and sets a standard, it grows
exponentially
Once the standard is created, its
hard to eliminate
Leadership position is hard to
dethrone
B2B – Enterprise Solutions
Long term investment
Have strategic implications
Includes high information
search
Involves high risk
Multiple decision makers
12. Product Lifecycle
Every product has 4 stages in its lifecycle- Intrduction, Growth,
Maturity and Decline
A product manager’s biggest challenge is to hold the product at its
Maturity stage as long as possible
https://www.thestreet.com/markets/commodities/product-life-cycle-14882534
13. Growth Strategy in Technology Products
At Introduction Stage-
Focus on building first mover advantage; Pre-empt the market. Enter early,
achieve fast-cycle product development, make early deals with key
customers and adopt penetration pricing.
Strategic Alliances: Firm will need the support of consumers, suppliers of
complements, even competitors. Not even the strongest companies can
afford to go it alone in a standards war.
Create high entry barriers
Focus on increasing adoption due to network effects
Compatibility with other products/softwares/platforms, to enjoy higher
network externalities
At growth stage-
Transition from niche market to mass market by lowering cost and
increasing quality
Increase Customer base
Invest in supporting infrastructure to facilitate growth
Sharing value created with allies
At Maturity stage-
Internal Leverage
External Leverage
Customer satisfaction and delight
14. Recommendation for Microsoft products
For microsoft products, growth strategies could be,
Different number of users per liscence, gets cheaper (per user) as
the users increase, allows users to share cost with friends and
provide more customers to the company
Freemium options like adobe
Pay as you use- payment for usage, duration wise and usage extent
(feature wise) different users may have requirements for different
features. Pay as per usage could be attractive amongst users at it
would reduce their overall cost
Tie ups with complimentary/related product’s firms to promote our
product
Influencer marketing