Succeeding in Product Management

WHAT IS A PRODUCT ?

A product is anything that can offered to market for attention, acquisition ,use, consumption that might satisfy a want or need.

PRODUCTS

GOODS SEVICES

Tangible products

Intangible products

FEATURES OF PRODUCT

Features of product

Associated attributes

Intangible attributes

tangibility

Exchange value

Customer satisfaction

LEVELS OF PRODUCT

Potential product

Augmented product

Expected product

Generic product

Core benefit

Unexpected features

Luxury features

Expected features

Basic features

Basic product

CLASSIFYING PRODUCTS

Durable products

Consumer products,

Business products

DURABLE PRODUCTS

Durable

Non-durable

Services

CONSUMER PRODUCTS

ConvenienceProducts

ShoppingProducts

SpecialtyProducts

Unsought

Products

CONVENIENCE GOODS

Staples -

Emergency goods –

Impulse purchases –

Convenience goods – consumers use minimal effort for frequently purchased low cost items

SHOPPING PRODUCTSShopping goods - consumers make a considerable effort to evaluate … Consumers make product comparison(s), They seek information before purchase, they are not impulsive

Moderate substitutions are made

Product’s last a considerable time

Monetary & social costs may be high

TV’S AS A SHOPPING PRODUCT (2007 ---- 1950’S)Attribute-based Price-based

PICTURE SIZE

WARRANTYREMOTE CONTROL

LOW PRICEPlasma –LCD screen

observation

Homogeneous products select on price Heterogeneous products select on benefits

BUSINESS PRODUCTS

Materials and parts

Raw materials and parts

Manufactured materials and parts

Capitals items

1.installation

2.equiptment

Suppliers and business services

1.maitainance and repair items

2.operating suppliers

RAW MATERIALS

Farm products

Natural products

MANUFACTURED MATERIALS AND PARTS

CAPITALS ITEMS

1.installation 2.equiptment

SUPPLIERS AND BUSINESS SERVICES

1.mainteinance and repair items

2.operating suppliers

PRODUCT MANAGEMENT SUCCESS

THREE KEYS TO PRODUCT MANAGEMENT SUCCESS

As product managers you have a significant responsibility for the success of your company. It’s easy to get bogged down in the countless tasks that are thrown your way every day. With all the meetings, floods of email, and requirements to manage, the thought of spending time on areas of strategic focus can seem overwhelming. However, with planning and a little effort you can make the difference. Start by focusing on three simple, yet powerful, keys to success:

1. Know your market:

Get a clear understanding of the market where your products compete, and work diligently to stay out in front of new trends and technologies. Make customer calls and customer visits often. Work with the sales team; understand how they sell your products. Know what works. Know the weaknesses of the products (and take action to correct them). Understand why people pay (or don’t pay) for your products. Be the voice of the customer to your company.

THREE KEYS TO PRODUCT MANAGEMENT SUCCESS

2. Provide clear direction:

One of your key directives as a product manager is to provide clear direction to the engineering/development teams. Spend the time to write understandable and timely requirements and prioritize them effectively. Provide solid product design (with the help of good designers). Give clear direction and project confidence and your full support to the work the engineering is doing. Earn their trust. Inspire them to do great things. “Have their backs” with the rest of the company (i.e. be their outspoken supporter).

THREE KEYS TO PRODUCT MANAGEMENT SUCCESS

3. Launch successfully:

Work with the sales team to make sure they understand the new product and hit the ground running when it releases. After a successful launch, monitor the product’s uptake and financials and make sure it continues to succeed. This, of course, loops back to knowing your market and making sure your product meets the needs of the people in your market.

THREE KEYS TO PRODUCT MANAGEMENT SUCCESS

PRODUCT LIFE CYCLE STRATEGIES

THE PRODUCT LIFE CYCLE STRATEGIES:

PLC Stages

• Product development

• Introduction

• Growth

• Maturity

• Decline 23

PRODUCT LIFE CYCLE

Time

ProductDevelop-

ment

Introduction

Profits

Sales

Growth Maturity Decline

Losses/Investments ($)

Sales andProfits ($)

PRODUCT LIFE CYCLE APPLICATIONS

Product class has the longest life cycle (e.g., gas-powered cars)

Product form tends to have the standard PLC shape (e.g., dial telephone)

Brand can change quickly because of changing competitive attacks and responses (e.g., Tide, Cheer)

Style is a basic and distinctive mode of expression (e.g., formal clothing, Danish modern furniture)

Fashion is a popular style in a given field (e.g., business casual)

Fad is a fashion that enters quickly, is adopted quickly, and declines fast (e.g., pet rocks)

25

PRACTICAL PROBLEMS OF PLC

• Hard to identify which stage of the PLC the product is in.

• Hard to pinpoint when the product moves to the next stage.

• Hard to identify factors that affect product’s movement through stages.

• Hard to forecast sales level, length of each stage, and shape of PLC.

• Strategy is both a cause and result of the PLC.

26

PRODUCT LIFE-CYCLE STRATEGIES

The Product Life Cycle (PLC) has Five Stages

• Product Development, Introduction, Growth, Maturity, Decline

• Not all products follow this cycle: • Fads• Styles• Fashions

PRODUCT LIFE-CYCLE STRATEGIES

The product life cycle concept can be applied to a:

• Product class (soft drinks)• Product form (diet colas)• Brand (Diet Dr. Pepper)

• Using the PLC to forecast brand performance or to develop marketing strategies is problematic

PRODUCT LIFE-CYCLE STRATEGIES

Product development

Introduction

Growth

Maturity

Decline

Begins when the company develops a new-product idea

Sales are zero

Investment costs are high

Profits are negative

PLC Stages

PRODUCT LIFE-CYCLE STRATEGIES

Product development

Introduction

Growth

Maturity

Decline

Low sales

High cost per customer acquired

Negative profits

Innovators are targeted

Little competition

PLC Stages

MARKETING STRATEGIES: INTRODUCTION STAGE

Product – Offer a basic product

Price – Use cost-plus basis to set

Distribution – Build selective distribution

Advertising – Build awareness among early adopters and dealers/resellers

Sales Promotion – Heavy expenditures to create trial

PRODUCT LIFE-CYCLE STRATEGIES

Product development

Introduction

Growth

Maturity

Decline

Rapidly rising sales

Average cost per customer

Rising profits

Early adopters are targeted

Growing competition

PLC Stages

MARKETING STRATEGIES: GROWTH STAGE

Product – Offer product extensions, service, warrantyPrice – Penetration pricingDistribution – Build intensive distributionAdvertising – Build awareness and interest in the mass marketSales Promotion – Reduce expenditures to take advantage of consumer demand

PRODUCT LIFE-CYCLE STRATEGIES

Product development

Introduction

Growth

Maturity

Decline

Sales peak

Low cost per customer

High profits

Middle majority are targeted

Competition begins to decline

PLC Stages

MARKETING STRATEGIES: MATURITY STAGE

Product – Diversify brand and modelsPrice – Set to match or beat competitionDistribution – Build more intensive distributionAdvertising – Stress brand differences and benefitsSales Promotion – Increase to encourage brand switching

PRODUCT LIFE-CYCLE STRATEGIES

Product development

Introduction

Growth

Maturity

Decline

Declining sales

Low cost per customer

Declining profits

Laggards are targeted

Declining competition

PLC Stages