Week 2 Introduction to Product Management STUDENT COPY PDF

Chapter 1 – Introduction to Product Management BMPRABMX- Product and Brand Management At the end of the session, the students shall be able to: Learn the Concept of Product Explain the Concepts related to the Product Discuss the Definition and Scope of Product Management Understand Marke...

Chapter 1 – Introduction to Product Management BMPRABMX- Product and Brand Management At the end of the session, the students shall be able to: Learn the Concept of Product Explain the Concepts related to the Product Discuss the Definition and Scope of Product Management Understand Marketing Organization Illustrate the Types of Marketing Organization Product Technically, a product can be defined as anything that is produced, whether as the result of generation, growth, labor, or thought, or by the operation of involuntary causes; as, the products of the season, or of the farm; the products of manufactures; the products of the brain. In manufacturing, products are purchased as raw materials and sold as finished goods. Product In project management, products are the formal definition of the project deliverables that make up or contribute to delivering the objectives of the project. In marketing, a product is anything that can be offered to a market that might satisfy a want or need. Concepts related to Product Product Development Product development is the process of designing, building, operating, and maintaining a good or service. Product development adds things like pricing, marketing, and customer support to the technology to create a complete product. Product development is performed by a multi-disciplinary team whose goal is building, operating, and maintaining the product. Team members may include product managers, product developers, project managers, product operations engineers, customer support managers, quality assurance managers, user interface design engineers, marketers, financial personnel, graphic artists, etc. New Product A new product can be defined as a product that is new to the market. Two possible ways to define newness: 1. New to company products, meaning that the company has never developed or sold this product before, but other companies might have. 2. New to market products, and these are products that were never seen before in the marketplace. Six Categories of New Products 1. New-to-the-world product or really-new products: these are innovative products that create completely new markets. Examples include digital music players, such as Apple’s iPod, that have spawned new delivery methods (downloadable music) and new media (podcasting), personal computers, and the internet. 2. New product lines: these products are not new to the marketplace but are usually new to the company. Companies develop these products to enter an already established market for the first time. Often these products are similar to competitors’ products already available in the market but with some level of difference. A good example of a new product line is Microsoft’s entry into the video gaming system market with their Xbox. 3. Additions to existing product lines (product line extensions): these are usually new additions to the company, but they fit under an existing line of products that the company makes. This type of new product can be seen in Procter and Gamble’s Tide product line which contains many product variations of the basic Tide product. 4. Product improvements: these products offer improved quality, features or performance of an existing product. They might also act as replacements of existing products. Crest regularly promotes "new and improved" versions of its toothpaste for which the fluoride formula has undergone simple modifications. 5. Re-positioning: these are existing products targeted to new markets, it involves introducing a new application for an existing product that is aimed towards a new market segment. Aspirin was re-positioned as blood thinner although it was also used to relieve headaches. 6. Cost reductions: these products offer similar benefits at a lower cost. They are not new products to the company from the consumer point of view, but from design and production standpoint, they usually represent significant change. The Strategic Elements of Product Development Strategic Elements - provide a framework to guide management through product development and help them focus on what is most important. Three (3) Strategic Elements of Product Development 1. New products process - is the procedure that takes the new product idea through concept evaluation, product development, launch, and postlaunch. 2. Product innovation charter - It ensures that the new product team develops products that are in line with firm objectives and strategies and that address marketplace opportunities. 3. Product portfolio management - helps the firm assess which new products would be the best additions to the existing product line, given both financial and strategic objectives Product Management Product management is an organizational life cycle function within a company dealing with the planning or marketing of a product or products at all stages of the product life cycle. A discipline about what the product should be. Product management and product marketing are different yet complementary efforts with the objective of maximizing sales revenues, market share, and profit margins. Product Management The product management process starts with the type of company one works for. There may be companies that are: 1. Technology-driven 2. Company driven 3. Sales-driven 4. Market-driven Goal of Product Management 1. Ensure a market-driven “whole” product offering 2. Establish competitive and profitable pricing models 3. Ensure the existence and support of product distribution 4. Create effective marketing promotions that generate revenue.  1. Product Planning - the ongoing process of identifying and articulating market requirements that define a Aspects of product’s feature set. o Defining New Products Product o Gathering Market Requirements o Building Product Roadmaps, Management Particularly Technology Roadmaps o Product Life Cycle Considerations o Product Differentiation  2. Product Marketing deals with the first of the “4P’s” of marketing, which are Product, Pricing, Place, and Promotion. Aspects of deals with more outbound marketing tasks Product encompasses market research, Management pricing, promotion, distribution, customer care, your brand image, and much more Aspects of Product Management 2. Product Marketing oProduct Positioning and Outbound Messaging oPromoting the Product Externally with Press, Customers, and Partners oMonitoring the Competition  serve as the “voice of the customer” are advocates for the customer’s needs and desires Four main tasks (day-to-day works) 1. Developing the market requirements document 2. Managing the product feature list 3. Coordinating activities of different functional groups 4. Participating in and/or running the launch and post-launch marketing activities for a product. Product Manager Role of a Product Manager he/she has to guide a team that is charged with a product line contribution as a business unit; builds products from existing ideas, and helps to develop new ideas based on the industry experience and his contact with customers and prospects; he possesses a unique blend of business and technical savvy; a big-picture vision, and the drive to make that vision a reality; he spends time in the market to understand the problems of the customers, and finds innovative solutions for the broader market. Product Management Scope A product manager’s responsibilities include the following: 1. Defining and planning product lines and product enhancements 2. Managing product contracts and sales. Setting strategic direction based on customer needs and business goals 3. Interpreting strategic goals into operational tasks 4. Making proposals to senior management regarding implications of the proposed plan 5. Serving as a representative to internal and external clients. Taking the leading establishing tactical plans and objectives Product Management Scope 6. Developing and implementing administrative and operational matters ensuring achievement of objectives 7. Evaluating risks and trade-offs 8. Proposing contingency plans 9. Analyzing business processes and creating applications to improve or support those processes 10. Branding Product Management Scope 11. Working with graphic designers to create the look and feel 12. Defining navigational flow and user experience 13. Defining feature sets and scooping releases Product managers are accountable to executive management for the overall product direction, key decisions, product budget (and sometimes even the complete product P&L), ensuring that the final product meets specifications, and evangelizing the product to internal and external stakeholders. Product managers also have accountability to users for feature sets, navigation, quality, and overall experience. Marketing Organization Marketing Organization is an organization that markets one or more systems, applications, and/or components produced by a development organization to potential customer organizations. The typical responsibilities of a Marketing Organization are to: 1. Market applications to the customer organization(s). 2. Provide change requests based on customer feedback to the development organization. 3. Act as a source of requirements during the performance of the requirements identification task. Types of Marketing Organization 1. Function Oriented 2. Market Oriented 3. Product Oriented 4. Customer Oriented 5. Combined Type Types of Marketing Organization 1. Function Oriented This is the most simple and common type of organization. Under this type, the activities are grouped on the basis of function, such as production planning, marketing research, advertising and sales. There are separate managers for specific functions and each of these functions is further subdivided into various sub-functions like product planning, marketing research, advertising, sales promotion, physical distribution, customer service, etc. Types of Marketing Organization 2. Market Oriented This type of structure is used by big companies who serve a large number of customers spread over very large territory. The structure is divided into regional basis and specific areas are assigned to different persons. 3. Product Oriented This type of structure is best suited to industries producing different products or brands. Every department can be controlled efficiently by the department in charge, rendering thereon, an additional benefit of making it possible for evaluation and comparison of the performance of the different departments. Types of Marketing Organization 4. Customer Oriented Under this type of structure, concentration is on the type of customers. Separate groups are designated responsible for marketing classes of their different classes of customers such as: (a) Distributors (b) Retailers (c) Customers Types of Marketing Organization 5. Combined Type In practice, one normally comes across a combination such as: (a) Functional with territorial structure, or (b) Functional with product-oriented structure, or (c) Market-oriented with product structure. Summary: A product can be defined as anything that is produced. Product management is an organizational life cycle function within a company dealing with the planning or marketing of a product or products at all stages of the product life cycle. Product Management is becoming an important function of marketing. Product development is the process of designing, building, operating, and maintaining a good or service. Product development adds things like pricing, marketing, and customer support to the technology to create a complete product. The power of innovation is revealed in numerous studies, which show that companies leading their industries attribute about half of their revenues to products developed in the most recent five years. Summary: Depending on the company size and history, product management has a variety of functions and roles. Product Planning is the ongoing process of identifying and articulating market requirements that define a product’s feature set. Product management as a discipline is about what the product should be. Product managers are advocates for the customer’s needs and desires. Product marketing deals with the first of the “4P’s” of marketing, which are Product, Pricing, Place, and Promotion. Marketing Organization is an organization that markets one or more systems, applications, and/or components produced by a development organization to potential customer organizations. References: The Six Categories of New Products (linkedin.com) Panesar, Ashwani. Product and Brand Management. Excel Books Private Limited