Introduction to Product Management

Definition
Product refers to all kinds of physical goods & intangible services that a company offers to its customers

Product Levels

Core product

Expected product Augmented product

Potential Product

Whats a Product?
Good
Service

Idea

Classifying Products

Consumer vs. Business

Categories of Products
Consumer Convenience Shopping Specialty Unsought Emergency Business/Industrial Raw Materials Processed Materials Advanced Components Product Components Maintenance, Repair & Operating (MRO) Products

Consumer Products

Convenience
Staples Impulse Emergency

Convenience Products
Appeal to a very large market segment Low involvement Consumed regularly Purchased frequently Examples -food, cleaning products, personal care products, groceries etc.

Consumer Products
Shopping
Homogenous Heterogeneous

Shopping Products
Purchase & consume less frequently than convenience products. Relatively more expensive than convenience products High Involvement -spend more time locating them Possess additional psychological benefits raise perceived status level Examples - apparels, personal services, electronics & furnishings

Consumer Products

Specialty

Specialty Products
High price tag relative to convenience & shopping products Consumption at the same rate as shopping products but consumers are much more selective

Consumer Products

Unsought Emergency

Unsought Products
Purchase is unplanned -result of marketers actions. Purchase decisions occur when customer is exposed to promotional activity, like salespersons persuasion or incentives like special discounts Promotional activities result in Impulse Purchasing

Emergency Products
Customer seeks these due to sudden events Pre-purchase planning is not considered. Often the decision is one of convenience (e.g., whatever works to fix a problem) or personal fulfilment (e.g., perceived to improve purchasers image)

Business Products

Raw Materials Component Parts

Industrial Products Advanced Components

Use basic components to produce products that offer a significant function needed within a larger product By itself an advanced component does not stand alone as a final product Motherboard without memory chips, microprocessor would have little value.

Product Component
Products used in assembly of a final product These can also function as stand alone products. Dice included as part of a childrens board game

Business Products

Installations Accessory Equipment

Business Products

Process Materials Supplies

Business Products

Business Services

Maintenance, Repair & Operating Products

Products used to assist with the operation of the organization but are not directly used in producing goods or services
Office supplies, parts for a truck fleet, natural gas to heat a factory

Product Managers Potential Interactions

Suppliers Trade Suppliers Research and development Manufacturing and distribution Advertising agency Agency media department Company media department Media sales reps Media

Promotion services

Premium suppliers Premium screening Store testing Sampling Couponing

Legal

Product manager

Packagin g Designers Researchers

Fiscal

Purchasin g Market research Publicity Sales Trade

Suppliers

Research suppliers

Skills of a Product Manager

Negotiation Team- work Communication Analytical Abilities

Responsibilities
Planning activities related to the product/product line Get organization support for the marketing plans & co-ordinate with R&D, Market Research, finance etc.

Challenges of Product Management

Internet - Data Explosion Increased focus on building brands Changes in balance of market power from the manufacturer to product to consumer being king Increased focus on customer retention programs and customer lifetime value Increased global competition

Marketing Planning
A marketing plan is a written document containing the guidelines for the business centers marketing plan & allocations over the planning period

Objectives
Define current situation and how we got there Define Problems & Opportunities facing the business Establish objectives Define strategies & programs necessary to achieve these objectives Pinpoint responsibility for achieving objectives Establish customer- competitor orientation

Types of Organizations
Product Focused Market Focused Functionally Focused

Product-Focused Structure
Head of company/division

Manufacturing

Marketing

Finance

Corporate communications

Marketing Research

Product management

Support

Manager of product A

Manager of product B

Manager of product C

Product Focused
Head of a Division a profit center Product Managers report to Marketing Managers Each Product Manager responsible for a single product

Product Focused
Advantages
Clarity of role & responsibility Responsible for success/failure

Disadvantages Narrow focus on product & bottom lines, rather than customer needs Overlap calls to same customers for different of responsibilities- sales force duplicate products

Adobe Systems Marketing Organization

Product Development & Marketing Sales Corporate Communications

Product Marketing
- Specification - Positioning - Pricing - Spokesperson Internal & External - Promotions - Advertising - Product Strategy - Product Analysis - Anything Cross Functional - Keep communication flow going

Marketing

Channel Merchandising
- Channel Promotions - Channel Advertising - Coop Advertising

Public Relations
- Organize Press Tours - Press Communications - Editorial Opportunities

Trade Shows
- Trade Shows

- Cross Product Programs - Road Shows - Seminars - Third Party promotions - Events - Creative Services

Market-Focused Organization
Head of the company/division

Manufacturing

Marketing

Finance

Corporate communications

Manager, market A

Manager, market B

Manager, market C

Market Focused
Market can be clearly segmented by channel, industry, buyer behavior, region, customer size Hierarchy - VP Marketing Assistant VP Consumer marketing, AVPBusiness Marketing

Market Focused
Advantages
Focus on Customer Managers have better knowledge of companys product lines

DisadvantagesProfit focus is lost Financial responsibilities not clear Conflict between Product Managers

Marketing Organization: Regional Bell Operating Company

Vice president, marketing Assistant vice president, consumer marketing Assistant vice president, business marketing Assistant vice president, interindustry marketing

Product management

Marketing planning and product development

Carrier marketing

Operations and sales

Product management

Operator services

Customer billing

Operations

Revenue and market forecasting

Directory products

Functionally-Focused Organization
Head of the company/division

Manufacturing

Marketing

Finance

Corporate communications

Product marketing

Advertising

Sales promotion

Marketing research

Functionally Focused
Head of Company/Division has the Manufacturing, Marketing, Finance & Corporate Communications reporting in to him Marketing managers responsible for Product, Advertising, Sales Promotions & Market Research

Functionally Focused
Advantages
Administratively simple Managers have better knowledge of their functional areas

Disadvantages As company adds products increased co-ordination difficult Profit Focus is lost

Marketing Organization: Toy Manufacturer

Vice president, marketing

Marketing support

Advertising and public relations

Publications

Consumer administration

Merchandising

Restructuring the Adaptive Marketing Organization

Chief Marketing Officer

VP, Customer Management

VP, Marketing Technology

VP, Experience Design

Director, Research

Director, Cohort 1

Director, Cohort 2

Director, Creative Development

Director, Multimedia Production

Director, Marketing Asset Management

Director, Customer Service Systems

Director, Marketing Delivery Systems

Director, Customer Database