Product management

Product management is an organizational lifecycle function

within a company dealing with the planning, forecasting, and
production, or marketing of a product or products at all stages
of the product lifecycle.

Similarly, Product Lifecycle Management (PLM) integrates

people, data, processes and business systems. It provides
product information for companies and their extended supply
chain enterprise.
 TYPES OF PRODUCT
Convenience products

Convenience products involve items that don’t require

much customer effort or forethought. Food staples often
fall into this category, because customers can buy them
nearly everywhere and at roughly the same prices.
Marketing convenience products can be a challenge if
there are many similar products competing for the
customer’s attention and driving down the price.
 Shopping products
Customers are willing to invest time and effort to buy
shopping products. For example, a customer might
compare ingredients, prices and safety information for
a variety of deodorants before making a final
purchase. Often, the most effective marketing
approach is to use advertising and heavy promotions
to develop brand preference and loyalty among the
customers.
 Specialty products

Specialty products require significant thought or

effort. For example, a well-known luxury car model
might be available at just a few local dealerships,
meaning an interested customer has restricted
options. Specialty products tend to be expensive,
durable goods, often involving authorized
dealerships and personal selling.
 Unsought products
Unsought products are those items for which
customers aren’t aware of or don’t often think about
them. New products that have no brand recognition
fall under this classification, for example, certain
types of insurance. The marketing problems
presented by an unsought product are as follows.
First, you must convince customers they need the
product or service. Second, you must convince
customers to buy the product or service from you and
 PRODUCT MIX
The complete range of products present within a
company is known as the product mix. In any multi
brand organizations, there are numerous products
present. None of the organizations wants to take the
risk of being present in the market with a single
product. If the company has only a single product, then
the demand of the product will be too great or the
company does not have the resources to expand the
Usually all the top companies have multiple
products. Coca cola, Apple, Microsoft, Nestle,
Hindustan Uniliver, Pharmaceutical companies, so
on and so forth. These companies need to have a
wide product portfolio to be present in the market
and to have a sustainable business model. The
combination of products that they have in their
product portfolio can be the product mix.
As explained, product mix is a combination of total
product lines within a company. A company like
HUL has numerous product lines like shampoos,
detergents, soaps etc. The combination of all
these product lines is the product mix.
COMPONENTS OF PRODUCT MIX

Length of the product mix

If a company has 4 product lines, and 10 products

within the product line, then the length of the product
mix is 40. Thus, the total number of products against
the total number of product lines forms the length of
the product mix. This equation is also known as
product line length.
 Width of the product mix
Where product line length refers to the total number
of product lines and the products within the product
lines, the width of the product mix is equal to the
number of product lines within a company. Thus,
taking the above example, if there are 4 product lines
within the company, and 10 products within each
product line, then the product line width is 4 only.
Thus, product line width is a depiction of the number
of product lines which a company has.
 Depth of the product mix
It is fairly easy to understand what depth of the
product mix will mean. Where length and width
were a function of the number of product lines, the
depth of the product mix is the total number of
products within a product line. Thus if a company
has 4 product lines and 10 products in each product
line, then the product mix depth is 10.
 Product Line
The product line is a subset of the product mix. The
product line generally refers to a type of product within
an organization. As the organization can have a
number of different types of products, it will have
similar number of product lines. Thus, in Nestle, there
are milk based products like milkmaid, Food products
like Maggi, chocolate products like Kitkat and other
such product lines. Thus, Nestle’s product mix will be
a combination of the all the product lines within the
 Product line consistency
The lesser the variations between the products, the
more is the product line consistency. For example,
Amul has various product lines which are all dairy
related. So that product mix consistency is high. But
Samsung as a company has many product lines
which are completely independent of each other. Like
Air conditioners, televisions, smart phones, home
appliances, so on and so forth. Thus the product mix
consistency is low in Samsung.
 Product innovation

Product innovation is the creation and subsequent

introduction of a good or service that is either new, or
an improved version of previous goods or services.
This is broader than the normally accepted definition
of innovation that includes the invention of new
products which, in this context, are still considered
innovative.
 Advantages of Product Innovation
Numerous advantages of product innovation include:

Growth, expansion and gaining a competitive advantage: A
business that is capable of differentiating their product from
other businesses in the same industry to large extent will be
able to reap vast amount of profits.


Brand switching: Businesses that once again are able to
successfully utilize product innovation will thus entice
customers from rival brands to buy its product instead as it
becomes more attractive to the customer.
 Disadvantages of Product Innovation
Numerous disadvantages of product innovation include:

Counter Effect of Product Innovation: Not all businesses/
competitors do not always create products/ resources from
scratch, but rather substitute different resources to create
productive innovation and this could have an opposite effect of
what the business/ competitor is trying to do. Thus, some of
these businesses/ competitors could be driven out of the
industry and will not last long enough to enhance their product
during their time in the industry.
 High Costs and High Risk of Failure: When a business attempts to
innovate its product, it will inject lots of capital and time into it, which
requires severe experimentation. Constant experimentation could result
in failure for the business and will also cause the business to incur
significantly higher costs. Furthermore, it could take years for a business
to successfully innovate a product, thus resulting in an uncertain return.

 Disrupting the outside world: For product innovation to occur, the

business will have to change the way it runs, and this could lead to the
breaking down of relationships between the business and its customers,
suppliers and business partners.
Why marketing strategies and innovations
are equally important with product
innovations?
Many companies still believe that introducing new products is the
only way a company can grow. While this strategy has done wonders
for many, success doesn’t solely depend on product innovation.
Marketing innovation has in fact proved to be immensely valuable in
a company’s growth. For proof, look no further than Google, Toyota
and Apple, all extremely profitable companies growing at a rapid rate.
Their success is not only down to product innovation, such as the
Toyota Prius or Google Glass, but also marketing innovation such as
The nature of product innovation assumes that potential
customers know very little about the newly released item. And
this is where marketing comes in. The key to innovative
marketing is that the message of the product must cut through
to attract and engage potential customers.
Take 3M for example. Its Post-it product had to be launched not
once but twice to get the attention it wanted from customers.
The first time round the product flunked in the market, so much
so that the company discontinued the line. The second time,
after employing the aggressive marketing tactic of offering
enormous amounts of free samples, 3M was able to turn around
its re-order client list from almost zero to a whopping 90%.  
 Steps of product innovation in marketing

First step: start with the benefit of innovation. Innovation works

in business only when it creates a benefit. That benefit could be
a cost savings or efficiency that benefits the producer or
distributor, or a cost savings or anything else that benefits the
customer. So your first step is to understand and demonstrate
the benefit.
Some people talk of it as a pain point. In this context, the
innovation has to solve some problem. Who has the problem it
solves? How many people or organizations have it? How much
is it worth to them?
Second step: after you demonstrate the benefit (or the pain
point), then you can start counting the target market that
results: as above, how many target customers, why and how
do they benefit, where are they etc.

Third step: Third step is to figure out what message to send

them and how to send it. That is about target marketing,
segmentation, etc. This too is a classic process, the process
of developing a marketing strategy. The same basic process
applies to a new innovation as well as to most other business
plans: what message, what media, etc.
Fourth step: The fourth step is the estimate of how
many of those target market points will adapt this
technology and how fast. Put it into numbers. Make
your estimate based on adaptation, quantify it into
units and prices, and you have solved the problem.
 The Product Life Cycle
A new product progresses through a sequence of
stages from introduction to growth, maturity, and
decline. This sequence is known as the product life
cycle and is associated with changes in the marketing
situation, thus impacting the marketing strategy and
the marketing mix. The product revenue and profits
can be plotted as a function of the life-cycle stages as
shown in the graph below:
Introduction Stage
In the introduction stage, the firm seeks to build product awareness and develop
a market for the product. The impact on the marketing mix is as follows:

•Product branding and quality level is established, and intellectual property

protection such as patents and trademarks are obtained.

•Pricing may be low penetration pricing to build market share rapidly, or high
skim pricing to recover development costs.

•Distribution is selective until consumers show acceptance of the product.

•Promotion is aimed at innovators and early adopters. Marketing

communications seeks to build product awareness and to educate potential
consumers about the product.
Growth Stage
In the growth stage, the firm seeks to build brand preference and increase
market share.

•Product quality is maintained and additional features and support services

may be added.

•Pricing is maintained as the firm enjoys increasing demand with little

competition.

•Distribution channels are added as demand increases and customers

accept the product.

•Promotion is aimed at a broader audience.

Maturity Stage
At maturity, the strong growth in sales diminishes. Competition may appear
with similar products. The primary objective at this point is to defend market
share while maximizing profit.

•Product features may be enhanced to differentiate the product from that of

competitors.

•Pricing may be lower because of the new competition.

•Distribution becomes more intensive and incentives may be offered to

encourage preference over competing products.

•Promotion emphasizes product differentiation.

Decline Stage
As sales decline, the firm has several options:

•Maintain the product, possibly rejuvenating it by adding new

features and finding new uses.

•Harvest the product - reduce costs and continue to offer it,

possibly to a loyal niche segment.

•Discontinue the product, liquidating remaining inventory or

selling it to another firm that is willing to continue the product.
 Product life-cycle management

Product life-cycle management (PLM) is the succession of

strategies used by business management as a product goes
through its life-cycle. The conditions in which a product is sold
changes over time and must be managed as it moves through
its succession of stages.
 Importance of Product life-cycle management

The goals of Product Life Cycle management (PLM) are to reduce time to
market, improve product quality, reduce prototyping costs, identify
potential sales opportunities and revenue contributions, and reduce
environmental impacts at end-of-life. To create successful new products
the company must understand its customers, markets and competitors.
Product Lifecycle Management (PLM) integrates people, data, processes
and business systems. It provides product information for companies and
their extended supply chain enterprise. PLM solutions help organizations
overcome the increased complexity and engineering challenges of
developing new products for the global competitive markets.