Product Management

IBS – Mumbai (Powai)

Anjan Mukherjee
+91 9920418121
anjanmukherjee1601@gmail.com
 Familiarisation
• Name
• Where are you from (Location)
• Academic background
• What prompted you to choose Marketing
• Any previous work experience
• Your role in the SIP organization
• How has the SIP exposure added value to you
• Your expectations from my sessions
 Syllabus
Introduction

Role & scope of product manager

Understanding the nature of markets and products

Market planning

New products – The importance of innovations

Product portfolio analysis

Pricing, distribution and promotion decisions

The product audit

INTRODUCTION TO PRODUCT
MANAGEMENT
 Overview
• Responsibilities of product manager (PM).
• Differences between product and general marketing
management.
• Marketing organization:
• Product-focused organizations.
• Market-focused organizations.
• Functionally-focused organizations.
• Critical skills of PM.
• Changes in marketing organizations.
So what is a product??
 What is a Product
Product refers to all kinds of physical goods & intangible
services that a company offers to its customers

OR

A product is anything that can offered to market for

attention, acquisition, use, consumption that might satisfy a
want or need.
 Product Types

Tangible Intangible
products products

GOODS SEVICES
Features of product

tangibility
Associated
attributes
Intangible
Features of attributes
product

Exchange Customer
value satisfaction
 Levels of product

Unexpected features Potential product

Luxury features Augmented product

Expected features Expected product

Basic features
Generic product

Basic product Core benefit

• Core product or Core benefit - that is why the consumer is actually buying,
eg. Mobile phone for communication, cosmetics are bought with the hope of becoming fair &
lovely

• Generic or Basic product – this will have features, design, a quality level, a brand
name and packaging

• Expected product - a set of attributes and conditions normally expected by

consumers when they buy the product,
eg. Mobile phone – easy to operate, long lasting battery, ring-tone etc
• Augmented product – by offering additional consumer services & benefits,
eg. Colgate Motion – a battery run tooth brush, Suitcase with wheels

• Potential product (tomorrow’s product)– contains all possible augmentations &

transformations that the product might undergo in future,
eg. Robot for domestic work, Honda Motor Co displayed the humanoid Robot called “ASIMO” in
Auto Expo
Classifying Products

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

 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
Heterogeneou
s
 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
Specialty Products
 High price tag relative to
convenience & shopping
products
 Consumption at the same rate as
shopping products but
consumers are much more
selective
Unsought Products
 Purchase is unplanned -result of
marketer’s actions.
 Purchase decisions occur when customer
is exposed to promotional activity, like
salesperson’s 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 purchaser’s 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

children’s 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 Mix
 The assortment of products that a company offers to a market
 Width – how many different product lines?
 Length – the number of items in the product mix
 Depth – The no. of variants offered in a product line
 Consistency – how closely the product lines are related in usage
Product Line & Product Mix
• Product Line
LAMPS
•Table
•Ceiling
•Track
•Desk
 • Product Mix
Produc Produc Produc
t Line t Line t Line
1 2 3
LAMPS TABLES CHAIRS
•Table •Kitchen •Dining Room
•Ceiling •Dining Room •Living Room
•Track •End •Bedroom
•Desk •Coffee •Outdoor
•Outdoor •Desk
•Conference
•Computer
CONCEPTUALIZATION OF
PRODUCT MIX
WIDTH

Tata Motors Tata Steel Tata Tea Tata DTH

D
BUS BARS GEMINI
TEA
E
Truck PLATES

CARS P

A wide product mix facilitates one stop shopping T

PRODUCT MIX EXAMPLE
Width (# of product lines)

HAIR SALTY DENTA SOFT

SNACKS L DRINKS
CARE CARE
Shampoo Chips Tooth Brush Cola

Conditioner Tooth Paste Root Beer

Nuts
Dental Floss Fruit Soda
Hair Spray

Crackers
Factors influencing change in
product mix
 Changes in market demand
 Cost of production
 Quantity of production
 Changes in company desire
 Competitors actions and reactions
Product mix strategies
 Expansion of product mix
 Contracting or dropping the product mix
 Alteration of existing product s
 Trading up/trading down strategies
So what is 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.
Product Management
 Planning
 Forecasting
 Marketing of products of a company is
product management
Objectives of product management
 To design product strategies
 To spot market opportunities
 To develop strategies for each stage of product life
cycle
 To generate new product ideas
Who is a product manager?
The Product Manager (PM) is responsible for the
strategy, roadmap, and feature definition of a product or
product line. The role involves working with cross-
functional teams and may include marketing, forecasting,
and profit and loss (P&L) responsibilities.
 Product manager

• The planning activities related to the management of

product(s) or product line.
• Analyzing the market & turning this information into
marketing objectives & strategies for the product.

• Obtaining organizational support for the marketing

plan.
• Involve coordinating with other areas of the firm.
• Involve in internal marketing of the product – obtain
assistance & support of more senior managers in the firm.

• Analyzing potential partner relationship for the

product.
What Is A Product Manager?
Product Management is a strategic and business-oriented
role, focused on delivering solutions to market needs.

Product Managers...
‣ Identify profitable opportunities that meet market
‣ needs
Launch products into the market
‣ Oversee products already in the
‣ market
Wind down products that no longer meet market needs
Understands The Market
‣ Communicates with customers & prospective customers
‣ Conducts usability tests
‣ Surveys
‣ Keeps an ongoing record of compliments/complaints
‣ Actually uses the product regularly
Develops Market-Based Product
Strategies
‣ Research, research, research
‣ Is aware of, and understands, the competition...
‣ ... but is not just slavishly copying their feature sets
‣ Don’t feed The Blob by creating bloatware!
Creates Relevant, Usable
Documentation
‣ BRD: Business Requirements Document - Identifies business problems,
‣ solutions
MRD: Market Requirements Document - Functional, non-functional
‣ requirements
PRD: Product Requirements Document - Feature details, user interface, flow
‣ FSD: Functional Specifications Document - Engineers, screen by screen
‣ Note: Not every company uses these acronyms--or docs--in the same way!

Image source:
http://www.library.cornell.edu/olinuris/ref/eng185dwb.h
tml
Brings Products Into (And Out Of)
The Market
‣ Your job is to meet market demands and actually make it to market
‣ Realize that pioneering doesn’t always pay…
‣ But understand the importance of not falling behind the curve
‣ Timing is crucial

Image source: http://www.ioffer.com/selling/daylily120

Develops Customer Relationships
The Means... The 5-C Method...
‣ Face to face ‣ Clear, not jargon
‣ Email ‣ Concise, not convoluted
‣ Blog ‣ Confident, not weasel words
‣ Telephone ‣ Courteous
‣ Social networks ‣ Completely understands the
issue

Image source:
Image source: http://www.relenet.com/ http://www.nytimes.com/slideshow/2008/01/04/nytfrontpage/20070104POD_index.html
Bridges Every Department That
Touches Product
‣ Sales
‣ Marketing Communications
‣ Engineering
‣ Design
‣ Customer Service
‣ QA
‣ Operations
The Product Manager’s Role: To
Avoid This
What Else Does A Product Manager
Do?
‣ Manages the brand
‣ Generates sales leads
‣ Responsible for the profit & loss of the product
‣ Brings new products to life... maximizes profits in existing
products... winds down unsuccessful products
‣ Champions the product, internally and externally
Product Manager’s Potential Interactions
Agency media department
Company media department
Suppliers Media sales reps
Advertis-
Trad Manufactur- ing
ing and agency Media
Suppliers e Premium
distribution suppliers
Research Premium
and Promotion screening Store
development services testing Sampling
Couponing

Product Packagin
Legal
manager g

Designers
Purchasin Researchers
Fiscal g

Market Publicity Suppliers

research
Sales
Research
suppliers Trad
e
 Product vs General Marketing
Management

Product General Marketing

Management Mgmt
Scope of Narrow: Single Broad: Portfolio of
responsibility product or product products
line
Nature of decision Mainly tactical Mainly strategic
making
Time horizon Short-run(annual or Long-run
shorter)
Skills of a Product Manager
 Negotiation
 Team- work
 Communication
 Analytical Abilities
 Critical skills of product management
• Negotiation
• Product manager must be persuasive & able to influence
the management.
• Teamwork
• Product manager must synthesize information from a
variety departments.
• Communication skills
• Product manager communicates the product/brand to
internal & external parties.
• Analytical ability
• Product manager needs to analyze & interpret all the
figures such as sales targets, share vs competition, e.g.
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 life-
time value
 Increased global competition
 Changes affecting product management

• The web
• New channel distribution, communication medium, & creating a
community around a brand.
• customer acquisition and retention.
• part of the brand building and will affect many facets of the
product manager’s job.

• The data explosion

• Increase the use of IT - effective marketing today requires
sophisticated information management.
• For consumer goods better time for market shares, sales and
distribution. (Eg: Scanner ).
• Laptop computer guide transmission of competitor information.
• Use of “data mining’ software and traffic data.
Changes affecting product management
• The increased emphasis on brands
• Brand is the greatest assets of a company.
• Focus on brand equity.

• Changes in the balance of market power

• Involvement in IT partners between manufacturers and
sellers both has equal access to sales and market share
data.
• The balance power in distribution channels has shifted
from the manufacturer to retailer.
• Consumers & retailers hold bigger marker power.
Changes affecting product management

• Increased importance of customer retention

programs
• Company focus on the lifetime-value-of-a-customer concept.
• Customer services and satisfaction programs, advertising
and promotion programs.

• Increased global competition

• Not appropriate organization structure .
• Obtain experience & knowledge about how a variety of
cultures conduct business.
• Forming trade blocks (Eg: European Union, South America,
economy free – trade zone).
Types of Organizations
 Product Focused
 Market Focused
 Functionally Focused
 Product-Focused
Structure
Head of
company/division

Manufacturing Marketing Corporate

Finance
communications

Marketing Product
Support
Research management

Manager of Manager of Manager of

product A product B 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 organizations
• Used where different products use the same channel
distribution.

• Product Manager acts as a “mini-CEO” by taking

responsibility for the overall health of the brand.

• A well-defined hierarchy within the product management

system will developed. (refer to the hierarchy structure)

• Key roles are assigned to assistant and associate product

managers
• Assistant PM - market & share forecasting, budgeting,
coordinating with production, executing promotion, packaging, etc.
• Associate PM – more freedom to develop brand extension.
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
Sales Corporate
Development
Communications
&
Marketing

Product Channel Public Trade

Marketing
Marketing Merchandising Relations Shows

- Specification
- Cross Product Programs - Channel Promotions - Organize Press Tours - Trade Shows
- Positioning
- Road Shows - Channel Advertising - Press Communications
- Pricing
- Seminars - Coop Advertising - Editorial Opportunities
- Spokesperson
- Third Party promotions
Internal & External - Events
- Promotions
- Creative Services
- Advertising
- Product Strategy
- Product Analysis
-Anything Cross
Functional
-Keep communication
flow going
GM’s New Organizational
Structure Ron Zarrella
VP & group executive, North American Operations

John Middlebrook Phil Guarascio Roy Roberts

John Middlebrook William Lovejoy
VP & GM, VP & GM, advertis- VP & GM, field
Support staff group VP & GM, service
vehicle brand ing & corp. mktg. sales service &
directors parts operations
marketing parts

Division marketing
Regional general Service parts
general managers
manager(s)
(6)
organization

Brand services Regional Regional

Regional Regional
Brand teams managers divisional
support service parts
manager manager manager
marketing
manager
Marketing area
managers

Area sales Area service Area parts

manager manager manager
Market-Focused
Organization
Head of the
company/division

Corporate
Manufacturing Marketing Finance
communications

Manager Manager Manager

, market , market , market
A B C
Market Focused
 Market can be clearly segmented by
channel, industry, buyer behavior,
region, customer size
 Useful when there are differences in
buyer behavior – different marketing
strategies and tactics are used.
 Hierarchy - VP Marketing – Assistant
VP – Consumer marketing, AVP-
Business Marketing
Market Focused
 Advantages –
 Focus on Customer
 Managers have better knowledge
of company’s product lines
 Disadvantages-
• Profit focus is lost
• Financial responsibilities not
clear
• Conflict between Product
Managers
Marketing Organization: Regional
Bell Operating Company
Vice president, marketing

Assistant vice president, Assistant vice president, Assistant vice president,

consumer marketing business marketing interindustry
marketing

Marketing planning and

Product management Carrier marketing
product development

Operations and sales Product management Operator services

Customer billing Operations

Revenue and
Directory products
market forecasting
Functionally-Focused
Organization
Head of the
company/division

Corporate
Manufacturing Marketing Finance
communications

Product Sales Marketing

marketing Advertising
promotion research
Functionally Focused
Organisations
 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 organizations
• Align the company by marketing functions.

• No single person is responsible for the day-to-day

health of a product.

• CEO and VP make marketing strategy decisions.

• Strategies are implemented through discussion and

coordination among the functional areas.

• Works well when the company is producing only two

products.
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
• Who is ultimately responsible for
the product?
FUNCTIONALLY-FOCUSED ORGANIZATIONS
• Advantages:
• Administrative simple – the groups are designed to be
parallel to normal marketing activities.
• Specialization.
• Well-coordinated.

• Disadvantages:
• Who is ultimately responsible for the product?
• Substantial time in solving problems.
• Focused only on functional development.
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 VP, Marketing VP, Experience

Management Technology Design

Director, Director,
Director, Director Director Creative Multimedia
Research , Cohort , Cohort Development Production
1 2

Director, Director, Director, Director,

Marketing Asset Customer Service Marketing Customer
Management Systems Delivery Systems Database
Brands are much more than logos
 So what is a brand?

A traditional scenario of market

Company A Product / services

Consumer
Company B

Company C

In a traditional market scenario, the company is catering to the

consumer.
The number of competitors are small.
In these markets the companies can come with advanced
technologies and other strategies to capture more market share.
(The size and power of the players is important.)
 So what is a brand?

Company A
Product / services
Company B Consumer

Company C

In complex markets, the differences between companies are not

much.
The companies can not differentiate much themselves from others
on the basis of quality and technology etc. factors as all the
companies are competent enough.
This scenario explains the need for the differentiation for the
companies.
 So what is a brand?

Branding is an effort to give a unique identity to the

company’s products and create emotional
associations with consumers.

It is a form of marketing.
A brand is a set of associations that are linked to a
product range, a division, or company.
These associations reside in the memory of
customers.
These associations help customers understand
what the brand or company is,
why it is potentially relevant to them,
how it is different or similar to other
products made by the company,
and how it is similar or different from
competitor’s products.
 So what is a brand?
Branding is a combined effort of the company which is projected to
the consumer.

Brand
Marketing

Company Consumer

Design
 So what is a brand?

What a brand means to common

person ?
In 'blind' taste tests, people prefer
the taste of Pepsi over the taste of
Coke. However, if the test is not
'blind' and the tasters know which
beverage is which, they prefer the
taste of Coke over Pepsi! That is the
emotional power of a brand. The
Coca-Cola brand has the power to
actually change an individual's
taste!

Coca-Cola is the no.1 brand in the

world.
The first shape that was registered is
the coca cola bottle.
 So what is a brand?
(1) Products and services have become so alike that they fail to
distinguish themselves by their quality, efficacy, reliability, assurance
and care. Brands add emotion and trust to these products and services,
thus providing clues that simplify consumers’ choice.
(2) These added emotions and trust help create a relationship between
brands and consumers, which ensures consumers’ loyalty to the brands.
(3) Brands create aspirational lifestyles based on these consumer
relationships. Associating oneself with a brand transfers these lifestyles
onto consumers.
(4) The branded lifestyles extol values over and above the brands’
product or service category that allow the brands to be extended into
other product and service categories. Thus saving companies the
trouble and costs of developing new brands, while entering new
lucrative markets.
(5) The combination of emotions, relationships, lifestyles and values
allows brand owners to charge a price premium for their products and
services, which otherwise are barely distinguishable from generics.
 So what is a brand?

Product Packaging
Websites

logo
Company
Product A

Product B
Advertisements
A brand is a promise. A promise to achieve certain results, deliver a
certain experience, or act in a certain way. A promise that is conveyed by
everything people see, hear, touch, taste or smell about your business.
 Competitive Positioning

• Position is a reflection of a company’s market share

1. Market leader
2. Market challenger
3. Market follower
4. Nicher

• Why is it important to understand the competitive

positioning:
 to understand how various firms are positioned
in the market, and deduce with strategies they
are likely to follow and how they will react when
attacked by other

 to understand where the company is currently positioned

and to decide where it wants to be positioned in the
future (shapes nature and quantity of resources required
and strategies pursued).
1. Market leader

MAIN FEATURES:
• Largest market share;
• Products/services/companies that set out standards
for price, quality, innovation, communication, etc.
• Shapes nature of competition

MAIN STRATEGIES:
•Attack the market – create new version or
increase frequency of usage

•Defend the position – regular innovation, larger

ranges, price cutting and discount
increased promotions.
2. Market challenger

MAIN FEATURES:
• Aspire leadership.
• May be number 2, 3 or 4 in the market
• Actively seek market share
• Use aggressive strategies to take over

MAIN STRATEGIES:
•Attack the market – using pricing, new product attributes,
increase advertising spent.

•Attack rivals – special offers and limited edition, offer

superior competitive advantage.

•Maintain status quo

3. Market follower

MAIN FEATURES:
• Have low market shares.
• Do not hold the resources to be considered serious
competitors.
• Are no threat to market leader or challengers
• Often adopt me-too strategies (i.e. imitating) when
leader takes initiative.

MAIN STRATEGIES:
• Avoid hostile attack on rivals

• Copy the market leader and provide good quality-products

that are well differentiated.

• Focus on differentiation and profits, and not on market share.

4. Nicher

MAIN FEATURES:
•Are specialists.
•Select market segments within target markets that
the larger companies choose not to exploit.
•Develop specialized marketing mixes – designed
to address specific needs.
•Threatened by economic downturns – customers stop
buying to buy more affordable products/services.
•Also vulnerable to preferences changes and competition
innovation.

MAIN STRATEGIES:
• Provide high levels of specialization
- geographic, product, service, customer group.

• Provide tight fit between market needs and the

organization's resources.
THANK YOU