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 Core productproduct

Expected productExpected product

Augmented productAugmented product

Potential Product

What’s 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

ShoppingHomogenous

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 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

Installations

Accessory Equipment

Business Products

Business Products

Process Materials Supplies

Business Services

Business Products

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 Manager’s Potential Interactions

Sales

Designers Researchers

Premium suppliers Premium screening Store testing Sampling Couponing

Media

Advertis-ing

agency

Packaging

Promotion services

Purchasing

Publicity

Legal

Fiscal

Market research

Manufactur-ing and

distribution

Research and

development

ProductProduct managermanager

Suppliers

Trade

Suppliers

TradeResearch suppliers

Suppliers

Agency media department Company media department Media sales reps

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 life-time value

Increased global competition

Marketing Planning

A marketing plan is a written document containing the guidelines for the business center’s 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 StructureHead of

company/division

Corporate communications

FinanceMarketingManufacturing

Manager of product A

Manager of product C

Manager of product B

Marketing Research

SupportProduct

management

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 Product MarketingMarketing MarketingMarketing Public Public

RelationsRelationsTrade Trade ShowsShows

Channel Channel MerchandisingMerchandising

Product Product Development Development & Marketing& Marketing

SalesSales CorporateCorporate CommunicationsCommunications

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

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

- Trade Shows- Organize Press Tours- Press Communications- Editorial Opportunities

- Channel Promotions- Channel Advertising- Coop Advertising

Market-Focused Organization

Head of the company/division

Manufacturing MarketingCorporate

communicationsFinance

Manager, market B

Manager, market A

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, 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

Assistant vice president, consumer marketing

Product management

Operations and sales

Customer billing

Revenue and market forecasting

Assistant vice president, business marketing

Marketing planning and product development

Product management

Operations

Directory products

Assistant vice president, interindustry marketing

Carrier marketing

Operator services

Vice president, marketing

Functionally-Focused Organization

Head of the company/division

Manufacturing MarketingCorporate

communicationsFinance

AdvertisingProduct

marketingSales

promotionMarketing 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

Merchandising

Consumer administration

Restructuring the Adaptive Marketing Organization

Chief Marketing Officer

VP, Customer Management

VP, Experience Design

Director, Marketing

Delivery Systems

Director, Customer Service

Systems

Director, Customer Database

Director, Marketing Asset

Management

VP, Marketing Technology

Director, Cohort 2

Director, Cohort 1

Director, Research

Director, Multimedia Production

Director, Creative

Development

GM’s New Organizational StructureRon Zarrella

VP & group executive, North American Operations

John MiddlebrookVP & GM, vehicle brand marketing

Phil GuarascioVP & GM, advertis-

ing & corp. mktg.

William Lovejoy VP & GM, service

parts operations

John MiddlebrookSupport staff group

directors

Roy RobertsVP & GM, field

sales service & parts

Regional general manager(s)

Marketing area managers

Area service manager

Regional divisional marketing manager

Service parts organization

Brand services managersBrand teams

Division marketing general managers

(6)

Area parts manager

Area sales manager

Regional service

manager

Regional support manager

Regional parts

manager