Product Management

Module 1 Session 1

Session Outline
After studying this session, you should be able to understand: 1. Concept of Product & New Product 2. Product classification and approaches 3. Types of Demand 4. Product Management- Meaning and objectives of product management 5. Outlining the role of a product manager 6. Discussing the different approach of product management via the organizational structure 7. Highlighting the skills needed in managing a product 8. Discussing the challenges facing product management 9. Services vs. Products

Product
Bundle of attributes both tangible and intangible including packaging, color, price, quality, brand plus the services and reputation of the seller. Anything that can be offered to satisfy a need or want.

New Product
Technological Breakthroughs: an anticancer drug, AIDS vaccine Product improvements: instant coffee replaces the usual brew coffee Product modification: revision in existing product line e.g. addition of a new flavor, new package, revised size Products new to the company: new to company but not new to market, imitative products Repositioning: existing products to new markets or segments Cost reductions: same product but prices reduced

Classification of products and approaches

Melvin T. Copeland in 1923 proposed 1.Convenience goods: least involvement of customer in terms of time devotion and money involved like salt, bread, butter. A. Staple goods: regularly purchased e.g. wheat, rice B. Impulse goods: no prior planning or display may provoke e.g. perfumes or magazines etc. C. Emergency goods: essential medicines, ambulances 2.Shopping goods: moderate involvement in terms of time devotion and money involved. High visibility but minimum brand loyalty like readymade garments, television 3.Speciality goods: highest involvement of customer in terms of time involved and money value. Strong brand identification or unique characteristics play role like luxury cars, designer jewellery

Unexpected features

Potential product Augmented product Expected product Generic product Core benefit

Luxury features Expected features Basic features

Basic product

Types of Demand
Effective: demand backed up by purchasing power Latent: consumer is unable to satisfy because of lack of purchasing power or is unable to locate anything suitable or is unaware of the existence Potential: consumer possesses purchasing power but is not buying currently Latent demand constitutes an important consideration in management planning.

Product Management- Meaning

Planning Forecasting Marketing of products

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

PRODUCT Vs. GENERAL MARKETING MANAGEMENT

Product Management General Marketing Management

Scope of Responsibility

Narrow: Single product or product line

Broad: Portfolio of products

Nature of Decision Making

Mainly tactical

Mainly strategic

Time Horizon

Short-run (often annual or shorter)

Long run

Role of PRODUCT MANAGER

Manufacturin g& distribution Advertisin g Agency Media Promotion services

R&D

Packaging

Product Manage r
Legal Purchasin g

Fiscal Market Researc h

Publicit y

Sales

MARKETING ORGANIZATION: PRODUCTFOCUSED ORGANIZATIONS

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

MARKETING ORGANIZATION: MARKETFOCUSED ORGANIZATIONS

Head of company/division

Manufacturing

Marketing

Finance

Corporate communications

Manager, market A

Manager, market B

Manager, market C

MARKETING ORGANIZATION: FUNCTIONALLY FOCUSED ORGANIZATIONS

Head of company/division

Manufacturing

Marketing

Finance

Corporate communications

Product marketing

Advertising

Sales promotion

Marketing research

CRITICAL SKILLS IN PRODUCT MANAGEMENT

Negotiation Teamwork Communication skills Analytical ability

CHANGES AFFECTING PRODUCT MANAGEMENT

Internet Data explosion Increased emphasis on brand equity Changes in the balance of market power Increased importance of customer retention programs Global competition

Services vs. Products