Introduction to Product Management
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Transcript of Introduction to Product Management
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 ProductsShopping
HomogenousHeterogeneous
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
distributionResearch
and development
ProductProduct managermanager
SuppliersTrade
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 PlanningA 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 communicationsFinanceMarketingManufacturing
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 Marketing Corporate 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 Marketing Corporate 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 ManufacturerVice 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