Meaning of product Management: Product management is an

organizational lifecycle function within a company dealing with the planning or

forecasting or marketing of a product or products at all stages of the product lifecycle.

Product management (inbound focused) and product marketing (outbound focused) are
different yet complementary efforts with the objective of maximizing sales revenues,
market share, and profit margins. The role of product management spans many activities
from strategic to tactical and varies based on the organizational structure of the company.
Product management can be a function separate on its own and a member of marketing or
engineering

Definition of Product Management : The organizational structure

within a business that manages the development, marketing and sale of a product or set of
products throughout the product life cycle. It encompasses the broad set of activities
required to get the product to market and to support it thereafter.

Aspects of product management

Depending on the company size and history, product management has a variety of
functions and roles. Sometimes there is a product manager, and sometimes the role of
product manager is held by others. Frequently there is Profit and Loss (P&L)
responsibility as a key metric for evaluating product manager performance. In some
companies, the product management function is the hub of many other activities around
the product. In others, it is one of many things that need to happen to bring a product to
market.

Product management often serves an inter-disciplinary role, bridging gaps within the
company between teams of different expertise, most notably between engineering-
oriented teams and business-oriented teams. For example product managers often
translate business objectives set for a product by Marketing or Sales into engineering
requirements. Conversely they may work to explain the capabilities and limitations of the
finished product back to Marketing and Sales. Product Managers may also have one or
more direct reports such as a Product Executive who can manage operational tasks or a
Change Manager who can oversee new initiatives.

Product planning

• Identifying new product candidates

• Gathering market requirements
• Determine business-case and feasibility
• Scoping and defining new products at high level
 • Evangelizing new products within the company
• Building product roadmaps, particularly Technology roadmaps
• Working to a critical path and ensuring all products are produced on
schedule
• Ensuring products are within price margins and up to spec
• Product Life Cycle considerations
• Product differentiation
• Detailed Product planning
• 7 functions of marketing

Product marketing

• Product positioning and outbound messaging

• Promoting the product externally with press, customers, and partners
• Conduct customer feedback and enabling (pre-production, beta software)
• Bringing new products to market
• Monitoring the competition
• more detail on Product marketing

Product Mix.

The product mix of a company, which is generally defined as the total composite
of products offered by a particular organization, consists of both product lines
and individual products. A product line is a group of products within the product
mix that are closely related, either because they function in a similar manner, are
sold to the same customer groups, are marketed through the same types of
outlets, or fall within given price ranges. A product is a distinct unit within the
product line that is distinguishable by size, price, appearance, or some other
attribute. For example, all the courses a university offers constitute its product
mix; courses in the marketing department constitute a product line; and the basic
marketing course is a product item. Product decisions at these three levels are
generally of two types: those that involve width (variety) and depth (assortment)
of the product line and those that involve changes in the product mix occur over
time.

PRODUCT-MIX MANAGEMENT AND

RESPONSIBILITIES
It is extremely important for any organization to have a well-managed product mix. Most
organizations break down managing the product mix, product line, and actual product
into three different levels.

Product-mix decisions are concerned with the combination of product lines offered by the
company. Management of the companies' product mix is the responsibility of top
management. Some basic product-mix decisions include: (1) reviewing the mix of
existing product lines; (2) adding new lines to and deleting existing lines from the
product mix; (3) determining the relative emphasis on new versus existing product lines
in the mix; (4) determining the appropriate emphasis on internal development versus
external acquisition in the product mix; (5) gauging the effects of adding or deleting a
product line in relationship to other lines in the product mix; and (6) forecasting the
effects of future external change on the company's product mix.

Product-line decisions are concerned with the combination of individual products offered
within a given line. The product-line manager supervises several product managers who
are responsible for individual products in the line. Decisions about a product line are
usually incorporated into a marketing plan at the divisional level. Such a plan specifies
changes in the product lines and allocations to products in each line. Generally, product-
line managers have the following responsibilities: (1) considering expansion of a given
product line; (2) considering candidates for deletion from the product line; (3) evaluating
the effects of product additions and deletions on the profitability of other items in the
line; and (4) allocating resources to individual products in the line on the basis of
marketing strategies recommended by product managers.

Decisions at the first level of product management involve the marketing mix for an
individual brand/product. These decisions are the responsibility of a brand manager
(sometimes called a product manager). Decisions regarding the marketing mix for a
brand are represented in the product's marketing plan. The plan for a new brand would
specify price level, advertising expenditures for the coming year, coupons, trade
discounts, distribution facilities, and a five-year statement of projected sales and earnings.
The plan for an existing product would focus on any changes in the marketing strategy.
Some of these changes might include the product's target market, advertising and
promotional expenditures, product characteristics, price level, and recommended
distribution strategy.

PRODUCT-MIX ANALYSIS

Since top management is ultimately responsible for the product mix and the resulting
profits or losses, they often analyze the company product mix. The first assessment
involves the area of opportunity in a particular industry or market. Opportunity is
generally defined in terms of current industry growth or potential attractiveness as an
investment. The second criterion is the company's ability to exploit opportunity, which is
based on its current or potential position in the industry. The company's position can be
measured in terms of market share if it is currently in the market, or in terms of its
resources if it is considering entering the market. These two factors—opportunity and the
company's ability to exploit it—provide four different options for a company to follow.

1. High opportunity and ability to exploit it result in the firm's introducing new
products or expanding markets for existing products to ensure future growth.
2. Low opportunity but a strong current market position will generally result in the
company's attempting to maintain its position to ensure current profitability.
3. High opportunity but a lack of ability to exploit it results in either (a) attempting
to acquire the necessary resources or (b) deciding not to further pursue
opportunity in these markets.
4. Low opportunity and a weak market position will result in either (a) avoiding
these markets or (b) divesting existing products in them.

These options provide a basis for the firm to evaluate new and existing products in an
attempt to achieve balance between current and future growth. This analysis may cause
the product mix to change, depending on what management decides.

The most widely used approach to product portfolio analysis is the model developed by
the Boston Consulting Group (BCG). The BCG analysis emphasizes two main criteria in
evaluating the firm's product mix: the market growth rate and the product's relative
market share. BCG uses these two criteria because they are closely related to
profitability, which is why top management often uses the BCG analysis. Proper analysis
and conclusions may lead to significant changes to the company's product mix, product
line, and product offerings.

The market growth rate represents the products' category position in the product life
cycle. Products in the introductory and growth phases require more investment because
of research and development and initial marketing costs for advertising, selling, and
distribution. This category is also regarded as a high-growth area (e.g., the Internet).
Relative market share represents the company's competitive strength (or estimated
strength for a new entry). Market share is compared to that of the leading competitor

Product strategies

There are five major product strategies in international marketing.

Product communications extension

This strategy is very low cost and merely takes the same product and communication
strategy into other markets. However it can be risky if misjudgments are made. For
example CPC International believed the US consumer would take to dry soups, which
dominate the European market. It did not work.
Extended product - communications adaptation

If the product basically fits the different needs or segments of a market it may need an
adjustment in marketing communications only. Again this is a low cost strategy, but
different product functions have to be identified and a suitable communications mix
developed.

Product adaptation - communications extension

The product is adapted to fit usage conditions but the communication stays the same. The
assumption is that the product will serve the same function in foreign markets under
different usage conditions.

Product adaptation - communications adaptation

Both product and communication strategies need attention to fit the peculiar need of the
market.

Product invention

This needs a totally new idea to fit the exclusive conditions of the market. This is very
much a strategy which could be ideal in a Third World situation. The development costs
may be high, but the advantages are also very high.

Product Development Steps

Step 1. IDEA GENERATION : The first step of new product development

requires gathering ideas to be evaluated as potential product
options. For many companies idea generation is an ongoing process
with contributions from inside and outside the organization. Many
market research techniques are used to encourage ideas including:
running focus groups with consumers, channel members, and the
company’s sales force.
One important research technique used to generate ideas is brainstorming where
open-minded, creative thinkers from inside and outside the company gather and
share ideas. The dynamic nature of group members floating ideas, where one
idea often sparks another idea, can yield a wide range of possible products that
can be further pursued.
Step 2. SCREENING:
In Step 2 the ideas generated in Step 1 are critically evaluated by company
personnel to isolate the most attractive options. Depending on the number of
ideas, screening may be done in rounds with the first round involving company
executives judging the feasibility of ideas while successive rounds may utilize
more advanced research techniques. As the ideas are whittled down to a few
attractive options, rough estimates are made of an idea’s potential in terms of
sales, production costs, profit potential, and competitors’ response if the product
is introduced. Acceptable ideas move on to the next step.

Step 3. CONCEPT DEVELOPMENT AND TESTING: With a few ideas in

hand the marketer now attempts to obtain initial feedback from
customers, distributors and its own employees. Generally, focus
groups are convened where the ideas are presented to a group,
often in the form of concept board presentations (i.e., storyboards)
and not in actual working form. For instance, customers may be
shown a concept board displaying drawings of a product idea or
even an advertisement featuring the product. In some cases focus
groups are exposed to a mock-up of the ideas, which is a physical
but generally non-functional version of product idea. During focus
groups with customers the marketer seeks information that may
include: likes and dislike of the concept; level of interest in
purchasing the product; frequency of purchase (used to help
forecast demand); and price points to determine how much
customers are willing to spend to acquire the product.

The Product Life Cycle (PLC) is based upon the biological life cycle. For example, a
seed is planted (introduction); it begins to sprout (growth); it shoots out leaves and puts
down roots as it becomes an adult (maturity); after a long period as an adult the plant
begins to shrink and die out (decline).

In theory it's the same for a product. After a period of development it is introduced or
launched into the market; it gains more and more customers as it grows; eventually the
market stabilises and the product becomes mature; then after a period of time the product
is overtaken by development and the introduction of superior competitors, it goes into
decline and is eventually withdrawn.

However, most products fail in the introduction phase. Others have very cyclical maturity
phases where declines see the product promoted to regain customers.
Strategies for the differing stages of the Product Life
Cycle.
Introduction.
The need for immediate profit is not a pressure. The product is promoted to create
awareness. If the product has no or few competitors, a skimming price strategy is
employed. Limited numbers of product are available in few channels of distribution.

Growth.
Competitors are attracted into the market with very similar offerings. Products become
more profitable and companies form alliances, joint ventures and take each other over.
Advertising spend is high and focuses upon building brand. Market share tends to
stabilise.

Maturity.
Those products that survive the earlier stages tend to spend longest in this phase. Sales
grow at a decreasing rate and then stabilise. Producers attempt to differentiate products
and brands are key to this. Price wars and intense competition occur. At this point the
market reaches saturation. Producers begin to leave the market due to poor margins.
Promotion becomes more widespread and use a greater variety of media.

Decline.
At this point there is a downturn in the market. For example more innovative products are
introduced or consumer tastes have changed. There is intense price-cutting and many
more products are withdrawn from the market. Profits can be improved by reducing
marketing spend and cost cutting.
Problems with Product Life Cycle.
In reality very few products follow such a prescriptive cycle. The length of each stage
varies enormously. The decisions of marketers can change the stage, for example from
maturity to decline by price-cutting. Not all products go through each stage. Some go
from introduction to decline. It is not easy to tell which stage the product is in. Remember
that PLC is like all other tools. Use it to inform your gut feeling.