Product Management Essay

Product is a tangible physical entity which can be used for either buying or selling. Product
Management is an organisational lifecycle function within a company dealing with the planning and
marketing of a product at all stages of its product lifecycle. Product management can be split into two parts;
product planning and product marketing. Product planning deals with identifying and articulating marketing
requirements whereas product marketing deals with more outbound marketing tasks.
Product planning predominantly revolves around product life cycle considerations. The lifecycle is
composed of four stages; introduction, growth, maturity and decline. The first stage is all about creating
awareness. Profit is minimal here and a price skimming strategy is often implemented. A high failure rate is
present. Following introduction is growth. Products grow at an increasing rate and profit becomes healthier.
This is because companies are drawn to the market as they are attracted to similar offerings. As a result
companies form alliances to benefit from the products current state. The market share tends to stabilise.
Products that survive earlier stages spend longest in the maturity stage. Sales grow at a decreasing rate
which leads to intense competition and price wars. Companies attempt to differentiate products through
more widespread promotions. The market reaches saturation and producers begin to leave due to poor
margins signalling the end of this stage. The final stage of the lifecycle is decline. This could happen due to
a combination of factors. This could be because consumer tastes are changing, there are more innovative
products on offer or there is a downturn in the market. To prevent the firm slipping into decline the company
could implement either a deletion strategy (removing the product from the product line) or a harvest strategy
(reduce marketing support to the product). The uses of the PLC within a product planning should be adhered
to. The plc suggests that a balanced set of products should be maintained through the stages, marketing
objectives and strategies regularly reviewed and to terminate old and develop new products. However, one
must be careful when using this as the PLC is not a fact of life, duration of stages are unpredictable and
consumer products have shorter cycles than business products.
Product marketing is where the firm markets its new product. Invention is the discovery of a new
idea and methods. Innovation is commercialising an invention by bringing it to the market. Once a new
product has been designed, the product diffuses through a population, theoretically known as the diffusion of
innovation. The first group the product diffuses through is the innovators (2.5%). This group is well
educated, have a high income and are eager to try new ideas. Following the innovators is the early adopters
(13.5%). This group tend to be opinion leaders, are orientated on the local community and reliant on their
norms. The early majority (34%) however evaluate more brands than the early adopters, collect more
information about the product and rely on friends and opinion leaders for norms. Conversely, the late
majority (34%) feel a pressure to conform and only do so as their friends and relatives have. This group is
older than others and tends to be below average in income and education. Finally, the laggards (16%) don’t
rely on norms of any group. They are tradition bound and are suspicious of new products. They have the
lowest socio-economic status. There are four factors which affect the rate of adoption. The first is
complexity, which is the degree of difficulty in understanding and using a new product. The next is
compatibility, which is the degree of the product fitting with existing values and beliefs of the user. These
two factors slow diffusion. Yet relative advantage, the degree to which a product is seen as superior to its
substitutes and obeservability, the degree to which the benefits and other results of using a new product can
be observed by others, speed diffusion.