What is a Product?

A product is something sold to fulfil a customer’s desire or requirement, whether it’s tangible or
intangible. Physical products can be either durable goods (such as furniture, cars, and electronics)
or nondurable goods (such as food and drinks).
 Function of Product Manager

ons.
• Responsible of product manager (PM).
• Differences between product and general marketing
management.
• Marketing organization:
• Product-focused organizations.
• Market-focused organizations.
• Functionally-focused organizations.
• Critical skills of PM.
• Changes in marketing organizations.
 Product manager

• The planning activities related to the management of

product(s) or product line.
• Analyzing the market & turning this information into
marketing objectives & strategies for the product.

• Obtaining organizational support for the marketing

plan.
• Involve coordinating with other areas of the firm.
• Involve in internal marketing of the product – obtain
assistance & support of more senior managers in the firm.

• Analyzing potential partner relationship for the

product.
 A Product manager’s potential
interactions
Advertising
Agency Media
Manufacturing & Promotion
distribution services

Packaging
R&D

Product
Manager
Legal Purchasing

Fiscal Publicity

Market
Sales
Research
 Product vs general marketing
management

Product General Marketing

Management Mgmt
Scope of Narrow: Single Broad: Portfolio of
responsibility product or product products
line
Nature of decision Mainly tactical Mainly strategic
making
Time horizon Short-run(annual or Long-run
shorter)
 Marketing organization
product-focused organizations

Head of
company/division

Corporate
Manufacturing Marketing Finance
communications

Marketing Product
Support
research management

Manager of Manager of Manager of

product A product B product C
 product-focused organizations
• Used where different products use the same channel
distribution.

• Product Manager acts as a “mini-CEO” by taking

responsibility for the overall health of the brand.

• A well-defined hierarchy within the product management

system will developed. (refer to the hierarchy structure)

• Key roles are assigned to assistant and associate product

managers
• Assistant PM - market & share forecasting, budgeting,
coordinating with production, executing promotion, packaging, etc.
• Associate PM – more freedom to develop brand extension.
 PRODUCT-FOCUSED ORGANIZATIONS
• Advantages:
• Locus of responsibility is clear.
• PM’s training and experience - develop the ability to work
with other areas in organization.
• Advocate for the product.
• Fast response to customer request.

• Disadvantages:
• Focus on one product.
• Centralized structure.
• Too myopic – focus on ST sales & market share goals
(increase in sales promotion).
• Inefficient use of marketing funds – family brand such as
“Kraft”.
General foods corporation: desserts division
organizational chart
 product-focused organizations
Lead to the “death of the product manager system”
and widespread burnout among them.

This burnout are:

• focus on short term - stifles innovation
• an explosion of marketing data leading into
information overloads,
• corporate downsizing; and
• more responsibility and pressure with less
autonomy.
 Marketing organization
market-focused organizations

Head of
company/division

Corporate
Manufacturing Marketing Finance
communications

Manager, market Manager, market Manager, market

A B C
regional bell operating company
 Marketing organization
functionally-focused organizations

Head of
company/division

Corporate
Manufacturing Marketing Finance
communications

Product Marketing
Advertising Sales promotion
marketing research
 functionally-focused organizations
• Align the company by marketing functions.

• No single person is responsible for the day-to-day

health of a product.

• CEO and VP make marketing strategy decisions.

• Strategies are implemented through discussion and

coordination among the functional areas.

• Works well when the company is producing only two

products.
FUNCTIONALLY-FOCUSED ORGANIZATIONS
• Advantages:
• Administrative simple – the groups are designed to be
parallel to normal marketing activities.
• Specialization.
• Well-coordinated.

• Disadvantages:
• Who is ultimately responsible for the product?
• Substantial time in solving problems.
• Focused only on functional development.
Marketing Organization:
Toy Manufacturer

Vice president,
marketing

Marketing
support

Advertising and
public relations

Publications

Consumer
administration

Merchandising
 Critical skills of product management
• Negotiation
• Product manager must be persuasive & able to influence
the management.
• Teamwork
• Product manager must synthesize information from a
variety departments.
• Communication skills
• Product manager communicates the product/brand to
internal & external parties.
• Analytical ability
• Product manager needs to analyze & interpret all the
figures such as sales targets, share vs competition, e.g.
Changes affecting product management
• The increased emphasis on brands
• Brand is the greatest assets of a company.
• Focus on brand equity.

• Changes in the balance of market power

• Involvement in IT partners between manufacturers and
sellers both has equal access to sales and market share
data.
• The balance power in distribution channels has shifted
from the manufacturer to retailer.
• Consumers & retailers hold bigger marker power.
Changes affecting product management

• Increased importance of customer retention

programs
• Company focus on the lifetime-value-of-a-customer concept.
• Customer services and satisfaction programs, advertising
and promotion programs.

• Increased global competition

• Not appropriate organization structure .
• Obtain experience & knowledge about how a variety of
cultures conduct business.
• Forming trade blocks (Eg: European Union, South America,
economy free – trade zone).
 Coming class – customer analysis
• What we need to know about customers?
• Who buys & uses the product?
• What customers buy & how they use it?
• Where customers buy?
• When customers buy?
• How customers choose?
• Why they prefer a product?
• How they respond to marketing program(s)?
• Will they buy it (again)?
• Segmentation.
• Desirable criteria for segments.
• Methods for market segmentations.
• Everything we use to interact is referred to as a product, from food to
clothing, soaps, and plants. Hence, Product Manager are one of the
most necessary parts of a successful business. Every business
provides some level of product. Therefore, you need some one to
manage those products. Every product manager must ask what they
are selling who the buyers are
• We help you with feature prioritization , team alignment ,
and customers feedback.
• Crafting an amazing product begins by understanding whether it
is physical or virtual.
• When we think of a product, things that come to our mind are
furniture, iPhones, or computers. We can call these physical products.
• On the other hand, virtual products offer services such as mobile app
development , education, or software. These often include online
products or services that you cannot access physically.
Product Mix and Ge Matrix
• The GE Matrix is a strategic framework that helps multi-business
corporations manage portfolios and prioritize investments across
products and SBUs (Strategic Business Units).
• The GE matrix was developed by Mckinsey and Company consultancy
group in the 1970s. The nine cell grid measures business unit strength
against industry attractiveness and this is the key difference. Whereas
BCG is limited to products, business units can be products, whole
product lines, a service or even a brand. You can plot these chosen
units on the grid and this will help you to determine which strategy to
apply.
GE Matrix
GE Matrix

• Industry Attractiveness:
• Factors you could choose to base this on include:
• Market size
• Market growth
• Pestel factors
• Political
• Economical
• Social
• Technological
• Environmental
• Legal
• Porters five forces
• Competitive rivalry
• Buyer power
• Supplier power
• Threat of new entrants
• Threat of substitution
GE Matrix

• To decide which factors you will use as a determining factor as these

will be applied to ALL business units.
• Step 1: Decide on determining factors
• Step 2: Give each factor a weighting number based on its magnitude
(make the total weight of all factors add up to 1.00 or 10.00 for example)
• Step 3: Rate each business unit against each factor on a scale. For
example 1 – 5 where 1 is extremely attractive and 5 is extremely
unattractive.
• Step 4: Give each business unit a weighted rating on each factor by
multiplying its rating by the weight for that factor.
• Step 5: Total up all the weighted ratings for each business unit.
BCG Matrix
• BCG Matrix is an apparatus utilized to incorporate methodology to
break down specialty units or product offerings dependent on two
factors: relative piece of the overall industry and the market
development rate. By joining these two factors into a matrix, an
organization can plot their specialty units as needs are and figure out
where to dispense extra (financial) assets, where to money out, and
where to strip.
• Dogs : Low market share and low market growth
• Question Marks : Low market share and high market growth
• Cash Cows : High market share and low market growth.
• Stars :. High market share and high market growth.
BCG Matrix

Low market share and high market growth

High market share and high market growth.

:Low market share and low market growth

High market share and high market growth
PLC

• A product life cycle is the amount of time a product goes from being
introduced into the market until it's taken off the shelves.
• There are four stages in a product's life cycle—introduction, growth,
maturity, and decline.
• A company often incurs higher marketing costs when introducing a product
to the market but experiences higher sales as product adoption grows.
• Sales stabilize and peak when the product's adoption matures, though
competition and obsolescence may cause its decline.
• The concept of product life cycle helps inform business decision-making,
from pricing and promotion to expansion or cost-cutting.
PLC
New product development
Stages of Product Development

• 1. Idea Generation Entrepreneur may observe a market opportunity

Market research reveals consumers want a new or modified product.
Marketers may ask “how can we improve our product to improve
sales?”
2. Idea screening Not all ideas are good Marketers need to see
consumer reaction to the new idea, and look at competition. Market
Research, Focus Groups, Interviews Various forms of Primary
Research
• Concept development If it’s a good idea, a prototype of the product
is made sample of what the product will look like and how it operate
Does it work? Do consumers like it? How much will it cost?
• 4. Market strategy Using market research, to establish a target market Develop a
marketing strategy (4 P’s)
• Feasibility study Can the product be made and sold such that it is affordable for the
consumer and profitable for the company?
• . Product design. Take into account preferences of the target market this includes
features such as: Warranty instruction manual Packaging service information.
• Test marketing Get the product into the hands of people who fit your target market.
Have them use it, for a period of time, complete survey to make suggestions
• Market entry Start of product life cycle, product is introduced to the market.
• se google, hot product news. Com Search your own if you wish! Open the assignment
entitled “New Products Assignment "You will choose 3 new products to write about
All must be a different product category ie. computers, smart phones, cars, etc.
Case study

• The video recorder wars: The winning formula

• A battle took place in the mid 1970s between manufacturers of video cassettes and their associated players. Although
Philips was first to market with its Video Cassette Recording system released in 1972, Sony, as with its Walkman
concept, was first to really attract the market with its Betamax video format released in 1975. It quickly gained market
dominance until challenged by JVC's VHS. These two formats were joined a year later by the Philips V2000; all of
these system being incompatible with each other. The Philips machine despite having several superior features never
really gained significant market share - not all of the superior features were offered on the cheaper Philips models,
which also suffered from poor video quality and a lack of mechanical reliability. For all these reasons the format never
gained substantial market share and was withdrawn in 1985, leaving the Sony and JVC to battle it out for video
supremacy.
• Sony was confident that its superior performance and high market share would see it defeat the new JVC upstart, but
it made the cardinal marketing blunder of not responding to the needs of its potential customers.
• Although consumers were impressed with Sony's marketing and the quality of its players, they wanted something
quite different. Sony initially restricted the recording time of its player to one hour; suitable for television
programmes, but not for the recording of films which formed the basis of a growing video rental market. Movie and
video studios turned their backs on Sony and JVC were able to offer by far the largest range of rental titles on its
'Long Play' system. In addition, consumers wanted an affordable video player. JVC had made the decisive strategic
move of licensing its technology to a range of electronic manufacturers; competition between which kept the price of
VHS recorders well below that of Sony's machines. Despite the perceived quality advantage of the Sony, demand was
price sensitive and by 1981, the market share held by Betamax tapes had fallen to below 25%.
• In 1988, Sony began to market its own VHS machines and at that point it was evident that the Betamax format was
dead. In recent years, both Betamax and VHS have been replaced by DVDs. The last Sony Betamax machine was
manufactured in 2002 and the last dedicated JVC VHS unit was produced in 2007.
Case study Questions

• Question 1
• Define the following terms:
• Market share
• Licensing
• Question 2
• Explain the importance of research and development in the process of new product development.
• Question 3
• Analyse the relationship between the product life cycle and the marketing mix.
• Question 4
• Research the format war between Sony and JVC and answer the following question:
• Using the example of the video recorder market discuss whether Sony could have maintained the
competitive advantage of its Betamax format over the rival VHS system.