Introduction to Product Management

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Introduction to Product Management

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Introduction to Product Management

The product manager has broad/heavy responsibility but virtually no authority per se (except the “authority” that is derived from the plans which have received approval by senior management)

Role of the PM

What Does A Product Manager Do?

Marketer’s Job Simplified

Planning

Internal selling

Planning Activities
Internal Selling

Keeping Senior Management informed and supportive

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Organizational Structures

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Organizational Structures

We will explore 3 Organizational structures;

  1. Product-Focused Organizations


  2. Market-Focused Organizations


  3. Functionally Focused
Product-Focused Structure

Market-Focused Organization

Advantages
Disadvantages
Functionally Focused Organizations
Product Management: Critical Skills
Discussion Topics

What market trends are impacting the role of the Product Manger?

Category Management
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Managing the Product

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Managing the Product

Role of a Product Manager
Criteria for Effective Objectives
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Product Strategies

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Product Strategies

Quality as a Product Objective

Key Aspects of Quality

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Marketing Mix During Product Life Cycle

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Marketing Mix During Product Life Cycle

Growth

Maturity

Decline

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Managing the PLC

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Managing the PLC

Five categories and profiles of product adopters

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Branding Decisions

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Branding Decisions

Good Brand Names

Easy to remember
Trademarks
Brand Equity
Branding Strategies
Packaging and Labeling Decisions
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Managing the Product

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Managing the Product

Four market-product strategies:

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Developing and Managing Products

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Developing and Managing Products

New Product Development 1
New Product Development (2)

New product process includes:

  1. New Product Strategy (NPD process to match objectives)


  2. Idea Generation and Sources

New Product Development (3)

Idea Screening (what do we have? +/-)

In pharmacy, 1 of 5,000 new drug ideas is commonv

In autos, 1 of 20 new car concepts is made to prototype

Point? Brainstorm, then cut via research

Short and long run $ performance

Social issues:

Consumer welfare (Ben and Jerry’s)

Safety ( Marlboro cigarettes) – liability (McDonald’s hot coffee)

Business Analysis

Examine consumer perceptions (Coors banquet beer)

Consider view of retailers and wholesaler (Frito Lay)

5. Development (can go hand-in-hand with analysis)

Product tests (New Coke, movies)

Risky: (leaks, skewed results)

Virtual product development: examine without construction

Prototype product and marketing strategy

Longest process (Minute Rice took 18 years!)

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Test Marketing and Commercialization

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Test Marketing and Commercialization

Select Test Cities (Panama City or Dayton Ohio?)

Does skipping test marketing save money?

Sometimes, line extensions are not tested (Quaker Chewy)

Commercialization takes a substantial amount of $ (New Coke)

Some firms “roll out” their products gradually (movies; Pixar)

Product Life Cycle (1)

Product life cycle (4 stages): for product IDEA, not individual firms.

  1. Introduction (phones with net access; plasma TV)

    High marketing costs (inform)

    Slow sales increase

    Low or no profit (Amazon.com)

    Low competition

    Price often high (ex. Calculator)

  2. What other products can you think of that are in introduction?
  3. Product Life Cycle (2)

    Product life cycle (cont…)

  4. Growth (solar changing lens)
  5. High marketing expense (inform and persuade)

    Many small competitors – market entry (athletic apparel)

    Little price competition

    Industry profits rise/peak and sales increasing

What other products are in growth?

Product Life Cycle (3)

  1. Maturity (Beer and Auto)
  2. Industry sales level off; profits down

    Promotions stop rising: moderate marketing expense (persuade)

    Fewer, stronger competitors: tough competition in general

    Many consumers view product as homogeneous; price competition

  3. What other products can you think of that are in maturity?
Product Life Cycle (4)
  1. Decline: being replaced (VCR)
  2. Decrease in industry sales/profits

    Low marketing expense; small groups remain loyal

    Dropouts: few competitors; most gone

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What other products can you think of that are in decline?

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What other products can you think of that are in decline?

Product Life Cycle (5)
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Factors that may speed products through PLC

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Factors that may speed products through PLC

  1. Ease of trial (supermarkets, no risk, test drive)


  2. Ease of use (some assembly required; Toys R Us (bike); Gateway store)


  3. Easy to communicate advantages (Always low price; cars)


  4. Compatible with customer experience (Poland & free samples)
Spread of New Products
  1. Global and Domestic: Perceived as “new”


  2. Diffusion of Innovation


  3. Who are you?


  4. Early adopter (first 2.5% to adopt)


  5. Early majority (next 13.5%)


  6. Late majority (next 34%)


  7. Laggard (last 16% to adopt)
How to Have New Product Failure
Summary
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