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)
What Does A Product Manager Do?
Planning
Internal selling
Keeping Senior Management informed and supportive
We will explore 3 Organizational structures;
What market trends are impacting the role of the Product Manger?
New product process includes:
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
Consumer welfare (Ben and Jerry’s)
Safety ( Marlboro cigarettes) – liability (McDonald’s hot coffee)
Examine consumer perceptions (Coors banquet beer)
Consider view of retailers and wholesaler (Frito Lay)
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!)
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 (4 stages): for product IDEA, not individual firms.
High marketing costs (inform)
Slow sales increase
Low or no profit (Amazon.com)
Low competition
Price often high (ex. Calculator)
Product life cycle (cont…)
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)
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
Decrease in industry sales/profits
Low marketing expense; small groups remain loyal
Dropouts: few competitors; most gone
Self fulfilling prophecy (Is beer always going to be a mature product?)
All do not follow pattern (fads; fashion; scooters: comeback)
Product may be in different stages by the market (B&W T.V.; Coke)