1.introduction to product management


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1.introduction to product management

  1. 1. Introduction to ProductManagement
  2. 2. DefinitionProduct refers to all kinds of physical goods & intangible services that a company offers to its customers
  3. 3. Product Levels Core product Expected product Augmented product Potential Product
  4. 4. What’s a Product?  Good  Service  Idea
  5. 5. Classifying Products Consumer vs. Business
  6. 6. Categories of ProductsConsumer Business/Industrial Convenience  Raw Materials Shopping  Processed Materials Specialty  Advanced Unsought Components Emergency  Product Components  Maintenance, Repair & Operating (MRO) Products
  7. 7. Consumer Products  Convenience  Staples  Impulse  Emergency
  8. 8. Convenience Products Appeal to a very large market segment Low involvement Consumed regularly Purchased frequently Examples -food, cleaning products, personal care products, groceries etc.
  9. 9. Consumer Products Shopping Homogenous Heterogeneous
  10. 10. Shopping Products Purchase & consume less frequently than convenience products. Relatively more expensive than convenience products High Involvement -spend more time locating them Possess additional psychological benefits – raise perceived status level Examples - apparels, personal services, electronics & furnishings
  11. 11. Consumer Products  Specialty
  12. 12. Specialty Products High price tag relative to convenience & shopping products Consumption at the same rate as shopping products but consumers are much more selective
  13. 13. Consumer Products  Unsought  Emergency
  14. 14. Unsought Products Purchase is unplanned -result of marketer’s actions. Purchase decisions occur when customer is exposed to promotional activity, like salesperson’s persuasion or incentives like special discounts Promotional activities result in Impulse Purchasing
  15. 15. Emergency Products Customer seeks these due to sudden events Pre-purchase planning is not considered. Often the decision is one of convenience (e.g., whatever works to fix a problem) or personal fulfilment (e.g., perceived to improve purchaser’s image)
  16. 16. Business Products  Raw Materials  Component Parts
  17. 17. Industrial Products –Advanced Components Use basic components to produce products that offer a significant function needed within a larger product By itself an advanced component does not stand alone as a final product Motherboard without memory chips, microprocessor would have little value.
  18. 18. Product Component Products used in assembly of a final product These can also function as stand alone products. Dice included as part of a children’s board game
  19. 19. Business Products Installations  Accessory Equipment
  20. 20. Business Products  Process Materials  Supplies
  21. 21. Business Products  Business Services
  22. 22. Maintenance, Repair & OperatingProducts Products used to assist with the operation of the organization but are not directly used in producing goods or services Office supplies, parts for a truck fleet, natural gas to heat a factory
  23. 23. Product Manager’s Potential Interactions Agency media department Company media department Suppliers Media sales reps Advertis- Trade Manufactur- ing ing and agency MediaSuppliers Premium distribution suppliers Research Premium and Promotion screening Store development services testing Sampling Couponing Product Packagin Legal manager g Designers Purchasin Researchers Fiscal g Market Publicity Suppliers research Sales Research suppliers Trade
  24. 24. Skills of a Product Manager Negotiation Team- work Communication Analytical Abilities
  25. 25. Responsibilities Planning activities related to the product/product line Get organization support for the marketing plans & co-ordinate with R&D, Market Research, finance etc.
  26. 26. Challenges of Product Management Internet - Data Explosion Increased focus on building brands Changes in balance of market power – from the manufacturer to product to consumer being king Increased focus on customer retention programs and customer life- time value Increased global competition
  27. 27. Marketing PlanningA marketing plan is a written document containing the guidelines for the business center’s marketing plan & allocations over the planning period
  28. 28. Objectives Define current situation and how we got there Define Problems & Opportunities facing the business Establish objectives Define strategies & programs necessary to achieve these objectives Pinpoint responsibility for achieving objectives Establish customer- competitor orientation
  29. 29. Types of Organizations Product Focused Market Focused Functionally Focused
  30. 30. Product-Focused Structure Head of company/divisionManufacturing Marketing Corporate Finance communications Marketing Product Support Research management Manager of Manager of Manager of product A product B product C
  31. 31. Product Focused Head of a Division – a profit center Product Managers report to Marketing Managers Each Product Manager responsible for a single product
  32. 32. Product Focused Advantages – Clarity of role & responsibility Responsible for success/failure Disadvantages- Narrow focus on product & bottom lines, rather than customer needs Overlap calls to same customers for different of responsibilities- sales force duplicate products
  33. 33. Adobe Systems Marketing Organization Product Sales Corporate Development Communications & Marketing Product Channel Public Trade Marketing Marketing Merchandising Relations Shows- Specification - Cross Product Programs - Channel Promotions - Organize Press Tours - Trade Shows- Positioning - Road Shows - Channel Advertising - Press Communications- Pricing - Seminars - Coop Advertising - Editorial Opportunities- Spokesperson - Third Party promotions Internal & External - Events- Promotions - Creative Services- Advertising- Product Strategy- Product Analysis- Anything CrossFunctional- Keep communicationflow going
  34. 34. Market-Focused Organization Head of the company/division Corporate Manufacturing Marketing Finance communications Manager, Manager, Manager, market A market B market C
  35. 35. Market Focused Market can be clearly segmented by channel, industry, buyer behavior, region, customer size Hierarchy - VP Marketing – Assistant VP – Consumer marketing, AVP- Business Marketing
  36. 36. Market Focused Advantages – Focus on Customer Managers have better knowledge of company’s product lines Disadvantages-• Profit focus is lost• Financial responsibilities not clear• Conflict between Product Managers
  37. 37. Marketing Organization: RegionalBell Operating Company Vice president, marketing Assistant vice president, Assistant vice president, Assistant vice president, consumer marketing business marketing interindustry marketing Marketing planning and Product management Carrier marketing product development Operations and sales Product management Operator services Customer billing Operations Revenue and Directory products market forecasting
  38. 38. Functionally-Focused Organization Head of the company/division Corporate Manufacturing Marketing Finance communications Product Sales Marketing Advertising marketing promotion research
  39. 39. Functionally Focused Head of Company/Division has the Manufacturing, Marketing, Finance & Corporate Communications reporting in to him Marketing managers responsible for Product, Advertising, Sales Promotions & Market Research
  40. 40. Functionally Focused Advantages – Administratively simple Managers have better knowledge of their functional areas Disadvantages-• As company adds products – increased co-ordination difficult• Profit Focus is lost
  41. 41. Marketing Organization: Toy Manufacturer Vice president, marketing Marketing support Advertising and public relations Publications Consumer administration Merchandising
  42. 42. Restructuring the Adaptive Marketing Organization Chief Marketing Officer VP, Customer VP, Marketing VP, Experience Management Technology Design Director, Director,Director, Director, Director, Creative MultimediaResearch Cohort 1 Cohort 2 Development Production Director, Director, Director, Director, Marketing Asset Customer Service Marketing Customer Management Systems Delivery Systems Database
  43. 43. GM’s New Organizational Structure Ron Zarrella VP & group executive, North American Operations John Middlebrook Phil Guarascio Roy Roberts John Middlebrook William Lovejoy VP & GM, vehicle VP & GM, advertis- VP & GM, field Support staff group VP & GM, service brand marketing ing & corp. mktg. sales service & directors parts operations parts Division marketing Regional general Service parts general managers manager(s) organization (6) Brand services Regional Regional Regional Regional Brand teams divisional managers support service parts manager marketing manager manager manager Marketing area managers Area sales Area service Area parts manager manager manager
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