Making Smarter Decisions About Your Products - H. Del Castillo, AIPMM

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Thanks everyone who participated in this webcast from The Association of International Product Marketing and Management (AIPMM). …

Thanks everyone who participated in this webcast from The Association of International Product Marketing and Management (AIPMM).

I welcome your comments regarding this topic. Contact me here: http:/linkd.in/hdelcastillo.

Description
Most companies struggle to find the right balance between growing existing products, creating new products that get traction, and managing risk. In my experience, companies that have an innovation growth strategy often struggle to implement a process that allows the integration of strategic analysis to help them make smarter decisions about their product portfolio.

These companies risk building the wrong products or adopt the wrong product strategy for products within their portfolio. This session will discuss why product portfolio analysis is essential for the success of companies wanting to grow or expand. It will also identify tools to guide critical product decisions and manage challenges.

Join Hector Del Castillo as he shares insights on how to make smarter decisions about your products. Key takeaways from participating in this webinar:
- How to evaluate your product portfolio
- How to define success metrics to assess market performance
- How to assess risk of your product portfolio
- How to balance growth and risk

Who Should Attend
This discussion is for CXOs, VPs and Directors of Product Management and Product Marketing, experienced product managers, and product team leaders who perform product portfolio analysis to improve the market performance of products

About the Speaker:
Hector Del Castillo, a product innovation strategy consultant, has over 15 years of experience directing the product strategy for companies to create new revenue streams and reduce risk by growing high-performing product teams and implementing a product life cycle management process. He has launched several profitable technology-based products and solutions. He provides services as a consultant, contractor, coach, or trainer to companies that want to grow and create value-added products that delight customers and create demand.

About AIPMM
The AIPMM is the hub of all things product management. It is where product professionals go for answers. With members in over 65 countries, it is the worldwide certifying body of product team professionals.

It is the world's largest professional organization of product managers, brand managers, product marketing managers and other product team professionals who are responsible for guiding their organizations, or clients, through a constantly changing business landscape.

Visit www.aipmm.com.

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  • The Certified Innovation Leader body of knowledge and credential is aligned with The Association of International Product Marketing and Management. AIPMM was founded in 1998. It provides professional development, training, and certification to those involved in product management, such as product managers and developers, marketing managers, brand managers, project managers, and many more. The certified innovation leader credential is one of four certifications provided by AIPMM. The others include: certified product manager, certified product marketing manager, and agile certified product manager.
  • The Certified Innovation Leader body of knowledge and credential is aligned with The Association of International Product Marketing and Management. AIPMM was founded in 1998. It provides professional development, training, and certification to those involved in product management, such as product managers and developers, marketing managers, brand managers, project managers, and many more. The certified innovation leader credential is one of four certifications provided by AIPMM. The others include: certified product manager, certified product marketing manager, and agile certified product manager.
  • I want to thank everyone who attended this webcast. I welcome your feedback regarding this topic. Contact me with any comments or questions. I look forward to seeing you again soon.
  • Product portfolio analysis is looking at the range of products a business offers in an attempt to improve market performance of the entire product portfolio.Product planning defines the right products to bring to market in an attempt to create new revenue streams.

Transcript

  • 1. © AIPMM 2013 www.aipmm.com @AIPMMAIPMM Webinar Serieswww.aipmm.com
  • 2. © AIPMM 2013 www.aipmm.com @AIPMM
  • 3. © AIPMM 2013 www.aipmm.com @AIPMMFounded 1998World’s largest professional association for productmanagement, product marketing and brand managementProvides professional development and certification• Certified Product Manager• Certified Product Marketing Manager• Agile Certified Product Manager• Certified Innovation Leader
  • 4. © AIPMM 2013 www.aipmm.com @AIPMMAIPMM CertificationsAIPMM offers globally recognized certifications:• Certified Product Manager (CPM®)• Certified Product Marketing Manager (CPMM®)• Agile Certified Product Manager (ACPM®)• Certified Innovation Leader (CIL®)• Certified Brand Manager (CBM®)
  • 5. © AIPMM 2013 www.aipmm.com @AIPMM• 12-month AIPMM premium membership($175 value)Participate and Win!
  • 6. © H. Del Castillo, AIPMM 2013 Linkd.in/hdelcastilloHector: @hmdelcastilloTherese: @theresepadillaAIPMM: @AIPMMTweet!
  • 7. © AIPMM 2013 www.aipmm.com @AIPMMToday’s SpeakerModerator:Therese Padilla, AIPMM PresidentPresenter:Hector Del Castillo, CPM, CPMMSenior Product Innovation Consultanthmdelcastillo@aipmm.comlinkd.in/hdelcastillo
  • 8. © H. Del Castillo, AIPMM 2013 Linkd.in/hdelcastilloFEATURED PRESENTATION
  • 9. © H. Del Castillo, AIPMM 2013 Linkd.in/hdelcastilloHector Del Castillolinkd.in/hdelcastillo
  • 10. © H. Del Castillo, AIPMM 2013 Linkd.in/hdelcastilloI want to thank everyone who attended thiswebcast.I welcome your feedback regarding this topic.Contact me with any comments or questions.I look forward to seeing you again soon.
  • 11. © H. Del Castillo, AIPMM 2013 Linkd.in/hdelcastilloWhat We Will Discuss1. Why perform product portfolio analysis2. Product portfolio analysis tools3. Managing a product portfolio4. Turning insights into action5. Key Takeaways
  • 12. © H. Del Castillo, AIPMM 2013 Linkd.in/hdelcastilloHow do you measure themarket performance for yourproducts?
  • 13. © H. Del Castillo, AIPMM 2013 Linkd.in/hdelcastilloWhat is the difference betweenProduct Portfolio Analysis andProduct Planning?
  • 14. © H. Del Castillo, AIPMM 2013 Linkd.in/hdelcastilloComparisonProduct PortfolioAnalysis1. the process ofevaluating the rangeof products abusiness offers in anattempt to improvemarket performanceof the entire productportfolio.Product Planning1. the process ofdefining the rightproducts to introduceto market in anattempt to createnew revenue streamsfor a business.Strategic TacticalSource: © 2012 Research Study, AIPMM, All Rights Reserved.
  • 15. © H. Del Castillo, AIPMM 2013 Linkd.in/hdelcastillo1. Select the proper portfolioanalysis tool.
  • 16. © H. Del Castillo, AIPMM 2013 Linkd.in/hdelcastilloStarsQuestionMarksCashCowsDogsBCG MatrixRelative Market ShareMarketGrowthRateSource: “BCG Matrix,” Boston Consulting Group
  • 17. © H. Del Castillo, AIPMM 2013 Linkd.in/hdelcastilloBCG Matrix: Cash CowsSource: “BCG Matrix,” Boston Consulting Group• Have high marketshare and low marketgrowth• Market share must beprotected• Use defensivemarketing tactics• Can be very profitable• Difficult to achievehigher market shareCashCows
  • 18. © H. Del Castillo, AIPMM 2013 Linkd.in/hdelcastilloBCG Matrix: StarsSource: “BCG Matrix,” Boston Consulting Group• Have high market share andhigh market growth• Must work much harder toretain high market share• Can attract competitors quickly• Competitors can gain marketshare by attracting the newcustomers who are enteringthe market• Require offensive marketingtactics to retain their status• May become cash cows oncethe market maturesStars
  • 19. © H. Del Castillo, AIPMM 2013 Linkd.in/hdelcastilloBCG Matrix: Question MarksSource: “BCG Matrix,” Boston Consulting Group• Have low market share andhigh market growth• Require investment tobecome stars or cash cows• High market growth canattract new customers thathave not bought from rivals• Require significantmarketing effort and maynot succeed• Selectively choose which“question marks” to developQuestionMarks
  • 20. © H. Del Castillo, AIPMM 2013 Linkd.in/hdelcastilloBCG Matrix: DogsSource: “BCG Matrix,” Boston Consulting Group• Have low market shareand low market growth• Need to beharvested, divested orretired• Gaining greater marketshare is unlikely as themarket itself is notgrowing• Selectively choose which“dogs” to harvestDogs
  • 21. © H. Del Castillo, AIPMM 2013 Linkd.in/hdelcastilloHow To Use The BCG Matrix1. Plot your products according to their marketshare and market growth.2. If a product seems to fall right on one of thelines, rely on past performance to help decidewhich category applies.3. Determine which of four strategies applies toeach product/product line.
  • 22. © H. Del Castillo, AIPMM 2013 Linkd.in/hdelcastilloStarsQuestionMarksCashCowsDogsBCG Matrix: StrategiesRelative Market ShareMarketGrowthRateSource: “BCG Matrix,” Boston Consulting GroupBuild
  • 23. © H. Del Castillo, AIPMM 2013 Linkd.in/hdelcastilloStarsQuestionMarksCashCowsDogsBCG Matrix: StrategiesRelative Market ShareMarketGrowthRateSource: “BCG Matrix,” Boston Consulting GroupHold
  • 24. © H. Del Castillo, AIPMM 2013 Linkd.in/hdelcastilloStarsQuestionMarksCashCowsDogsBCG Matrix: StrategiesRelative Market ShareMarketGrowthRateSource: “BCG Matrix,” Boston Consulting GroupDivest/Harvest
  • 25. © H. Del Castillo, AIPMM 2013 Linkd.in/hdelcastilloStarsQuestionMarksCashCowsDogsBCG Matrix: StrategiesRelative Market ShareMarketGrowthRateSource: “BCG Matrix,” Boston Consulting GroupBuild/Harvest
  • 26. © H. Del Castillo, AIPMM 2013 Linkd.in/hdelcastilloInvest/GrowBuildSelectivelyGenerateCashBuildSelectivelySelectivity/EarningsHarvestFind Niche/RetireHarvestDivest/RetireGE/ McKinsey 9-Box MatrixIndustry AttractivenessBusinessPositionSource: “Enduring Ideas: The GE–McKinsey nine-box matrix,” McKinsey Quarterly
  • 27. © H. Del Castillo, AIPMM 2013 Linkd.in/hdelcastilloIndustry Attractiveness Indicators• Market Factors̶ Size̶ Growth Rate̶ Cyclicality̶ Seasonality• Competition̶ Type of competitors̶ Degree of Concentration
  • 28. © H. Del Castillo, AIPMM 2013 Linkd.in/hdelcastilloIndustry Attractiveness Indicators• Financial & Economic̶ Contribution Margins̶ Barriers to Entry or Exit• Technological̶ Patents & copyrights̶ Will it become obsolete• Sociopolitical̶ Social attitudes & trends̶ Laws & government regulations
  • 29. © H. Del Castillo, AIPMM 2013 Linkd.in/hdelcastilloBusiness Position Indicators• Market̶ Company’s Market Share̶ Company’s Sales or Share Growth Rate• Competition̶ Strength ofproduct, promotion, price, distribution, financialresources, management relative to competition• Financial & Economic̶ Company’s Margins̶ Economies of scale
  • 30. © H. Del Castillo, AIPMM 2013 Linkd.in/hdelcastilloBusiness Position Indicators• Technological̶ Company’s ability to cope with change̶ Technological skills̶ Patent Protection• Sociopolitical̶ Company’s responsiveness & flexibility
  • 31. © H. Del Castillo, AIPMM 2013 Linkd.in/hdelcastilloHow To Use The GE Matrix1. Select key performance indicators.2. Assign each indicator a weight (total = 1)based on its importance.3. Rate each indicator on industry attractivenessand each indicator for business position on ascale of 1(weak) – 5 (strong).4. Multiply weight times rating for eachindicator and add total for each axis.
  • 32. © H. Del Castillo, AIPMM 2013 Linkd.in/hdelcastilloGE McKinsey Matrix ExampleWeight Rating (1-5) ValueBusiness PositionMarket share .25 3 .75Product Strength .25 4 1Competitive Strength .25 3 .75Financial Strength .25 5 1.25Industry AttractivenessMarket Strength .25 5 1.25Technology Strength .25 5 1.25Level of Competition .25 3 .75Financial Strength .25 4 1
  • 33. © H. Del Castillo, AIPMM 2013 Linkd.in/hdelcastillo2. Select the right keyperformance indicators
  • 34. © H. Del Castillo, AIPMM 2013 Linkd.in/hdelcastilloKPIs measure an organization’sperformance and assist indeveloping performance goalsand strategies
  • 35. © H. Del Castillo, AIPMM 2013 Linkd.in/hdelcastilloWhat are key performanceindicators for your products?
  • 36. © H. Del Castillo, AIPMM 2013 Linkd.in/hdelcastilloKPI Characteristics• Accepted by the organization• Tied directly to a strategic objective• Rated or graded• Time sensitive
  • 37. © H. Del Castillo, AIPMM 2013 Linkd.in/hdelcastilloKPI Development ProcessIdentify theresults youexpect.Establish thenumbers thecompanyneeds toreach itsgoals.Measure theprogress thathas occurredso far.Determinethepercentageof changethat hasoccurredwithin eacharea ofreview.Establish thefrequency ofreviewingtheseindicators.Step 1 Step 2 Step 3 Step 4 Step 5
  • 38. © H. Del Castillo, AIPMM 2013 Linkd.in/hdelcastilloMarket CustomerBusiness OrganizationProductSource: © 1998-2103 AIPMM ProdBOK, All Rights Reserved.
  • 39. © H. Del Castillo, AIPMM 2013 Linkd.in/hdelcastilloMarket• Market Insight• Market Segmentation• Competitive Analysis• Industry Profitability• Segment Profitability
  • 40. © H. Del Castillo, AIPMM 2013 Linkd.in/hdelcastilloCustomer• Customer Strategy• Customer Relationships• Customer Acquisition• Customer Profitability• Brand Awareness & Loyalty• Buy Behavior
  • 41. © H. Del Castillo, AIPMM 2013 Linkd.in/hdelcastilloOrganization• Employee Development• Employee Satisfaction• Management Responsibility• Manufacturing & Operations
  • 42. © H. Del Castillo, AIPMM 2013 Linkd.in/hdelcastilloBusiness• Business Strategy• Quality, Process Improvement & ChangeManagement• Technology Management• Financial Analysis, Reporting, & CapitalManagement• Accounting Management
  • 43. © H. Del Castillo, AIPMM 2013 Linkd.in/hdelcastilloProduct• Product Development & Support• Product Profitability• Augmented Product• Distribution Channels• Price• Promotion• Customer Support
  • 44. © H. Del Castillo, AIPMM 2013 Linkd.in/hdelcastillo3. Agree on success criteria
  • 45. © H. Del Castillo, AIPMM 2013 Linkd.in/hdelcastilloMarketing• Marketing Program Effectiveness• Price Adjustments and Price Elasticity• Product Profitability• Customer Profitability• Distribution Channel Profitability• Channel Evaluation and Selection• Brand Awareness & Loyalty
  • 46. © H. Del Castillo, AIPMM 2013 Linkd.in/hdelcastilloSales• Average Sales Cycle• Average Revenue Per Customer• Number of Demos• Sales Funnel Metrics• Number of New Customers• Customer Retention Rate• Gross Margin Metrics
  • 47. © H. Del Castillo, AIPMM 2013 Linkd.in/hdelcastilloCustomer Support• Customer Satisfaction• Number of Unresolved Customer Issues• Average Time To Resolve Support Issues• Customer Service Requests• Customer Support Profitability
  • 48. © H. Del Castillo, AIPMM 2013 Linkd.in/hdelcastilloProduct Support• Product Profitability• Product Sales Performance• Price Assessment• Conjoint Analysis• Tradeoff Analysis• Portfolio Resource Allocation• Attribute Preference Testing
  • 49. © H. Del Castillo, AIPMM 2013 Linkd.in/hdelcastilloBusiness Strategy• Strategic Scenarios• Industry Attractiveness• Business Strength• Market Growth Rate• Market Share• Balanced Scorecard
  • 50. © H. Del Castillo, AIPMM 2013 Linkd.in/hdelcastilloBusiness Operations• Forecasting• Predictive Analytics• Data Mining• Critical Success Factors
  • 51. © H. Del Castillo, AIPMM 2013 Linkd.in/hdelcastillo4. Perform product portfolioanalysis on a regular basis
  • 52. © H. Del Castillo, AIPMM 2013 Linkd.in/hdelcastilloTypes of MetricsType of Metric Answers This QuestionStrategic Track critical assets that must betended to over a relatively longtimeWhich products must weprotect?Operational Track product quality, on-timedelivery, and augmented servicesWhat are our strengths?Problem-Oriented Address critical challenges facingthe business, such as problemscollecting receivables orcontrolling costs in specific areas.How do we mitigateweaknesses?Technical Evaluate the behavior oftechnologies and of technology-dependent business processesWhich technologiesshould we adopt tostrengthen the portfolio?Financial Track profitability, ROI and cashflow for the businessWhich products are mostprofitable? Why?
  • 53. © H. Del Castillo, AIPMM 2013 Linkd.in/hdelcastilloChart TypesType Examples PurposeBaroften used for asingle point intimeBubblePieScatter
  • 54. © H. Del Castillo, AIPMM 2013 Linkd.in/hdelcastilloChart TypesType Examples PurposeAreaOften used fortime seriesColumnLine
  • 55. © H. Del Castillo, AIPMM 2013 Linkd.in/hdelcastilloChart TypesType Examples PurposeStockOften used forprice changesSurface Often used forconjoint analysisRadar
  • 56. © H. Del Castillo, AIPMM 2013 Linkd.in/hdelcastillo5. Measure results and takecorrective actions
  • 57. © H. Del Castillo, AIPMM 2013 Linkd.in/hdelcastilloYou may not own the criticaldecisions, but you can certainlyinfluence the decision makers.
  • 58. © H. Del Castillo, AIPMM 2013 Linkd.in/hdelcastilloEnsure accurate information isavailable to guide criticaldecisions based on facts aboutmarket and customer insights.
  • 59. © H. Del Castillo, AIPMM 2013 Linkd.in/hdelcastilloKey Takeaways• Use the proper product portfolio analysis tool1• Select the right key performance indicators2• Agree on success criteria3• Perform portfolio analysis on a regular basis4• Measure results and take corrective actions5
  • 60. © H. Del Castillo, AIPMM 2013 Linkd.in/hdelcastilloQ&AModerator:Therese Padilla, AIPMM PresidentPresenter:Hector Del Castillo, CPM, CPMMSenior Product Innovation Consultanthmdelcastillo@aipmm.comlinkd.in/hdelcastillo
  • 61. © AIPMM 2013 www.aipmm.com @AIPMMUpcoming CoursesCourse & Location Dates Days TimeACPM® Certification Prep Course & ExamMcLean, VA May 13, 2013 M 8:30 am – 5 pmCPM® Certification Prep Course & ExamMcLean, VA May 14-15, 2013 T, W 8:30 am – 5 pmCPMM® Certification Prep Course & ExamMcLean, VA May 16-17, 2013 Th, F 8:30 am – 5 pmRegister for these courses here: http://bit.ly/Y9val2.Additional courses are available in Austin, San Jose, and Seattle.
  • 62. © AIPMM 2013 www.aipmm.com @AIPMMUpcoming CoursesCourse & Location Dates TimeCIL® Certification Prep Course & ExamKuala Lumpur, Malaysia Jun 5-6, 2013 9 am – 6 pmCPM® Certification Prep Course & ExamAmman, JordanSingaporeKuala Lumpur, MalaysiaMay 6-7, 2013May 27-29, 2013Jun 3-4, 20138 am – 5 pm8 am – 5 pm9 am – 6 pmCPMM® Certification Prep Course & ExamAmman, JordanSingaporeMay 8-9, 2013May 30-Jun 1, 20138 am – 5 pm8 am – 5 pmFollow the links provided to get more informationregarding these courses.
  • 63. © AIPMM 2013 www.aipmm.com @AIPMMFor More Information About• AIPMM membership benefits• Certification courses near you• How to prepare to take a certification exam• Strengthening your product portfolio to delightyour customers, increase value and minimizeriskHector Del Castillo, PMP, CPM, CPMMTransforming products to wealth for technology-based organizations.TMProduct Marketing Directorhmdelcastillo [at] aipmm.com
  • 64. © AIPMM 2013 www.aipmm.com @AIPMMPlease Join Us Again!AIPMM Webinar Series:Building and Growing an Amazing Product Management Team, May 10, 12 p.m. ETFive Product Roadmap Traps (And How To Avoid Them), May 17, 12 p.m. EThttp://aipmm.com/aipmm_webinars/Global Product Management Talk:http://www.blogtalkradio.com/prodmgmttalkStay Informed!Newsletter: http://www.aipmm.com/subscribeLinkedIn: http://www.linkedin.com/company/aipmmMembership: http://www.aipmm.com/join.phpCertification: http://aipmm.com/html/certification/
  • 65. © H. Del Castillo, AIPMM 2013 Linkd.in/hdelcastilloHector Del Castillo• Senior consultant with over 15 years of experience transformingproducts to wealth for technology-based companies• AIPMM Body of Knowledge (ProdBOK®) Contributor• Established companies– Jet Propulsion Laboratory, Lucent Technologies, MEI Technologies• Small companies and startups– Nextone Communications, Smith Micro Software• Launched 30+ Products for global deployment– HW/SW, Telecom, Enterprise Mobility, Information SecurityServices, Professional Development• Certified PMP®, CPM® and CPMM®• University of California at Santa Barbara, MS EE• University of Texas at El Paso, MS EE, BS EE67
  • 66. © AIPMM 2013 www.aipmm.com @AIPMMHector Del CastilloCPM, CPMM, PMPlinkd.in/hdelcastillo@hmdelcastillohmdelcastillo@aipmm.com