Product Management Issues Faced

Amity Business School
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AMITY BUSINESS SCHOOL
MBA (GEN) 3rd SEM
PRODUCT AND BRAND MANAGEMENT
Faculty: Ms.Versha Khatri
Product Management Issues

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PRODUCT MANAGEMENT
• A Product is anything that can be offered to a market to solve a problem or
satisfy a want or need. It has a life cycle with multiple stages. A product is
conceived, developed, introduced and managed in the market, and retired when
the need for it diminishes. A product can only be developed within the context of
a project, and multiple projects can occur within a product’s life cycle.
• Product management is an organizational lifecycle function within a company
dealing with the planning, forecasting, and production, or marketing of a product
or products at all stages of the product lifecycle. Similarly, product lifecycle
management (PLM) integrates people, data, processes and business systems. It
provides product information for companies and their extended supply chain
enterprise.

• The product manager is often responsible for analyzing market
conditions and defining features or functions of a product and
for overseeing the production of the product. The role of
product management spans many activities from strategic to
tactical and varies based on the organizational structure of the
company. To maximize the impact and benefits to an
organization, Product management must be an independent
function separate on its own.
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Product management issues can be analyzed on the basis of 3 sub
analysis:
1. Category Attractiveness Analysis
2. Competitor Analysis
3. Customer Analysis
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PRODUCT MANAGEMENT ISSUES

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• Product category defines set of competitors against which one
most often competes on a daily basis.
1. Aggregate Market Factors
2. Category Factors
3. Environmental Factors
CATEGORYATTRACTIVENESS
ANALYSIS

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1. Category size
2. Category growth
3. Stage in product life cycle
4. Sales cyclicity
5. Seasonality
6. Profits
Aggregate Category Factors

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Attractiveness of Market Variables
MARKET SIZE + -
MARKETGROWTH + -
SALES CYCABILITY - +
SALES SEASONABILITY - +
PROFIT LEVEL + -
PROFIT VARIABILITY - +
ATTRACTIVENESS HIGH LOW

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Category Attractiveness over the Product Life Cycle

CATEGORY FACTORS
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1.Threat of new entrants
2. Bargaining power of buyers
3. Bargaining power of suppliers
4. Current category rivalry
5. Pressure from substitutes
6. Category capacity

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THREAT OF NEW ENTRANTS
Can be managed by creating high entry barriers like:
1. Economies of scale
2. Product differentiation
3. Capital requirements
4. Cost
5. Distribution

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Buyer Bargaining Power is High When:
•Product bought is a large percentage of the buyer’s cost.
•Product bought is undifferentiated.
•Buyers earn low profits.
•Buyer has full information.
•Substitutes exist for the seller’s product or service.
•Buyers have formed a union

Supplier Bargaining Power is High When:
1. Suppliers are highly concentrated, that is, dominated by a
few firms. (OPEC)
2. There is no substitute for the product supplied. (Petrol)
3. Supplier has differentiated its product or built in switching
costs. (Providing raw materials that are not provided by any
other)
4. Supply is limited.
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Major Characteristic of Categories Exhibiting
Intensive Rivalries
1. Many or balanced competitors.
2. Slow growth
3. High fixed costs
4. Lack of product differentiation
5. Personal rivalries

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Pressure from substitutes
- As the substitutes are more, category is lesser
attractive and as they are less, it is more.
Category capacity
- If category unused capacity is high, bargaining
power of buyers are more.

Impact of Category Factors on Attractiveness
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ATTRATIVENESS HIGH LOW
Threat of New Entrants - +
Power of buyers - +
Power of suppliers - +
Rivalry - +
Pressure from substitutes - +
Unused Capacity - +

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Environmental Factors
1. Technological
2. Political
3. Economic
4. Regulatory
5. Social

COMPETITOR ANALYSIS
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• Identifying your competitors and evaluating their strategies to determine
their strengths and weaknesses relative to those of your own product or
service .
• A competitive analysis is a critical part of your company marketing plan.
With this evaluation, you can establish what makes your product or
service unique--and therefore what attributes you play up in order to
attract your target market.

Competitor Analysis System
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Quantitative Data
Analysis
Qualitative Data
Analysis

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Quantitative data analysis
Quantitative analysis applies statistical models to measure
market conditions and product related factors with respect to
your competitors. This gives not only information about your
adversaries, but also the standing of your own business and how
you can improve / refine strategies to gain advantages. These
specific factors are analyzed:
• Target audience analysis.
• Brand Equity / Recall.
• Key drivers in the market for your products / services.
• Compare product attributes with that of your competition.

Qualitative data analysis
Qualitative analysis includes using web based research methods
to collect and analyze competitive intelligence information. A
detailed report is prepared at the end of the analysis. The data is
found on the internet, relevant information is extracted and
organized into an easy-to-comprehend format and the
unnecessary data is left out.
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COLLECTION OF DATA
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Secondary Primary
Who are they?
What are their competing features?
What are their current strategies?
Assessing competitors current objectives
Different Competitors Advantage Analysis
Predicting future strategies of competitor
What are they going to trade?

DIFFERENTIAL COMPETITOR ADVANTAGE
ANALYSIS
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1. Ability to Conceive and Design.
2. Ability to Produce
3. Ability to Market
4. Ability to Finance
5. Ability to Manage

1. Ability to Conceive and Design
A) Technical Resources
- Concepts
- Patents and Copy Rights
- Technical Integration
B) Human Resources
- Key people & Skills
- Use of External Technical Groups
C) Research & Development Funding
- Funding
- Percentage of Sales
- Internally Generated
- Government Supplied
D) Technological Strategy
E) Management Process
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2. Ability to Produce
A) Physical Resources
- Capacity
- Plant (size, location & age)
- Equipment (Automation, Maintenance, Flexibility)
- Processes
B) Human Resources
- Key People & Skills
- Work Force
C) Suppliers
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3. Ability to Market
A) Sales Force (Skills, location, size)
B) Distribution Network
C) Service & Sales Policy
D) Advertising
E) Human Resource
F) Funding
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4. Ability to Finance
A) Long Term
B) Short Term (type of debt, cost of debt)
C) Cash Flow
D) Human Resource
E) System
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5. Ability to Manage
A) Key People
B) Decision Making
C) Planning
D) Staffing
E) Organization
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Customer Analysis
Customers are the lifeblood of any business. The
Product Manager has to know who are his
prospective and current customers as well
as his competitors. This would help in creating a
strategy for each customer segment.
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What We Need to Know About Customers:
• Who buys and uses the product?
• What customers buy and how they use it?
• Where customers buy?
• When customers buy?
• How customers choose?
• Why customers choose a product?

WHO BUYS THE PRODUCT?
Initiator (identifies the need)
Influencer (has the informational and preferential input into
the decision)
Decider (makes final decision through budget authorization)
Buyer (makes the actual purchase)
User
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WHO BUYS THE PRODUCT?
• Consumer market
It can be divided into following categories:
1. Demographic
2. socio-economic
3. Personality
4. Psycho-graphic
5. Behavioral.
• Business market
It can be segmented according to company size, industry,
location and other factors such as
1. Operating variables,
2. Purchasing approaches
3. Situational
4. Personal.

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Demographic:
- Industry (what should we focus on)
- Company Size
- Location (Area to Focus on)
Operating Variables:
- Technology
- user or non-user status
- Customer Variable
Purchasing approaches:
- Purchasing function organization
- Power structure
- General purchase policies (Lease, Service Contracts)
- Purchasing Criteria (Quality/Service/Price)

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Situational Factors:
- Urgency
- Specific Application
Personal Characteristics:
- Buyers Sellers Similarity
- Attitude towards risk
- Loyalty

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WHERE DO CUSTOMERS BUY?
An analysis of where customers make purchase decisions is a
critical input into decisions about the channels of distribution. The
channels must adapt to changing patterns of customer
purchase location.
Channels are not fixed because customers migrate to other
channels as their information needs and other market conditions
change

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CUSTOMER ANALYSIS ILLUSTRATION :
Energy Bars Customer Segments:
‘Hard-core Athletes’
‘Musclemen’
‘Dieters’
‘Health Purists’
‘Health Conscious and On-the-Go’
‘Sports Enthusiasts’
‘Specialty Segments’
‘Nutrition-seeking Families’

Desirable Criteria for Segments
1. Sizable
2. Identifiable
3. Respond Differently
4. New Product Development
5. Causes of New product Failures
- Idea Generation
- Competitor Action
- Product Modification
- Idea Screening
6. Marketing Strategy Development
7. Business Analysis
8. Product Development
- Test Marketing
- Commercialization
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TATA NANO
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Tata Nano’s Target Market
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- When we talk about ‘Tata Nano’ it is failure in the market because
of heavy competition and product management issues like the cost
is more than 1 lakh, when it is introduced in market the cost is 1
lakh but after a period of 6 months the cost is increased to 1.36
lakhs which affect the trust factor of customers and on the other
hand Maruti introduced ‘Alto 800’ in same segment which is with
more features and with low EMI people can easily afford that car.
- The South Korean giant decided to step in this ever growing
segment in India with Hyundai i10. The cheap middle class car was
gradually picked up because of its best in class features and low
maintenance cost.
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- Maruti is quickly improvising and changing its strategies to
compete in this category. By introducing new features in their
cars plus making fuel efficient cars which is needed for every
middle class family in India.
- These Factors affected the performance of TATA Nano in the
Indian market.
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THANK YOU
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Product Management Issues Faced

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