PRODUCT MANAGEMENT

LEARNING OBJECTIVES:
After studying this chapter, you should be able to: 1. Understanding the principals of product management 2. Outlining the role of a product manager 3. Discussing the different approach of product management via the organizational structure 4. Highlighting the skills needed in managing a product 5. Discussing the challenges facing product management

CHAPTER OUTLINE
1.

2.
3. 4. 5. 6.

Introduction A product managers potential interaction Product Vs. General Marketing Management Marketing Organization Critical Skills in Product Management Challenges Affecting Product Management

INTRODUCTION

The planning activities related to the management of product(s) or product line Obtaining organizational support for the marketing plan

A PRODUCT MANAGERS POTENTIAL INTERACTION

Manufacturin g& distribution Advertisin g Agency Media Promotion services

R&D

Packaging

Product Manage r
Legal Purchasin g

Fiscal Market Researc h

Publicit y

Sales

PRODUCT Vs. GENERAL MARKETING MANAGEMENT

Product Management General Marketing Management Broad: Portfolio of products Mainly strategic

Scope of Responsibility Nature of Decision Making Time Horizon

Narrow: Single product or product line Mainly tactical

Short-run (often annual or shorter)

Long run

MARKETING ORGANIZATION: PRODUCTFOCUSED ORGANIZATIONS

Head of company/division

Manufacturing

Marketing

Finance

Corporate communications

Marketing research

Product management

Support

Manager of product A

Manager of product B

Manager of product C

MARKETING ORGANIZATION: PRODUCTFOCUSED ORGANIZATIONS

Advantages Locus of responsibility is clear Develop the ability to work with other areas in org. Advocate for the product

MARKETING ORGANIZATION: PRODUCTFOCUSED ORGANIZATIONS

Weaknesses Focus on one product Removed from where the action is Too myopic In-bred competition (product cannibalization)

MARKETING ORGANIZATION: MARKETFOCUSED ORGANIZATIONS

Head of company/division

Manufacturing

Marketing

Finance

Corporate communications

Manager, market A

Manager, market B

Manager, market C

MARKETING ORGANIZATION: MARKETFOCUSED ORGANIZATIONS

Advantages Focus on customer Resource & knowledge sharing Work well for system or bundle sale

MARKETING ORGANIZATION: MARKETFOCUSED ORGANIZATIONS

Weaknesses Potential conflict within the product management structure Locus of responsibility is ambiguous

MARKETING ORGANIZATION: FUNCTIONALLY FOCUSED ORGANIZATIONS

Head of company/division

Manufacturing

Marketing

Finance

Corporate communications

Product marketing

Advertising

Sales promotion

Marketing research

MARKETING ORGANIZATION: FUNCTIONALLY FOCUSED ORGANIZATIONS

Advantages Administratively simple Specialization Well-coordinated

MARKETING ORGANIZATION: FUNCTIONALLY FOCUSED ORGANIZATIONS

Weaknesses Who is ultimately responsible for the product? Focused only on functional development

CRITICAL SKILLS IN PRODUCT MANAGEMENT

Negotiation Teamwork Communication skills Analytical ability

CHANGES AFFECTING PRODUCT MANAGEMENT

Internet Data explosion Increased emphasis on brand equity Changes in the balance of market power Increased importance of customer retention programs Global competition