Why Product Managers are worth their weight in gold

Why Product Managers are worth their weight in gold

Part 1: Product Managers Gold Series – Setting Strategic Direction

This is Part 1 of a series of articles we will publish on the role of the Product Manager within the new product development process.

A Product Manager plays one of the most valuable roles within your organization: managing the ongoing profitability and viability of their product/category. This very broad and critical charge requires attention to specific responsibilities requiring specific skills and talents. This article will focus on the responsibilities as they relate to new product development.

The driving force of a product/category is its strategic direction and framework.  For your company’s innovation/new product development efforts this includes the set of Product, Platform, Market and Technology strategies, as well as Product and Technology Roadmaps.   These elements focus resources on activities that translate into innovative, differentiated and profitable products. A Product Manager that defines and executes appropriate strategies that yield a sustainably profitable product/category is truly worth their weight in gold.

Before your Product Manager gets started

In order for your Product Managers to develop the appropriate strategic framework, they first need clearly stated and communicated business and innovation strategies defined by senior management.

The business strategy defines the long-term direction, or mission, of the organization, how the organization will achieve that mission, and what measurements will allow the organization to identify progress against or achievement of that mission.

The innovation strategy defines in what ways and to what extent the organization will use innovation to execute its business strategy. This boils down to defining what resources and the extent of resources to be allocated to innovation, and the types of innovations or levels of risk the organization will undertake in the pursuit of innovation.

Why is strategy so important? We’ve worked in organizations that have clearly stated strategies and those that don’t.   The difference between the two is like night and day.  If I had to choose two words to describe the company with strategies, and those without it would be ‘clarity’ vs. ‘chaos’.

The organizations with strategies provided clarity to the team and organization.  The strategies provided direction on where the organization was going, and how it was going to get there.  Everyone had their marching orders, they knew what to do and their efforts were aligned.  It was not uncommon to see the Product Managers continually referring to these strategy documents because they provided a framework and an understanding of the resources and constraints they have to work with.

In contrast, in organizations without clearly stated business and innovation strategies we’ve seen a lot of valuable time wasted by product managers forced to develop their product/category strategies in a vacuum, trying to  infer the direction of the organization or worse, setting direction without regard to the mission of the larger organization.  This situation creates chaos for the entire organization as the various functions try to cope with different agendas, different resource requirements and different priorities.

It takes effort and time on the part of senior management to develop business and innovation strategies, but the payoff is tremendous.   Ensure that your Product Managers are well-equipped with the strategic direction of your organization.  They will then be able to develop appropriate and aligned strategies for their products/categories.

The Product Manager’s role in defining new product development strategy

The following content provides an overview of the five key strategy documents that Product Managers should consider when developing their product/category strategy framework for guiding new product development.

Product Strategies

Product strategies help guide your organization in the development and evolution of categories, product lines and products.  The product strategy includes the goals for new product development within each category ( e.g. market share, revenue, new markets), the arenas of strategic focus (the markets, technologies, product types to be focused on), spending/resource allocation for each arena and a  timeline showing the planned new product introductions.

Platform Strategies

Platforms enable your organization to create new products faster and more efficiently by bundling together elements that can be common across multiple product lines.  A platform strategy guides your organization in the development of platforms and derivative products.  The important elements of the platform strategy are defining the capabilities and limitations of the platform, as well as creating the platform’s point of differentiation.  The platform strategy is also an integral part of developing product and technology roadmaps.

Market Strategies

Market strategies guide your firm in the development of markets and distribution channels.  The market strategy defines who the target customer is, what segments will be served, what is the value proposition or point of differentiation when compared to the competition, and what distribution channels are needed to reach the customer.

Technology Strategies

Technology strategies guide your organization in the acquisition, development and application of technology to gain a competitive advantage.   The elements of the technology strategy include identification of the source of technology, as well as the timing of implementation to support the product strategy timeline.

Product and Technology Roadmaps

Product and Technology Roadmaps provide the graphical representation of the current and planned evolution of products and platforms that match market need to specific technologies.   They basically illustrate the portfolio of projects that the organization needs to work on in order to achieve its business strategy and be successful.  It especially helps the organization with forecasting required technology and the skills that need to be acquired.

Communicating the New Product Development Strategy

To be effective, these strategies must be agreed to and supported by senior management, and clearly communicated to everyone involved in new product development. Progress against these strategies needs to be openly and continually monitored, with adjustments made to react to changing market, industry and technology conditions. We recommend monthly new product development portfolio review meetings and quarterly strategy meetings with the Product Managers presenting their findings to the senior management team.

Product Managers have the ability to make a real difference for your bottom-line.   You will quickly realize that they’re worth their weight in gold by 1) Ensuring your product managers have access to business and innovation strategies created by senior management, 2) Ensuring your product managers have the time to create and update their product strategies on an on-going basis, 3) Communicating the new product development strategies to senior management and the project teams, and regularly monitoring progress.

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Facets of Product Management

In this article, I myself will try and understand the role of Product Manager and of Product Marketing Manager:

It Is What You Define It Is!

CTO : This is why he would like to have a role of Product Manager : He wanted someone to document all the features in their product (which had already been created) in one Word document so that they can understand what features were in their product. He also said he didn’t want the PM team to “muck around with defining features or product strategy” because between him and the VP of Engineering, they had it covered.

VP – Engineering : This is why he would like to have a role of Product Manager :- “What is the biggest reason you want to build a product management team?”. He told me that he wanted someone to create UML diagrams of the current product as well as for all the new features that he planned to come up with so that developers could implement them.

What Do Product Managers Do?
While the role of a PM varies widely depending on the company, there are several key responsibilities that product managers usually undertake at a vast majority of successful high-tech companies – based on my research and as well as conversations with friends in the industry. Here is how you can group them:

i.        Market Research:

This refers to the activities of studying a market to understand the customer needs, competitive landscape, and market forces – with the ultimate goal of uncovering opportunities for creating product enhancements as well as new products.

This is done via conversations with customers or potential customers, talking to customer-facing teams such as sales and support, studying reports and articles on the marketplace, test driving competitive products, keeping tabs on customer behavior, and other such activities.

This culminates with the PM preparing a business case, product strategy and/or business requirements document (BRD) detailing how to capitalize on the uncovered opportunities.

ii.        Product Definition and Design:

a) Product Definition refers to the activities of specifying what a product needs to do. This is usually done via what is referred to as Market Requirements Document (MRD) or Product Requirements Document (PRD). This document may include information such as product vision, target market, competitive summary, detailed description of product features, prioritization of features, use cases, system requirements, performance requirements, sales and support requirements, etc.

b) Product Design refers to the activities of specifying the look and feel of the product including the user interface (UI) and the user interaction with the product – covering the whole spectrum of user experience. In larger companies the PM works with UI designers or interaction designers to create this, while in startups the PM may do all of these.

I consider this to be the most valuable among a PM’s activities – so much so that I actually think product manager jobs which don’t include this responsibility are really not product manager jobs at all!

iii.        Project Management:

This refers to the activities of leading cross-functional teams including engineering, QA, UI design, marketing, sales and support to develop and launch the product on-time and on-budget. This may include securing resources, creating project timelines, tracking progress against timeline, identifying critical paths, getting additional resources when needed, and communicating status to the executive team.

In larger companies, Project Managers actually perform most of these activities with the support of PM’s. In very small startups, the PM may be asked to do these by herself. In some companies, the Engineering Lead may do most of these activities as well.

iv.        Evangelizing the Product:

This includes the activities of communicating the product benefits, features and target markets, and in general championing the product to internal teams such as sales, marketing, support and executives. This also includes evangelizing the product to external audience such as press, analysts and customers.

In larger companies, the PM is supported by the Product Marketing, Marketing Communications (MarCom) and/or Press Relations (PR) teams in evangelizing to external audience.

I consider this to be the second most valuable among a PM’s activities – especially evangelizing to the sales & marketing teams, and the executives to create excitement around the product.

v.        Product Marketing:

 

This refers to the activities of outbound messaging – telling the world about the product. This includes creating collateral such as datasheets, brochures, website, flash presentations, press packages, trade shows and more.

In larger companies, the product marketing activities are almost always separated from the PM. They’re instead performed by the Product Marketing Manager. The biggest shortcoming of this arrangement is the resultant inefficiencies in communication and the weakening of outbound messaging.

In some companies the terms ‘Product Management‘ and ‘Product Marketing’ are used synonymously and one person is responsible for all activities. In companies where there are separate ‘Product Management’ and ‘Product Marketing’ groups, the latter group performs all the activities mentioned in this category.

vi.        Product Life Cycle Management:

This refers to the activities of managing a product as it goes through its life cycle from ideation to launch to growth to maturity, and eventually to decline.

This includes tasks such as product positioning, pricing and promotion, product portfolio management, competitive strategy, making build/buy/partner decisions, and identifying and developing partnerships. The PM works with Product Marketing, Business Development and MarCom teams on many of these activities.

There you have it – my attempt at demystifying the role of product management.

 

Marketing and New Product Development

Marketing management plays a key role in the new-product-development process along with the research and development department and other related departments.

New Products

The consulting firm Booz, Allen & Hamilton has identified six categories of new products in terms of their newness to the company and the marketplace.

New-to-the-world products (Product new to the company and the market)

New product lines: New products that allow a company to enter an established market for the first time (the product is new to the company not the market)

Additions to existing product lines: New products that supplement a company’s established products lines (package sizes, flavors, and so on)

Improvements and revisions of existing products: New products that provide improve performance or greater perceived value and replace existing product (Improvements in features and benefits of a product)

Repositionings: Existing products that are targeted to new markets or market segments (to be called a new product there must be some changes in the existing product to suit the new segments targeted).

Cost reductions: New products that provide similar performance at lower cost to the company.

Kotler says only 10% of all new products are truly innovative and new to the world.

New product development in various categories mentioned above is very important for any organization because existing products are vulnerable to changing consumer needs and tastes, new technologies, shortened product life cycles, and increased domestic and foreign competition.  Organizations have to be on the lookout for new products.

Factors That Contribute to Success in New Product Marketing

Madique and Zirger found the following factors:

1. Deep understanding of the customer needs.

2. High performance to cost ratio of the product

3. Being the early entrant into the market

4. Higher contribution margin

5. Larger amount of marketing expenditure

6. Strong top management support

7. Greater cross-functional teamwork among R&D, Engineering, Manufacturing, Purchasing, Marketing and Finance from the beginning

Effective Organizational Arrangements for New Product Development

An effective new product development organization starts with top management. The amount of money spent on R & D is an important top management decision related to new product development. Companies give the responsibility for new product development to product mangers, or new-product managers, or new-product committee, or new-product department, or new-product venture teams. In general product managers may not be able to devote adequate time to new products as they have to take care of existing products’ marketing and selling issues.

Managing the New Product Development Process

Eight stages are involved in the new product development process.

1. Idea generation

2. Idea screening

3. Concept development and testing

4. Marketing strategy development

5. Business analysis

6. Product development

7. Market testing

8. Commercialization

Idea Generation

A number of creative idea generating techniques can help individuals and groups generate idea. Some of them are:

  • Attribute listing
  • Forced relationships
  • Morphological analysis
  • Need/Problem identification
  • Brain storming
  • Synectics

Idea Screening

The purpose of screening is to drop poor ideas as early as possible and allow only promising ideas for further stage in the new product development process.

There is likelihood of two opposite types of errors occurring in this process. One, the drop error, results in dismissing a good idea. The other, the go-error, results in moving a poor idea forward.

Poor ideas result in product failures. Three types of product-marketing failures can be categorized: Absolute product failure loses money even on variable cost. Partial product failure recovers variable cost and some fixed cost. Relative product failure yields a profit, means it recovers variable cost and fixed cost, but the profitability is less than the company’s target rate of return.

Concept Development and Testing

A product concept is an elaborated version of the product idea and it is expressed in meaningful consumer terms so that consumer can visualize the product.

Concept testing involves an appropriate group of target consumers giving their reactions to the concept.

Will it Sell?

New Product Marketing Strategy Development

After the concept is finalized, marketing strategy needs to crystallized. At this stage the marketing strategy is expressed in three parts.

The first part: It describes the target market’s size, structure, and behavior. Product positioning is defined. The sales size, market share and profit goals are expressed.

The second part: The price and distribution strategy and the required marketing budget  for the first year are specified.

The third part: It describes marketing-mix strategy over time and evolution of sales and profit.

Business Analysis

At this stage, marketing department has finalized its market understanding and converted it into sales revenues and related marketing costs. The next stage is analysis of operating costs and profit analysis.

Product Development

If the business analysis clears the product, actual product development work is given to the research and development department

Test Marketing or Market Testing

High investment/high-risk products, where the chance of failure is high must be market tested. The cost of the market tests will be an insignificant percentage of the total project cost. Various types of market testing are:

Sales-wave research

Simulated test marketing

Controlled test marketing

Test Markets

 Commercialization

Based on marketing, if the company decides  to go for the manufacture and sale of the product, capacity decisions are to be made. The timing of the launch, the geography of the initial launch, the niche market within the target market and how to launch the product become important decisions.

Consumer Adoption Process

Marketers need to understand the new product adoption process to build an effective strategy for developing market for the product. Adoption is an individual’s decision to become a regular user of a product. The adoption process is followed by loyalty process.

Stages in the adoption process

Rogers defines the innovation diffusion process as “the spread of a new idea from its source of invention or creation to its ultimate users or adopters.”

Adopters go through the following five stages:

Awareness

Interest

Evaluation

Trial

Adoption

New product marketer has to aim his effort at facilitating the movement of consumer who is an adopter of new product  through the five stages.

References

 

Philip Kotler, Marketing Management (Main text for revision and article)

Modesto A. Maidique and Billie JO Zirger, ” A Study of Success and Failure in Product Innovation: the Case of the U.S. Electronics Industry,” IEEE Transactions on Engineering Management, November 1984, pp. 192-203

See Bibliography also

Bibliography

Determinants of New Industrial Product Performance: A Strategic Reexamination of the Empirical Literature by GARY L. LILIEN AND EUNSANG, 1989

http://www.garylilien.info/publications/47%20-%20Determinants%20of%20new%20industrial….pdf

New Product Successes in Japanese Consumer Goods Market,

Hotaka Katahira, Makoto Mizuno, and Yoram Wind, 1994, Wharton School Working Paper

http://marketing.wharton.upenn.edu/documents/research/9402_New_Product_Success_in_the.pdf

New Product Diffusion Models in Marketing: An Assessment of Two Approaches by Malcolm Wright and Don Charlett, Marketing Bulletin, 1995

http://marketing-bulletin.massey.ac.nz/V6/MB_V6_A4_Wright.pdf

Marketing Strategy : Mobile Applications

Developing a mobile app? Cutting edge social media marketing techniques can be combined with classic marketing tactics to ensure your success in the App Store.

After scoring millions of downloads and millions of revenue, popular mobile apps like “Angry Birds” or “Tap Tap Revenge” have become the gold standard for independent mobile application developers everywhere, as every new app strives to reach the weekly top downloaded app ranking or to become featured in the App Store. Clearly, besides being superlative products, both in their ease of use and their entertainment value, these apps also owe their commercial success in no small way to successful marketing, especially through viral marketing and word of mouth.

However, what should mobile developers consider if they were to emulate those experiencing success with their own applications? Is there a surefire secret sauce of mobile application developments that only a few savvy companies know and utilize to their great benefit?

A successful mobile application marketing is all about a good combination of tried and true software/technology marketing techniques and creative, innovative marketing tactics that rely on the unique mobile application distribution model.

Here are some key takeaways:

Pre-launch: To ensure launch success, mobile application developers should use a number of tactics to generate interest in their upcoming apps. These include word of mouth marketing, allowing  sneak/exclusive preview,  developing an attractive app website or landing page, distributing an app video, etc. Social Media place an important role, you get to advertise your app to wider genre of people.

– Just after Launch: Mobile application developers should focus intensely on user feedback gathering, lead generation (through paid advertisement), continuation of word of mouth campaigns, and immediate submission of the app to various mobile apps review websites. Websites like GetSatisfaction make your life so very easy during this time frame.

– Post Launch: Important tactics include app store listing optimization, submission to popular mobile app blogs, user generated content, creating user videos to maintain the marketing momentum and ensuring that the app continues to raise interests.

– On-going maintenance: Continue to grow the app’s presence online and in the app store by encouraging user generated content, considering the creation of a user community, pushing automatic updates, and maintaining blogs.

-Web marketing strategies can be used to help gain momentum for the application in the beginning. Paid advertisements, a launch website, and PR 2.0 efforts are all important in getting the app out of the gate.

– There are some tactics that are unique to the mobile application market such as App Store listing management and optimization (so that the apps can be found in as many relevant searches as possible).

Cross-selling and up-selling are important since the mobile app, once in use, has a captive audience that is perfect for these techniques.

Developing a great mobile application is just half of the battle to App Store domination. Savvy marketing techniques and judicious combinations of traditional and new age marketing tools are important to the ultimate success of your application and your revenue from the app.

Product Marketing Planning Process – II

Please click  for Part I  for first part of this series

After doing a competitive analysis of your product v/s the products that you have in market as your competitor, comes next is to study the performance of your product over the span of three years period.

Performance History:

  1. Existing Customers

In order for you to do the performance analysis of your product, this is what you should keep in your mind:

  • Is the primary target market growing, stable, or declining?
  • Under which circumstances do customer purchase the product?
  • Are most customer new or repeat buyers?
  • Are the customer end users? If not, then what info is available about end users?
  • How sensitive customer been to past price changes?
  • Does the customer base consist the few large customers or many small buyers?
         2. The Product
The analysis about the product should not only have Quantitative variables but also should include qualitative variables too.
  • What does the name of product implies?
  • For each feature you should ask “So What”?
  • Mark your product on a scale of 1 to 7 (7 being the highest)
  • What is the unit-break-even sales for the product?
       3. The Sales ForceAs a product manager, you do not have much control over sales force, but still you should be aware of the problems and the issues which would help you in making your Marketing Plan better.
  • Are the target customers reached in most effective manner?
  • How effective has the product/Sales training has been?
  • How the sales team is being trained to make sure they communicate the benefit of the product to concerned customers?
   4. PricingThe ‘Right’ price covers the all cost, and is positioned correctly to give product a competitive value. It also takes in to account the customer perceptions. As a product manager you should look for answers to:
  • Have significant amount of business being lost due to pricing?
  • Are errors too frequent in making a price guess?
  • Is your company a price leader or a price follower?
 4. The Promotional CampaignsThe Promotional campaign should be the part of an integrated marketing plan, and communication efforts.
  • What current image of the product is being perceived by your customer?
  • Did the Advertisement strategy decided by you, was a success? If yes, they why, if no, then why not?
  • Is your company a price leader or a price follower?
Trend Dynamics:
An examination of trend and their dynamics relative to a product’s success is the final part of the background analysis. You should try and attempt to have answers to all these:
  • What technological trends you foresee?
  • What have been the Industry trends in:
    Product changes
    Pricing
    Distribution changes
    Merger etc.
  • What are the basic trends in the economy?

Whenever possible, prepare for the changes, rather than being forced to do so…

 

Product Marketing Planning Process – I

This is a compilation of my learning from various books, articles, and posts. In this effort this will be a 2 part series to understand how the Product Marketing Planning process starts, and what are the essentials you should have to go for a solid Marketing approach. Happy Reading…
The product Marketing planning process should include the answer to the following three fundamental questions:
  • Where are you now?  (This is called BackgrProductound Analysis, we will discuss about this in this post.)
  • Where do you want to go?  (This we call as Synthesis.)
  • How you can get there? (This is your Action Program or Plan.)
In order to answer Where are you now?, you should do a Background Analysis:
Background analysis is a multi-step process, which accounts for
  1. Current Trend: Start the annual planing process by carefully assessing the Current status of your product and your company. You should look out for the problems that you may encounter during the fiscal year..at the same time you should look out for the opportunities to exploit.
  2. Segments:Segments are the groups of customers with common demographics, common needs and / or common uses for the products. You should divide your customer in the segments or groups so that you can allocate resources optimally and effectively. You should think about different ways, your customer can be reached out.The various factors that you should take in to account are Demographics, Application / use of the product, and the benefits.Your goal should be to find out the ‘Size Opportunities in new markets, and then invest resources accordingly”. For this you should estimate the size and your share of market under the competitive scenarios.You should profile, identify characteristics that distinguishes “likely” purchasers. In other words you should associate product’s performance in each segment.
  3. Competitive Analysis: You should start by asking yourself, whom yo have lost the most and who has bought you the most business or form where you have gained the most. Competitive Intelligence is an essential part of a Product Manager’s life…the essence is to understand the competition to avoid the threats and looses. There will be lot of information which will be available for you from your competitor…you just need to look around…you will find various publishing documents, Financial reports, competitive advertisements, promotional materials etc., and all this info is of great use. From the advertisement you can easily understand the positioning of the brand…and the specification can set the benchmark for your products.You should design a model that ‘win’ against competing products. This would involve you determining offers (features, price, and promotions) that optimize demands.Contd…

Social Media…what does it take to get noticed – Part 2

Continuing from where we left in 

https://seeingfuture.wordpress.com/2011/10/07/social-media-what-does-it-take-go-get-noticed/

Brand Campaign Integration
It’s possible for a social media program to piggyback off a good brand campaign
implemented by a brand’s agency of record, but it has to be transformed into the more
accessible, cooler younger brother of the formal campaign.

In other words, you don’t want to create a bunch of social media profiles that are over-
branded with your product or logo (and therefore off-putting). But it might make sense
to take your tagline (and the promise that comes with it) and build an audience whose
common interest is achieving that promise.  (It’s much easier to inspire community
around a cause or interest than it is to rely on a community based on an innate shared
interest in perpetuating your brand.)

Social Media…what does it take to get noticed – Part 1

Social Media…every one is invited, but what actually it takes to be and get noticed here?

  • Audience Generation
  • Social Media Listening
  • Community and Social Responsibility
  • Content Coordination
  • Internal community engagement and response
  • Overall Management
  • Customer Service
  • Brand advocacy
  • The humanization of Brands

so much of buzz words…what do they mean, how can we get notice, how my brand can make a difference?

As someone puts it:

Social Media isn’t a speech, it is a conversation…

Let’s see each and every aspect of Social media one by one…

Audience Identification:

If you know who your audience is, You’re already one step ahead of game. The next step is to find out as to how and where they are engaging…and interacting online:

  • What Platform are they using?
  • What are they talking about?
  • Who is popular?
  • What brands have they publicly condemned?
  • What brands have they publicly lauded?
  • What audiences demand particular attention?
Platform development and design
Now, once you are done with identifying your audience and figured out  where you should be connecting them online, its time to start thinking about developing your different profiles or building applications that users can spread throughout their communities.
Remember designing “aesthetically-pleasing” and “cool” are not strategies…

Some interesting observations

Assuming that there is a link between economic outlook and price sensitivity, the key takeaways for digital marketers are that when marketing to consumers between the ages of 18 and 49, deep price discounts are less important than when marketing to consumers over the age of 50.

This makes sense as it has direct correlation with buying habits…the impulsive buying habits v/s the thoughtful approach towards buying. It is quite reasonable too if you are coming up with discounts for the consumer of the age group over 50. This also gets highlighted due to the level of financial stability and independence.

A better understanding of customers and how their economic viewpoint changes over time is only the first step to becoming a well-informed digital marketer.

  • Group buying has reached mainstream adoption:

According to Experian Hitwise Demographics for the four weeks ending Jan. 29, 2011, the largest age-bin for visitors to Groupon.com are those Internet users over the age of 55 (37.5 percent).

This is in direct relation with purchasing habits. The more secured and thoughtful approach towards purchasing makes it reasonable for people of this age group to do a group buying.

  • Email is the driving force behind group buying:

While group coupon sites have often been characterized as the Web 2.0 of online shopping, social networking sites are not the driving force fueling their growth; that distinction belongs to email.

In analyzing the upstream traffic to a Website, or a category of sites, it is possible to visualize the “tipping point” of that site or category by looking at visits from social networks versus visits from another source such as search or Web-based email services.

During the very early phases of social buying, back in November 2009, visits to group coupon sites came predominately from social networks (49 percent) versus email (9 percent).

By the summer of 2010, social buying sites experienced a tipping point in source traffic, with email services assuming the role of traffic leader. Since most group coupon offers are driven by a daily deal delivered to consumers’ inboxes, the fact that email services account for more than 17 percent of traffic to the category is not surprising.