Product Management Reviewer classic marketing mix –

INTROUCTION PRODUCT MANAGEMENT • the right Product

• in the right Place,
History: • right Price,
• right Promotion.
1931 - Modern product management started with a
memo written by Neil H. McElroy at Procter & Gamble. Thus Product Management in FMCG (fast moving
It started as a justification to hire more people but consumer goods) increasingly became a marketing
became a cornerstone in modern thinking about brand communications role, concerned with getting the right
management and ultimately product management. mix of packaging, pricing, promotions, brand marketing
and others leaving the development of the product to
1943 - McElroy got his two hires. He also got P&G to others.
restructure into a brand-centric organization and led to
the birth of the product manager in the FMCG field. Today also, Product Management is increasingly a stand-
McElroy later became Secretary of Defense and helped alone function with a seat at the management table and
found NASA, proving all product managers are destined reporting directly to the CEO.
for greatness, but he also advised at Stanford where he
influenced two young entrepreneurs called Bill Hewlett Product management is a function within a company
and David Packard. dealing with new product development, business
justification, planning, verification, forecasting, pricing,
1948-1975 - Meanwhile, in post-war Japan, shortages product launch, and marketing of a product or products
and cashflow problems forced industries to develop at all stages of the product lifecycle.
just-in-time manufacturing. Taiichi Ohno and Eiji Toyoda
(the nephew of Toyota’s founder and eventually chief Product management is divided into:
executive and chairman of Toyota Motor) took this idea
and ran with it – developing the Toyota Production 1. Inbound (product development)
System.
2. Outbound (product marketing).
Toyota Way over 30 years of continuous improvement,
focusing not just on eliminating waste in the production Product management key functions in organizational
process but also on two important principles any structure:
modern product manager will recognize: Kaizen –
improving the business continuously while always • Research and Development/Design
driving for innovation and evolution and Genchi • Manufacturing
Genbutsu – to go to the source to find the facts to make • Industrial Engineering
correct decisions. • Quality Control
• Sales and Marketing
1990’s - AGILE advocates to minimize documentation
task and invest more time on core development activity, GROUP 1 - PRODUCT LIFE CYCLE
however the degree of documentation differs in
different approaches: Refers to the length of time from when a product is
introduced to consumers into the market until it' s
• XP (Xtreme Programming), Scrum, ASD (Agile removed from the shelves.
software development) & Crystal don’t put a
lot of emphasis on documentation and The process of strategizing ways to continuously support
minimum documents are created. and maintain a product cycles. The life cycle of a product
• Teams following FDD spend sufficient amount is broken into four stages—introduction, growth,
of time in documentation. maturity, and decline.
• DSDM requires some documents to be created
& degree of documentation is less than that of NEW PRODUCT IDENTIFICATION
FDD and more than that of XP.
A broad category of labeling that includes functions such
2010 - Finally, these principles have permeated further as product traceability, brand protection, and various
into the business with the development of lean practices information labels. With a rapidly changing business
and the development of Lean Startup and Lean environment and constant threats from theft and
Enterprise, which build on the Japanese Kaizen tradition counterfeit products, product identification labeling is
of continuous improvement and apply the agile critical.
approach not just to product development but to the
business itself. NEW PRODUCT DEFINITION

A new product is a product that is new to the company

introducing it even though it may have been made in
same form by others.
NEW PRODCUT DEVELOPMENT potential, profitability, and strategic fit, to determine
which ideas should be pursued further.
"New products are those whose degree of change for
customers is sufficient to require the design or re-design CONCEPT DEVELOPMENT AND TESTING
of marketing strategies.”
The process of refining and testing new ideas, products,
SIX NEW CATEGORIES OF NEW PRODUCT or services before they are launched in the market.

• NEW TO THE WORLD The following steps of concept development & testing:
• NEW PRODUCT LINES
• ADDITION TO THE EXISTING LINES • Idea Generation
• IMPROVEMENTS IN REVISION TO • Concept Screening
EXISTING PRODUCTS • Concept Development
• REPOSITIONING • Concept Testing
• COSTS REDUCTIONS • Marketing Strategy Developments

PRODUCT LAUNCH AND GROWTH MARKETING STRATEGY

Product launch refers to a business’s planned and Is a long-term plan for achieving a company's goals by
coordinated effort to debut a new product to the understanding the needs of customers and creating a
market and make that product generally available for distinct and sustainable competitive advantage.
purchase.
BUSINESS ANALYSIS
PRODUCT DISCONTINUATION
The process of developing information, knowledge, and
Occurs when a product isn’t doing well on the market, is plans for business change.
too expensive, or is being replaced by a new, improved
model. TECHNICAL DEVELOPMENT

GROUP 2 - PRODUCT PLANNING SYSTEM is any method of marketing Focused on the

specifications and key features of a product, designed to
PRODUCT PLANNING appeal to customers with a base technological
understanding of the product.
Product planning is the research, development,
creation, and market strategy involved with launching a TESTING
product. It’s also an ongoing process that allows a
business firm to continually market a product to their The process of determining how products will perform
target audience by monitoring customer interaction among a target audience. It is a way to verify a product's
with it. safety and compliance with regulations and ensuring the
prototype works as planned.
NEW PRODUCT STRATEGY DEVELOPMENT
2 types of Testing:
The process of creating a plan for introducing a new
product into the market. It involves researching and - Alpha Testing
analyzing the target market, understanding customer - Beta Testing
needs and preferences, identifying gaps in the market,
developing product concepts, and testing and refining ALPHA TESTING
the product until it is ready for launch.
is an internal form of user acceptance testing.
IDEA GENERATION
BETA TESTING
The process of creating new, innovative, and creative
ideas that can be used to solve problems, generate is an external form of user acceptance testing and the
opportunities, or develop new products, services, or final testing stage before releasing the product to the
processes. It involves brainstorming, researching, and market.
exploring various possibilities to come up with novel
COMMERCIALIZATION
ideas.
is the process of bringing new products or services to
IDEA SCREENING
market. The launch or commercialization of a new
product is considered the final stage of new product
The process of evaluating and filtering ideas generated
in the ideation stage to identify those that have the development (NPD).
most potential for success. It involves assessing each
idea based on various criteria, such as feasibility, market
GROUP 3 – PRODUCT LINE DECISION 4 Dimensions:

PRODUCT DECISION Width – pertains to the number of product lines that the
organization is offering.
Product decision in marketing refers to the company’s
mindful decisions, major or minor regarding their Length - pertains to the total number of products or
product. items in the product mix.

Factors affecting product decision: Depth – pertains to the total number of variants of each
product offered in the line. Variants includes size,
• Growth colour, flavors, and other distinguishing characteristics.
• Cash Flow
• Market Share Consistency - refers to how closely related the various
• Profitability product lines are in use, production, distribution, or in
any other manner.
Major Product Decisions
PRODUCT MIX DECISION
• Original Product
• Modified Product refers to the decisions regarding adding a new or
• Development of product eliminating any existing product from the product mix,
adding a new product line, lengthening any existing line,
PRODUCT LINE or bringing new variants of a brand to expand the
business and to increase the profitability.
A product line is a group of related products all
marketed under a single brand name that is sold by the PRODUCT MODIFICATION
same company.
Changing one or more of the product's features and may
PRODUCT LINE DECISIONS involve reformulation and repacking to enhance its
customer appeal.
A company offers similar products to solve a whole
range of similar problems that target customers have. PRODUCT WITHDRAWAL

ex. Smartphone manufacturer, Samsung and Apple a manufacturer stops selling a particular product either
permanently or for a period of time, usually because of
PRODUCT LINE EXTENSIONS a safety problem.

A product line extension is the use of an established GROUP 4 – PRODUCT LIFE CYCLE
product brand name for a new item in the same product
category. A product life cycle is the amount of time a product goes
from being introduced into the market until it's taken off
the shelves. It consists of four stages: introduction,
growth, maturity, and decline.

INTRODUCTION

A new product enters the market hand becomes known

to consumers.

PRODUCT LINE DEPTH GROWTH

Tells us about the varieties of the products that a It continues to gain popularity and generate revenue.
company sells.
MATURITY
PRODUCT LINE CONTRACTION
it becomes well- established in the market.
Refers to the marketing strategy of a company to reduce
the number of different products it sells to concentrate SATURATION
its resources on its most popular products.
Sales depend upon basic economic indicators; Company
PRODUCT MIX profit starts to decrease.

Also called product assortment refers to the number of DECLINE

product lines that an organization offers to its
customers. The products sales and profitability decline. it is
removed from the mark.
TYPES OF CONSUMERS AT DIFFERENT STAGES: SWOT ANALYSIS

• Loyal Customers Is a framework used to evaluate a company's

• Impulse Shoppers competitive position and to develop strategic planning.
• Wandering Consumers SWOT analysis assesses internal and external factors, as
• Bargain Hunters well as current and future potential.
• Need-Based Customers

Strategies in PLC

• Product Strategy
• Pricing Strategy
• Place Strategy
• Promotion Strategy

Benefits of PLC

• Strategies
• Decision Making
• Forecasting Sales becomes Easier
• Competitive Advantage
• Saying Goodbye

Limitation of PLC

• fluctuations in Sales Data

• Delay in Sales Data
• Varying Market Conditions
• Effect of other Elements The Ansoff Matrix, often called the Product/Market
• Not Applicable to Brands and Services Expansion Grid, is a two-by-two framework used by
management teams and the analyst community to help
GROUP 5 – PRODUCT PORTFOLIO plan and evaluate growth initiatives. In particular, the
tool helps stakeholders conceptualize the level of risk
Product portfolio management therefore seeks to associated with different growth strategies.
provide a comprehensive view of all the products a
company produces. This strategy allows for agile
portfolio management as considerations are made for
changing market conditions, the products of
competitors, and even regulatory requirements.

The Boston Consulting Group (BCG) growth-share

matrix is a planning tool that uses graphical
representations of a company’s products and services in
an effort to help the company decide what it should
keep, sell, or invest more in.
GROUP 6 – PRODUCT PRICING GROUP 7 – BRANDING DECISION

Product pricing is a strategy that determines the value BRANDING

of a product to a consumer when they make a
purchasing decision. Branding is the process of creating a distinct identity for
a business in the mind of your target audience and
Objectives of Pricing: consumers. At the the most basic level, branding is
made up of a company's logo, visual design, mission,
• Profit Oriented and tone of voice.
• Sales Oriented
• Competition Orientend bRANDING DECISION

PRICING STRATEGIES - Cost-plus pricing is one of the It is to identify and manage the number and nature of
more common pricing mechanisms used – often by common & unique elements or value propositions
grocery and department stores with a wide range of adopted for a set of products sold by a firm. So, a brand
common products, as well as smaller businesses who strategy decision involves a set of decisions to add or
aren’t able to spend huge amounts on market research. maintain several brand elements to its product
portfolio.
COST + MARK UP = PRICE
BRAND NAME
PENETRATION PRICING
one with a popular name that is typically highly
It’s when a business looking to break their product into regarded or marketable.
a market offers a low initial price point in order to reel
buyers in and lure them away from competitors. TYPES OF BRANDING:

ECONOMY PRICING • Personal branding.

• Product branding.
This type of pricing strategy usually goes hand-in-hand • Service branding.
with low production costs. Economy pricing is where • Retail branding.
budget items live. • Cultural and geographic branding
• Corporate branding
PRESTIGE PRICING • Online branding
• Offline branding
Is a strategy used by product marketers where they
maintain an increased price of a product to show its high VALUING BRAND EQUITY
value.
is the value premium that a business derives from a
PRICE SKIMMING product with a well-known name as compared to a
generic version.
Price skimming is about setting the price of a new
product high to capitalize on consumer demand, and
BRAND PERSONALITY
then eventually lowering it over time.
Refers to a group of human qualities attached to a brand
BUNDLE PRICING name. An effective brand develops its brand equity by
exhibiting a reoccurring set of characteristics that appeal
it is a strategy where a business sells a bundle of goods
to a certain consumer group.
together.

PREMIUM PRICING

Involves businesses that create high-quality products

and market them to high-income or net-worth
individuals.

PYSCHOLOGICAL PRICING

is a pricing strategy that impacts the consumer’s

subconscious mind, including pricing the goods and
services slightly lower than a whole number.