Product marketing Theory and

practices
Product marketing deals with the first of the "4P"'s of marketing,
which are Product, Pricing, Place, and Promotion.

Product marketing, as opposed to product management, deals with

more outbound marketing tasks. For example, product management
deals with the nuts and bolts of product development within a firm,
whereas product marketing deals with marketing the product to
prospects, customers, and others. Product marketing, as a job function
within a firm, also differs from other marketing jobs such as marketing
communications ("marcom"), online marketing, advertising, marketing
strategy, etc.

A Product market is something that is referred to when pitching a new

product to the general public. The people you are trying to make your
product appeal to is your consumer market. For example: If you were
pitching a new video game console game to the public, your consumer
market would probably be the adult male Video Game market
(depending on the type of game). Thus you would carry out market
research to find out how best to release the game. Likewise, a
massage chair would probably not appeal to younger children, so you
would market your product to an older generation.

Role of product marketing

Product marketing in a business addresses five important strategic

questions:

• What products will be offered (i.e., the breadth and depth of the
product line)?
• Who will be the target customers (i.e., the boundaries of the
market segments to be served)?
• How will the products reach those (i.e., the distribution channel
and are there viable possibilities that create a solid business
model)?
• At what price should the products be offered?
• How will customers be introduced to the products (i.e.,
advertising)?
Product marketing vs. product management

Product marketing frequently differs from product management in

high-tech companies. Whereas the product manager is required to take
a product's requirements from the sales and marketing personnel and
create a product requirements document (PRD),which will be used by
the engineering team to build the product, the product marketing
manager can be engaged in the task of creating a Marketing
Requirements Document (MRD), which is used as source for the
product management to develop the PRD.

In other companies the product manager creates both the MRDs and
the PRDs, while the product marketing manager does outbound tasks
like giving product demonstrations in trade shows, creating marketing
collateral like hot-sheets, beat-sheets, cheat sheets, data sheets, and
white papers. This requires the product marketing manager to be
skilled not only in competitor analysis, market research, and technical
writing, but also in more business oriented activities like conducting
ROI and NPV analyses on technology investments, strategizing how the
decision criteria of the prospects or customers can be changed so that
they buy the company's product vis-a-vis the competitor's product, etc.

One issue that faces Product Marketers is that they are chartered with
developing much of the content for the various constituents (sales,
marcom, customers, blogs, etc.). Creating content tends to be given
more value than the actual research and thinking that is behind all the
content.

In smaller high-tech firms or start-ups, product marketing and product

management functions can be blurred, and both tasks may be borne
by one individual. However, as the company grows someone needs to
focus on creating good requirements documents for the engineering
team, whereas someone else needs to focus on how to analyze the
market, influence the "analysts", and understand longer term market
direction. When such clear demarcation becomes visible, the former
falls under the domain of product management, and the latter, under
product marketing. In Silicon Valley, in particular, product marketing
professionals have considerable domain experience in a particular
market or technology or both. Some Silicon Valley firms have titles
such as Product Marketing Engineer, who tend to be promoted to
managers in due course.

The trend that is emerging in Silicon Valley is for companies to hire a

team of a product marketing manager with a technical marketing
manager. The Technical marketing role is becoming more valuable as
companies become more competitive and seek to reduce costs and
time to market. Another trend is to have one Product Marketing
Manager per group of Product Managers. This is the model that leads
to the issue of PMMs being pressured to write content instead of
connecting with the market.

Establishing a single price for all products in a product line, such as

having a price of $55 for the high-priced line of dress shirts, $45 for the
medium-priced line, and $35 for the lower-priced line. Product line
pricing factors in the impact of a product's price on demand for
another product offered by that marketer. For example, if McDonald's
offered a $12 sandwich, it would be far out of the price/value range
established by other sandwiches in McDonald's product line and
demand would be minimal. The price of a complementary product such
as software can directly impact demand for the hardware. The higher
the price of the software, the lower the demand for the hardware.
McDonald's could afford to offer a beverage at cost if the incremental
sandwich sales revenue gained as a result outweighed the lost
beverage revenue. The price of a product such as a compact car can
impact demand for another compact car model that would serve as a
substitute. The higher the price of one car, the greater the demand for
the other. Variations in manufacturing costs across products are also a
factor in product line pricing.

Marketing Requirements Document

(MRD)
This product release, code-named "Babylon-6," addresses three top
requirements. In order, they are [1] meeting the emerging market
need for teleportation, [2] boosting internal quality and supportability
through telepathic diagnostics, and [3] increasing networking price-
performance. All three are required for successful release and launch,
which is planned for next Wednesday.

In addition, a wide variety of other improvements and extensions have

been identified. None of these are defined as gating items for the
release, so may be postponed if they threaten timeliness or
functionality of the release.
How to Put Together a Marketing
requirements Document (MRD
A Marketing Requirements Document (MRD) outlines the requirements
a new product or update to an existing product must meet according
to market drivers. Product engineers use an MRD to create the
product. Product managers and product marketing managers put
together MRDs, but they are used throughout an organization.

A Marketing Requirements Document (MRD) outlines the requirements

a new product or update to an existing product must meet according
to market drivers. Product engineers use an MRD to create the
product. Product managers and product marketing managers put
together MRDs, but they are used throughout an organization.

Things You'll Need:

• Market data
• Customer feedback
• Competitive analysis

1. Step 1

Collect customer and industry feedback about existing products or

industry voids. In order to determine what the market requires, you
have to do market research. It's a product manager's job to pull
together all of the feedback on a product to determine how to make
it better.

2. Step 2

Put together a list of features to meet market requirements. Market

requirements are often vague requests that must be synthesized
into concrete solutions. You will likely need to discuss options for
features with your product engineer or engineering team to
determine what is and is not possible.

3. Step 3

Determine what you would like your new product release to

accomplish. New products or enhancements to products can attract
new markets, demonstrate innovation or improve customer
satisfaction. Having a goal in mind for a product release can help
streamline your list of features.
 4. Step 4

Create a concise document that outlines and prioritizes feature

requirements and includes market data, competitive analysis and
use cases. Different industries and companies have different norms
for MRDs, so take a look at a past MRD from your company as a
template.

5. Step 5

Post your MRD somewhere where everyone can have access to it. It
can be printed and distributed, posted to a file server or uploaded
to an internal website, for example.

6. Step 6

Update market data and competition analysis as necessary in the

MRD.

Strategy and Overview

1.1 Goals and Objectives
{A short, easily measured objective echoed from top page.}
This product release, code-named "Babylon-6," addresses three top requirements. In
order, they are [1] meeting the emerging market need for teleportation, [2] boosting
internal quality and supportability through telepathic diagnostics, and [3] increasing
networking price-performance. All three are required for successful release and launch,
which is planned for next Wednesday.

In addition, a wide variety of other improvements and extensions have been identified.
None of these are defined as gating items for the release, so may be postponed if they
threaten timeliness or functionality of the release.

1.2 Strategic Road Map

This project is part of the company's overall plan to penetrate financial and supply chain
accounts in, where early adopters for futuristic capabilities tend to collect. In addition, it
helps us in our core decision support base, which has been waiting for performance
improvements to move very large files among planetary systems. Non-Earth customers
are a secondary target for the company, and this product.

1.3 Customer Categories (User Profiles or Personas)

{Detailed description of target users and buyers. May require several sets of target
descriptions, with as much information about customer environments as can be found.
Are users road warriors with Palm Pilots, or help desk staff running system management
tools?}

Target customers are expected to fall into the following categories and usage profiles:
1.3.1 Current customer base, looking for performance upgrades and improved
diagnostics. Most are currently on support contracts, so do not generate incremental
revenue - but are our leading source of references and upgrades. Usage patterns should
be similar to current applications, with increasing use of new diagnostic features and on-
line downloading of financial indicators.

Most vocal current customer is HP printer logistics division, which needs to ability to
make urgent deliveries to remote customers at low cost. Babylon-6 should allow HP
Logistics to centralize printer supplies in Roseville CA and Bangalore, reducing real
estate costs and in-pipeline inventories elsewhere. See detailed use case attached…

1.3.2 Hi-Tech Mergers & Acquisitions users, who will be most interested in reducing
latency of financial updates and pricing. Moving price data through teleportation gives
program traders and hedge funds a way to "lead the market" by as much as 5 seconds.
For this group, raw transmission speed is the only criterion.

Figure A shows a schematic how our system will fit with pricing data from major
exchanges, (NYSE, NASDAQ as delivered through Reuters/TIBCO) and buy-side
interfaces with portfolio trading apps.

1.3.3 Plastics Manufacturers, who need dramatically better price-performance to reach

production economies. Our previous versions have required too much computing power
for this market. A 3.5x improvement in price-performance brings us into the right range
for the first time, and ahead of our competitors. In this segment, total system cost and
support for very large storage arrays will drive purchasing decisions.

Chart B shows current and future performance (in absolute and price-performance terms)
for this segment. If necessary, a market-specific lease option will be created to lower
upfront buy-in costs.
1.4 Competitive Strengths and Weaknesses
Our biggest competitor has failed to address key aspects of this market. They have
neglected new transport methods in favor of old-style fuel-based mobility. "Babylon-6"
will let us tilt the PR playing field in our favor ("old versus new") as well as sell upgrades
to older customers no longer on contract. In particular, we should be able to take share
away from BigCo based on their clumsy pricing and slow development cycles.
Since we will not yet have filled some holes in our own product line (especially safety
testing for transport of people and live cargo), we will de-emphasize this in our materials
and use cases. All marketing and advertising will picture transporting of physical (no-
living) goods. In addition, Corporate Marketing will provide delivery insurance to cover
any losses from mis-directed shipments.
1.5 External Positioning
{A pithy summary of what's new and different enough that press/analysts will listen}
At launch, we will position this with the broad non-technical press as…
and focus technical reviewers/readers on…
Our comparison with existing competitors will focus on…
For existing customers, our top-line message will be…
1.6 Microsoft
This is in potential competition with several long-term Microsoft initiatives, such as
"Penfield-Jackson" and "R2D2". Our plan must be either to [a] make this an attractive
partnering opportunity for Microsoft, with hopes for free bundling or acquisition, or [b]
position it as complementary to Microsoft's incomplete lower-level offering, which we
assume will be bundled at no charge in all of the following products and suites:
Office2006, MoonExplorer, and "USBeam".
Any discussion with press or analysts will include a designated PR / Product Marketing
representative to cover Microsoft questions.
2.0 Business Model
An explicit description of this product (service) and "how it makes money" is important
to careful planning . While the business model may change with competitive shifts or
learning during the development cycle, assumptions about marketplaces and pricing will
drive many decisions and define how we win against existing offerings.
2.1 Value Proposition
Clear description of the value created for users by the product/service, including reasons
why current offerings are insufficient.
Example: database stored procedures (a.k.a. triggers) allow program trading of securities
driven by real-time market price data. Pre-existing solutions required manual
intervention or batch price scans, which were too slow to catch real-time market moves.
This technology created a new class of traders able to arbitrage tiny market inefficiencies,
and made millions for early Wall Street adopters.
2.2 Market Segment
Who are the users (IT, line of business, roaming execs, home surfers…)? What are the
details of the application?
Example: a global Internet dial-up service is targeted at roaming business users with
Windows laptops who cross national boundaries. They dial in for email and corporate IP
applications (on average) twice per business day and infrequently on weekends. They are
non-technical, so cannot be counted on to configure any local settings or understand the
subtleties of local telephone services.
2.3 Value Chain Structure
How will this be distributed? What are necessary complementary products? What
prerequisites will customers require (and that can be used as marketing screens)?
Example: a real-time alerting system for corporate back-office applications requires
deployed, working corporate applications (e.g. ERP or finance) and browsers installed on
all end user systems. It is a complement to these large apps, adding value to triggering or
error status features, since end users often fail to see urgent alerts. As a stand-alone
offering, it lacks high-value content. Can Marketing create a simple targeting screen for
early location/qualification of prospects?
2.4 Cost Structure
Is this a service or a product? Are costs driven by one-time R&D or ongoing support and
provisioning? What is the profit potential given the customer proposition and value
chain?
Example: a transaction-based service has high fixed (start-up) costs and low per-
transaction costs. A 24*7*365 support team is expensive to maintain, but can manage a
large number of cases without expanding. Company needs to get a minimum revenue per
month (day, year) to cover support costs and amortize R&D, but needs relatively little per
additional transaction to generate profitability. Subscription model and per-transaction
fees are possible pricing solutions.

2.5 Position within the Value Network

How does the company link with suppliers and customers? Which are likely
complementors and competitors? Who would lead in a teamed sales model?
Example: Fault-tolerant systems platforms are required for 911 applications as well as
cash machine networks. In both cases, the customer requires a custom software solution,
which is chosen before the hardware/OS combination. The systems provider must team
with top vertical app developers and win their attention/loyalty versus alternate platform
providers. Natural channels are OEM through application vendors; VAR through system
integrators; in-house application development teams; investment or acquisition of leading
app providers.

2.6 Competitive Strategy

How will we gain advantage over competitors? What unique resources do they lack, or
conflicts have they created, that keep them from using the same strategy? Look for
specific "hard" items, rather than generic answers (e.g. focus, smarter team, reputation

The Preparation

The outline below shows you what information should be included on

the product planning slides for each product.

You need to prepare all the slides in advance of the meeting. You will
want to schedule some time with engineering to review the slides
before they are finalized. This is necessary for the following reasons:

• Engineering needs to provide resource estimates.

• Engineers may have great ideas on a particular implementation
of a product or even a good target market for the product.
• Engineers may have strong opinions on a given project. It is best
to understand those before trying to get the project approved.

For the meeting you will want to have the room set up in a round table
format to encourage discussion. Have copies of the slides and back-up
documentation for everyone involved. New products are controversial
and anything you can do to make the meeting run smoother is
important to the overall objective of the company working on projects
with the best return on investment.
Outline of Presentation

I recommend using only one or two slides per product. You can hand
out any back-up material. A simple standard format will allow anyone
to look back at the slides and recommendations without becoming lost.

Sample Presentation

Project Name- Come up with a name for the project that is easy to
identify, but don't spend a lot of time on it, this isn't the final product
name.

Product Description - Give a brief bulleted description of the product

and its positioning (why it is of value to the customers and why it is
better than anything else on the market).

Recommedation - Most people would want the recommendation last,

but I have worked with plenty of unruly groups who would get
sidetracked long before the product manger could talk about their
recommendation. So I put it as far up to the top as possible. If you are
working with a more civilized group of people, you can put it at the
end.

The recommendation should be one of three things: Add the project to

the approved projects list and fund it, reject the project (removing it if
it was on the list), or hold for further investigation. If a project is a fairly
new idea and you haven't had the opportunity to run it by your
customers, you may want to recommend that you spend some more
time on the market justification before it is approved. The only other
statement that may be made here is the recommendation to
discontinue a current product. If this is a recommendation then there
should also be a discussion of the replacement product.

Market Justification - Why should the company build this product?

Who needs it? How much will they buy? Include market size numbers
here and real sales projections. Just remember that the VP of Sales
isn't going to sign up to these preliminary numbers!

Resource Projection - This should be a rough estimate from

engineering on what it will take to build the product.

The Decision

Getting a decision from the meeting is crucial, even if the decision is

that more information is needed. The ultimate decision generally falls
into one of four categories:

Approved - If there is sufficient information to approve a product, then

it is added to the list of approved products and the next step, whether
it is writing a market requirements document, or writing a functional
specification, is started.

Canceled - If there is not sufficient justification for a product, or it does

not fit into the company strategy then it should be canceled and
removed from the list of approved projects (if it was there to begin
with).

Hold pending further investigation - No matter how much research

you do on a project, questions may come up that you don't have ready
answers for. Sometimes a decision will need to be delayed pending
further market research information or an investigation from
development. In any case, the additional information should be
gathered and the project should be discussed at the next product
planning meeting.

Hold for future - If the product fits into the company strategy, but the
resources are unavailable to work on it, it may be a good idea to put it
on hold until some determined future time.

The decision should take into account the following criteria:

• Does the project fit into the company's long term strategy?
 • Does the target market for the project align with the company
strategy?
• Will there be sufficient revenue from the product to justify the
work required?
• If there is not sufficient revenue, are there other highly
compelling reasons to justify the work?
• Are the resources available to do the work?
• If the resources are not available, should this project take
precedence over another?

The person who ultimately makes the decision should be determined in

advance of the meeting. This is generally the CEO, President, or CTO of
the company. The forum should allow adequate discussion before the
decision is reached.

References

1. ^ [Start Market Course, George Fontanills, Tom Gentile, John

Wiley and Sons Inc. 2001, p91http://books.google.com/books?
id=gtrLvlojNzIC&pg=PA91&dq=stock+market+trends#v=onepa
ge&q=stock%20market%20trends&f=false]
2. ^ [Technical Analysis of Stock Trends, R.Edwards, J. McGee, WHC
Bessetti, CRC Press, 2007, p17 http://books.google.com/books?
id=wklriRw9a1oC&pg=PA17&dq=stock+market+trends#v=one
page&q=stock%20market%20trends&f=false]
3. ^ [Technical Analysis of Stock Trends, R.Edwards, J. McGee, WHC
Bessetti, CRC Press, 2007, p18 http://books.google.com/books?
id=wklriRw9a1oC&pg=PA17&dq=stock+market+trends#v=one
page&q=stock%20market%20trends&f=false]
4. ^ Chart of gold 1968–99
5. ^ O'Sullivan, Arthur; Steven M. Sheffrin (2003). Economics:
Principles in Action. Pearson Prentice Hall. p. 290. ISBN 0-13-
063085-3.
6. ^ "Staying calm during a bear market". Vanguard Group.
7. ^ http://www.fool.com/investing/small-cap/2007/05/02/buy-
when-theres-blood-in-the-streets.aspx Buy When There's Blood in
the Streets
8. ^ http://stockcharts.com/h-sc/ui?s=$INDU&p=D&st=1987-08-
01&en=1987-12-31&id=p95907824619 stockcharts.com chart
9. ^ http://stockcharts.com/h-sc/ui?s=$INDU&p=D&st=2000-01-
01&en=2002-12-31&id=p94927308656 stockcharts.com chart
 10. ^ http://stockcharts.com/h-sc/ui?s=$INDU&p=D&st=2007-06-
01&en=2008-12-31&id=p30570128154 stockcharts.com chart
11. ^ Technical Analysis of Stock Trends, Robert D. Edwards and
John Magee p. 479
12. ^ Trying to Plumb a Bottom, By MARK HULBERT,
http://online.barrons.com/article/SB122652105098621685.html
13. ^ http://online.wsj.com/article/SB121685817512279283.html?
mod=rss_whats_news_us_business Ellison's New Position: Cash
Hoard, by Diya Gullapalli, "I don't want to lose any more ..."
14. ^ Harper, Douglas. "bull". Online Etymology Dictionary.
http://www.etymonline.com/index.php?term=bull.
15. ^ "The Speed Of Grizzly Bears" William E. Kearns, Assistant Park
Naturalist
16. ^ Efficient Markets or Herd Mentality? The Future of Economic
Forecasting on news.morningstar.com
17. ^
http://www.investopedia.com/terms/e/efficientmarkethypothesis.
asp
18. ^ [Technical Analysis of Stock Trends, R.Edwards, J. McGee, WHC
Bessetti, CRC Press, 2007, p 17 http://books.google.com/books?
id=wklriRw9a1oC&pg=PA17&dq=stock+market+trends#v=one
page&q=stock%20market%20trends&f=false

http://www.followtopia.com/?query=Produc