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PRODUCT

MANAGEMENT
By
Dr. G. Ramesh Ph.D.
16/1/2015

St Francis Institute of Management and Research,


Borivali(W), Mumbai

Two faces of product management


Convert the value proposition
into a market offering
Inbound
Product Development

Capabilities of
the Company

Voice of
The Customer
Outbound
Product Marketing

16/1/2015

Take the offering and the


value
message
to market
St Francis
Institute
of Management
and Research,
Borivali(W), Mumbai

Inbound Responsibilities
Understanding customer needs and Understanding the
market and competition for the product.
Researching feature enhancements and upgrades for future
releases.
Creating Marketing Requirements Document (MRD) and
product release plan.
Helping to develop product roadmap and competitive
positioning
Working with development, testing, and QA to ensure that
product meets requirements and stays within schedule
16/1/2015

St Francis Institute of Management and Research,


Borivali(W), Mumbai

Outbound Responsibilities
Managing product launch
Supporting marketing with outbound marketing
communication and PR
Supporting sales with product training, demos, customer
presentations, data sheets, competitive positioning
Supporting sales on key customer deals and accompany
sales personnel on key customer visits
Monitoring and improving customer satisfaction
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St Francis Institute of Management and Research,


Borivali(W), Mumbai

Product Management
Function
A Product forms the most tangible expression of the
offering of a business endeavour.
Planning the Product line &Product Mix
Management of New Products
Product Positioning
Strategic Product Management

16/1/2015

St Francis Institute of Management and Research,


Borivali(W), Mumbai

Product Management Task

Establishing Marketing Objectives for the product


Spotting marketing opportunities and check are they
exploitable.
Planning the Marketing Activities to achieve Product
objectives
Determine expense budget, totally and for each
marketing activity
Scheduling theSt Marketing
activities
Francis Institute of Management
and Research,

16/1/2015

Borivali(W), Mumbai

Communicating plan to assure understanding


by those who will implement
Monitoring progress & effectiveness of
performance according to standards
Specifying corrective action when plan &
performance are at variance.
Establishing measurements and control
review procedures.
16/1/2015

St Francis Institute of Management and Research,


Borivali(W), Mumbai

Product Managements Role in Decision


Making
Product
Packing
Pricing
Advertising
Media
Marketing Research
Promotions
Sales force
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St Francis Institute of Management and Research,


Borivali(W), Mumbai

Product Management Decisions


Product Mix Decisions
Product Modification/Modernisation Decisions
Product line Pruning Decision
New Product/Diversification Decision
Branding and Packaging Decision

16/1/2015

St Francis Institute of Management and Research,


Borivali(W), Mumbai

An Integrated Approach(Matrix
Approach) to Product Planning
Phase A : This requires definition of the relevant
universe in terms of the relevant strategic
product/Market area.
Phase B : This entails examination of the sales
position for the given product in the strategic market
area.
Phase C : The market share of the companys given
product in the strategic product market area is
determined using certain criteria to assign into
categories.
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St Francis Institute of Management and Research,


Borivali(W), Mumbai

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ILLUSTRATION
Sales Industry
Company
1) Decline _______
_______
2) Stable _______
_______
3) Growth _______
_______
Market Share
4) Marginal Market position________________
5) Average Market position________________
6) Leading Market position________________
Profitability
7) Below Target_____________________________
8) About Target_____________________________
9) Above Target_____________________________
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St Francis Institute of Management and Research,


Borivali(W), Mumbai

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16/1/2015

St Francis Institute of Management and Research,


Borivali(W), Mumbai

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Interpretation
Product A showed a marginal market share in a growth industry had stable
but below target profitability in the first year.
This improved to growing profits and average market share in the next year to
achieve targets.
This was followed by an above target profits coupled with an average market
share in a growing industry.
Product A has increased steadily.

16/1/2015

St Francis Institute of Management and Research,


Borivali(W), Mumbai

13

Product B on the other hand is in a declining industry


with an average market share and stable profits on target
in the first year but in the next year a decline in profitability
is seen .
In the third year the decline in profits continues with a drop
in the market share as well.

16/1/2015

St Francis Institute of Management and Research,


Borivali(W), Mumbai

14

Suggested Marketing Strategy


For Product A : To move from Av Market share
to the Dominant position maintaining above
Target profits.
For Product B : To Improve market share
position from Marginal to Av and also achieve
stability in sales although the profit may be
below target.

16/1/2015

St Francis Institute of Management and Research,


Borivali(W), Mumbai

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Example Auto Industry


Sales of passenger vehicles in the domestic market
increased by three per cent to 207,953 units from
201,896 units in May 2014.
Maruti Suzukis sales rose 16.37 per cent to 90,560
units
Hyundai Motor increased 12.78 per cent to 36,205
units.
Tata Motors fell 29.54 per cent to 12,103 units
M&M decreased 21.36 per cent to 19,470 units.
Source : SIAM report and BS dated 16 Jul 2014

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Borivali(W), Mumbai

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Borivali(W), Mumbai

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Inferences

A Firms major strategic product/market decision


alternatives for its existing product line and the
component products of that time in a given strategic
product market area are
(a) Not to change the product and its marketing
strategies
(b)Not to change the product but the marketing
strategies which may involve a change in the advt,
distribution and pricing strategies associated with a
given
positioning and given product attributes.
(c) Change the Product
(d)Discontinue the Product or the Product line.
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(e) Introduce New


Products
into the
or add new
St Francis
Institute of Management
and line
Research,
Borivali(W), Mumbai
product lines.

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St Francis Institute of Management and Research,


Borivali(W), Mumbai

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A Model on Product Planning on a New Product


Introduction
This model is based on rating the product on certain factors and sub
factors.
The Major factors in this model are
(a)
(b)
(c)
(d)

Marketability
Durability
Productive ability
Growth potential

These factors are assigned weights in accordance with their relative


importance.
Each Factor has further Sub factors which are also weighted.
In Evaluating the sub factors of the factor Marketability, each of the factor
ratings are assigned an estimated probability which essentially evaluates
the chances of whether a factor will achieve the rating awarded to it.
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St Francis Institute of Management and Research,


Borivali(W), Mumbai

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Factor Rating of a Product X


Product Factor

Factor Weight

Assigned Factor Final Factor


value
Evaluation

Marketability

0.4

71.4

28.6

Durability

0.3

68.6

20.6

Productive
ability

0.1

91.6

9.2

Growth potential 0.2

69.2

13.8

Final Factor
index number
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1.0

St Francis Institute of Management and Research,


Borivali(W), Mumbai

72.2

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Legend
Columns
1-Sub factor
2-Sub factor weight
3-Very Good
4- Good
5- Average
6- Poor
7- Very Poor
8- Total

Rows
MA-Relative to present distribution
channels
MB- Relative to present product lines
MC- Quality/Price relationship
MD- Number of sales and grades
ME- Merchandisability
MF- Parts on sale of present products

9- Sub factor Evaluation


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St Francis Institute of Management and Research,


Borivali(W), Mumbai

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An Illustration on one Factor w.r.t the


Product X
Sub
Fact
or

Sub
Fact
or
Wei
ght

Ver
y
Go
od

EV(10
)

Good

EV(8)

Av

EV(6)

Poor

EV(4)

Very
Poor

EV(2)

Total

9(Col
2xcol
8)

MA

1.0

0.1

1.0

0.2

1.6

0.5

3.0

0.2

0.8

6.4

6.4

MB

1.0

0.1

1.0

0.2

1.6

0.4

2.4

0.2

0.8

0.1

0.2

6.0

6.0

MC

3.0

0.3

3.0

0.4

3.2

0.2

1.2

0.1

0.4

7.5

23.4

MD

1.0

0.1

1.0

0.2

1.6

0.5

3.0

0.2

0.8

6.4

6.4

ME

2.0

0.5

5.0

0.4

3.2

0.1

0.6

8.8

17.6

MF

2.0

0.2

1.6

0.5

3.0

0.3

1.2

5.8

11.6

10.0
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71.4
St Francis Institute of Management and Research,
Borivali(W), Mumbai

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Product Life Cycle An Aid to Product


Planning
The PLC curve passes through Four
discernible stages.
Log

Phase (Introduction)

Exponential Phase (Growth)


Stationary Phase (Maturity & saturation)
Decline

16/1/2015

Phase

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Borivali(W), Mumbai

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St Francis Institute of Management and Research,


Borivali(W), Mumbai

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Varied Marketing Objectives at different stages of PLC


Sl.no

Stages

Intro

Growth

Maturity

Decline

01

Marketing Objectives

Inculcate Product
Awareness

Maximize Market
share

Maintain Market
share, maximise
profits

Reduce expenditure

02

Product

Sales

Low

Rapidly Increasing

Sales at Peak

Declining

Costs

High/customer

Average customer

Low/customer

Low/customer

Profits

negative

rising

high

Declining

Customers

innovators

Early adopters

Late adopters

Laggards

Competition

Nil or few

Rising number

Number
stabilising them
declining

Declining

Product

Offer basic
product

Offer product
extensions

Diversify
brands, models

Eliminate weak
products

Price

Cost plus pricing

Penetration pricing

Price to meet or
beat
competition

Reduce prices

Distribution

Start
withselective
distribution

Build distribution

Strengthen
intensity of
distribution

Eliminate unprofitable
outlets, become
more selective than
growth phase

Promotion

Advertise to build
awareness
among early
adopters and use
heavy sales
promotion to
promote trial

Build selective
demand by
highlighting
differentiation
.step up sales
promotion to
promote from
competitors 26

Reduce advertising to
the level needed to
maintain loyal buyers
reduce sales
promotion to minimal
level.

03

16/1/2015

Marketing Strategies

St Francis Institute of
Borivali(W), Mumbai

Advertise to
sustain awareness
and interest in the
mass market and
go easy on sales
promotion to
Managementexploit
and heavy
Research,
consumers
demand

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St Francis Institute of Management and Research,


Borivali(W), Mumbai

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PLC as Planning, Control & Forecast


Tool
Planning
Products do not follow a Natural and inevitable cycle of birth, growth and death
as organisms do. Also as the Life Cycle stages do not have predictable duration
and inevitable sequence, the PLC concept can be used as a general guideline
for planning future action. As a Planning tool, it emphasizes the type of main
Marketing challenges a product is likely to face in different phases, and suggests
major alternative strategies that may be followed at each stage

Control
As a Control tool, it enables comparison of product performance against similar
products in the past.

Forecast
As a Forecast tool, it has limited utility as sales histories of products differ widely
and the life cycle stages exhibit varying duration.

16/1/2015

St Francis Institute of Management and Research,


Borivali(W), Mumbai

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