PRODUCT MANAGEMENT

7/9/2022 Dr. Aditya Mishra 1

7/9/2022 2
 Role and Scope of Product Manager
Role of Product Manger
Responsible for marketing of individual products or product lines
• Creation and conceptualization of strategies for improving and marketing
the assigned product line or brands.
• Projection and determination of financial and operating plans for such
products.
• Monitoring execution and results of plans, with possible adaptation of
tactics to evolving conditions.

Scope of Product Manager:

• Has no control over the functional departments that execute the plan
• Lately, advertising function at micro level is being held by product
managers

7/9/2022 Dr. Aditya Mishra 3

 How is Product Manger different from
Marketing Manger?
• Focus
• Level of Operation
• Time frame of decision making
• Tactical vs. strategic decisions

How is Product Management different from

Brand Management?
Differences
• Brand can exist independent of product
• Brand has value on balance sheet
• Brand can deal with multiple product lines but still be coherent
• Brand is extendable
• Brand is a promise of performance

Similarities
• Brand derives its power from product only
• If promise is not delivered through the products, it tarnishes the brand (image / equity)

7/9/2022 Dr. Aditya Mishra 4

 Critical Skills

Recommended Books

• Negotiation (How I Raised Myself from Failure to .

Success in Selling, . How to Negotiate
Anything)

• Team Work (How to Win friends and Influence People, .

Six thinking hats)

• Communication (Word Power Made Easy,

Better English)

• Analytical Ability (Art of War / Artha-shastra)

7/9/2022 Dr. Aditya Mishra 5

7/9/2022 Dr. Aditya Mishra 6
7/9/2022 Dr. Aditya Mishra 7
 Interfaces of a Product Manager

7/9/2022 Dr. Aditya Mishra 8

 What is a product?

7/9/2022 Dr. Aditya Mishra 9

7/9/2022 Dr. Aditya Mishra 10
 Goods Vs. Services
• Intangibility
• Perishability and fluctuating demand
• Inseparability

7/9/2022 Dr. Aditya Mishra 11

 Product classifications

based on complexity and efforts

consumer puts in buying

7/9/2022 Dr. Aditya Mishra 12

7/9/2022 Dr. Aditya Mishra 13
 Levels of Competition: Implications
for Product Strategy
Competitive Level Product Management Task
Product Convince Customers that the
Form Brand is Better than Others

Product Convince Customers that the

Product Form is Best in the
Category Category

Convince Customers that the

Generic Product Category is the Best
Way to Satisfy Needs

Convince Customers that the

Budget Generic Benefits are the Most
Appropriate Way to Spend
their Money

7/9/2022 Dr. Aditya Mishra 14

 Attractiveness of Market Variables

7/9/2022 Dr. Aditya Mishra 15

 Category Attractiveness
over the Product Life Cycle
Sales

Stage of Introduction Growth Maturity Decline Time

product
life cycle
Category Small Moderate Large Moderate
size
Category Low High Low Negative
growth

Category Low High Low/high Low

attractiveness
7/9/2022 Dr. Aditya Mishra 16
 Category Factors

• Threat of new entrants

• Bargaining power of buyers
• Bargaining power of suppliers
• Current category rivalry
• Pressure from substitutes
• Category capacity

7/9/2022 Dr. Aditya Mishra 17

 Environmental Factors

• Technological
• Political
• Economic
• Regulatory
• Social

7/9/2022 Dr. Aditya Mishra 18

 Important Strategies
1. Cost Leadership
2. Differentiation
3. Focus/Niche Strategy

7/9/2022 Dr. Aditya Mishra 19

 TASK

After, picking a brand in any product category…

1. Explain various product levels

2. Briefly do the 5C analysis

7/9/2022 Dr. Aditya Mishra 20

 New Product Development

7/9/2022 Dr. Aditya Mishra 21

 Why do we need a new product?

• To be in business for a long time

• To satisfy unfulfilled needs of the customer
• Too much competition in the existing product line
• The profit margin is on decline
• Existing product line becomes saturated and the sale is on decline

7/9/2022 Dr. Aditya Mishra 22

 Some Facts about NPD

• Fast changing business environment

• Tough competition for survival
• Life-cycles of new products have become shorter
• Innovations are expensive and risky
• Very high failure rates
• Only 10-13% of the new product innovations are ‘New-To-World’
• In present times it takes a minimum of 7-10 new product ideas to produce
one successful product

7/9/2022 Dr. Aditya Mishra 23

7/9/2022 Dr. Aditya Mishra 24
 New Product!!

• Incremental improvements of existing product (viz. Samsung Refrigerator with automatic

sparkling water dispenser)

• Low-cost Product
• Re-positioned Product (viz.Tata Indica Vista)
• Expansion of existing product line (viz. Diet Coke, Coke zero, Caffeine-free Coke Zero)
• New product to firm, but not to world
• New-to-the-world product/Radical innovation

7/9/2022 Dr. Aditya Mishra 25

7/9/2022 26
7/9/2022 Dr. Aditya Mishra 27
7/9/2022 Dr. Aditya Mishra 28
7/9/2022 Dr. Aditya Mishra 29
 New Product Development Models
• Models consist of
– Stages of activities
– Review points
– Gates

• New Product Strategy/Product Innovation Charter/Protocol

• NPD process (Booz, Allen and Hamilton, 1982; Cooper, 1993)

– Idea generation
– Screening and evaluation
– Concept development and testing
– Business analysis
– Prototype development and testing
– Test Marketing
– Commercialization or Launch
– Review of Performance

7/9/2022 Dr. Aditya Mishra 30

7/9/2022 Dr. Aditya Mishra 31
7/9/2022 Dr. Aditya Mishra 32
7/9/2022 Dr. Aditya Mishra 33
 Stages of New Product development

• Strategy/PIC/Protocol
– To set goals regarding NPD
– Resource allocation

• Idea Generation
– Ideas within firm’s new product strategy
– Sources may be internal and external

• Idea Screening
– Initial/rough assessment of demand for the ideas generated
– Initial assessment of company’s capabilities to manufacture
– The objective of reducing cost of idea screening is based on
• The Idea Mortality Curve
• The Cumulative Expenditures Curve

7/9/2022 Dr. Aditya Mishra 34

7/9/2022 Dr. Aditya Mishra 35
7/9/2022 Dr. Aditya Mishra 36
 idea mortality curve

cummulative expenditure curve

u try to kill maxm ideas before business analysis step

7/9/2022 37
7/9/2022 Dr. Aditya Mishra 38
7/9/2022 Dr. Aditya Mishra 39
 Stages of New Product development
• Concept Development and Testing
– Content and form of an idea
– Assessment of the market demand and company’s capabilities regarding the
form; market-profiling; use of VR tools
– Direct customer research (To profile the market; to assess likely purchase
intention and position the product; To make improvements)

• Business Analysis
– Major ‘go-no go’ decision
– The complete analysis based on all the information available
– Expenditure increases heavily after this stage
– Market analysis (potential total maket, market share in a specified time duration,
competing products, likely price, break-even volume, identification of early
adopters, and specific market segments), operational cost analysis (, project
evaluation, Cannibalization etc. are being evaluated
– Sources of information: internal and external
– Outcome : Development plan with budget, initial marketing plan
– NewProd, SPRINTER, ASSESOR; BASES Test (Nielsen); A-T-R Approach,
DCF, Sensitivity Analysis etc. are tools

7/9/2022 Dr. Aditya Mishra 40

7/9/2022 Dr. Aditya Mishra 41
7/9/2022 Dr. Aditya Mishra 42
 Stages of New Product development
• Product Development and Testing
– Prototypes are made
– First assessment of functional performance
– First physical step in manufacturing chain
– Testing among potential customers
– ‘Beta Testing’

• Test marketing
– Small-scale tests
– To test other marketing-mix elements and competitors’ response
– Computer-based market simulation models
– Test marketing is not always feasible or desirable

• Commercialization or Launch
– Important decisions: when to launch product, where to launch product, how
and to whom to launch product
– Very high cost is involved
– More focus on innovators/early adopters
7/9/2022 Dr. Aditya Mishra 43
7/9/2022 Dr. Aditya Mishra 44
7/9/2022 45
7/9/2022 46
7/9/2022 Dr. Aditya Mishra 47
 Reasons for failure of new products

• Overestimating of market size

• Actual product may be poorly designed
• Incorrectly positioned
• Launched at the wrong time
• Priced too high
• Poorly promoted/advertised
• Inaccurate marketing research
• Higher costs of product development
• Competitors fight back

7/9/2022 Dr. Aditya Mishra 48

 Five characteristics of successful new product

• Better perceived product quality

– meeting consumer needs
– solve a problem
– highly visible benefits
• Cross-functional cooperation
• Product cost
– good value for the money
• Development time
• Development cost
• Development capability

7/9/2022 Dr. Aditya Mishra 49

 Approaches promoting cross-functional integration

• The Multiple Convergent Approach

• Quality Function Deployment (QFD)

7/9/2022 Dr. Aditya Mishra 50

 The early stages of the multiple convergent process
Research and development Suppliers Marketing Customers Manufacturing

Competitor analysis Market Specific demands

R&D projects (ongoing) Changes to product lines Process improvement projects
trend forecasts etc. Potential improvements

Convergent point:
IDEA GENERATION

Feasibility studies Estimations of market potential

Specifications of potentially Modifications to ideas Study of required alterations
Time projection(s) Initial Comparison with Competitors
required changes etc. Preference inputs Study of resource implications
specifications Initial financial assessment

Convergent point:
IDEA(S) EVALUATION

Fuller market assessment

Early design(s) Development work on Concept(s) introduced to Collaboration on concepts Evaluation of the implications
Concept developed technically changes/new products market for evaluation may be both technical and of the alternative concepts in
Cost of concepts required Positioning of concept(s) commercial terms of resources and costs
Price indications

Convergent point:
CONCEPT EVALUATION
and CHOICE

Convergent point:
FULL BUSINESS ANALYSIS

Development of altered parts,
Physical product development
etc., if required
Functional performance of
Preparation of marketing and Modifications to production
product, collaboration on the
launch plan process in light of development
development
7/9/2022 Dr. Aditya Mishra 53
7/9/2022 Dr. Aditya Mishra 54
 TASK

• Pick a successful launch and a failed launch in your category, and describe the reasons
behind success and failure.

• Successful Product Launches

– Nokia 1100
– Kinley packaged drinking water
– ITC Aashirwaad Flour
– Maruti Swift
– Patanjali Dant Kanti

• Failed Product Launches

– Maggi pickles
– Vanilla Coke
– Slice Fruits
– Godrej Powerwash
– Tanishq 18 carat jewellery
– Tata Nano

7/9/2022 Dr. Aditya Mishra 55

 Home Work

• Pick a product launch from your category, and describe the various stages
involved. Is there any deviation in the stages, we discussed?

7/9/2022 Dr. Aditya Mishra 56

 The Adoption and Diffusion of New
Products

7/9/2022 Dr. Aditya Mishra 57

 Innovation is
Communicated through certain channels
Over a period of time
Among the members of social system

7/9/2022 Dr. Aditya Mishra 58

 Influences on the decision process
• Rogers (1983) Framework (characteristics of a new product)
– Relative Advantage
– Compatibility
– Complexity
– Divisibility/Trailbility
– Communicability

• Resistances
– Technological
– Infrastructural
– Behavioral
7/9/2022 Dr. Aditya Mishra 59
7/9/2022 Dr. Aditya Mishra 60
7/9/2022 Dr. Aditya Mishra 61
7/9/2022 Dr. Aditya Mishra 62
 Rogers (1962) adopter categories

7/9/2022 Dr. Aditya Mishra 63

 Rogers (1962) adopter categories

7/9/2022 Dr. Aditya Mishra 64

7/9/2022 Dr. Aditya Mishra 65
7/9/2022 Dr. Aditya Mishra 66
7/9/2022 Dr. Aditya Mishra 67
 A successful launch strategy depends heavily
upon the firm’s ability to target those customers
for whom the product will be perceived as
offering the greatest advantage.
Innovators fall into three broad categories:
1. People who get added value from being first.
2. People who have a very strong need for the product
and are actively seeking a solution to a need.
3. People who can afford to experiment.

7/9/2022 Dr. Aditya Mishra 68

 Radically new products may appeal to several different
market segments. The marketing decision is which to
approach first, i.e. which is likely to be most receptive.

This segment must be targeted and a decision made

on how to position the product within the segment.

Positioning is achieved through the selection of the

marketing mix, and especially the communication
strategy.

7/9/2022 Dr. Aditya Mishra 69

 The Bass Diffusion Model

Model designed to answer the question:

When will customers adopt a new

product or technology?

7/9/2022 Dr. Aditya Mishra 70

 The Bass Diffusion Model
• There is a pool of M potential adopters
• Some of them adopt the new product on their own
(innovators) with probability p
• Others are imitators, and their adoption probability
depends on
– the imitation rate q multiplied by
– how many people already use the product N.

• ‘p’ is the coefficient of innovation and ‘q’ is the

coefficient of imitation

7/9/2022 Dr. Aditya Mishra 71

7/9/2022 Dr. Aditya Mishra 72
 Assumptions of the Basic Bass Model

• Diffusion process is binary (consumer either adopts, or waits to adopt)

• Constant maximum potential number of buyers (M)

• Eventually, all M will buy the product

• No repeat purchase, or replacement purchase

• The impact of the word-of-mouth is independent of adoption time

• Innovation is considered independent of substitutes

• The marketing strategies supporting the innovation are not explicitly

included

7/9/2022 Dr. Aditya Mishra 73

 Sales Growth Model for Durables
(The Bass Diffusion Model)

nt = p  Remaining + q  Adopters 
Potential Remaining Potential

Innovation Imitation
Effect Effect

where:
nt = number of potential buyers at time t
p = “coefficient of innovation”
q = “coefficient of imitation”
# Adopters Nt = n0 + n1 + • • • + nt–1
Remaining = Total Potential – # Adopters
Potential

7/9/2022 Dr. Aditya Mishra 74

7/9/2022 Dr. Aditya Mishra 75
7/9/2022 Dr. Aditya Mishra 76
7/9/2022 Dr. Aditya Mishra 77
7/9/2022 Dr. Aditya Mishra 78
7/9/2022 Dr. Aditya Mishra 79
7/9/2022 Dr. Aditya Mishra 80
 TASK

• Pick the most recent launch in your category and evaluate that based on the five
characteristics of innovation.

7/9/2022 Dr. Aditya Mishra 81

 Product Life Cycle

7/9/2022 Dr. Aditya Mishra 82

 The product life cycle (PLC) is

‘A generalized model of the sales trend for a

product class or category over a period of time,
and of related changes in competitive behaviour’.
(Buzzell, 1966)

7/9/2022 Dr. Aditya Mishra 83

 The product life cycle

Growth:
Quantity offer
product
extension, Maturity:
service, diversify
warranty brands/models Decline:
Introduction: phase out
offer basic weak
product products
0
Time

7/9/2022 Dr. Aditya Mishra 84

 The stretched product life cycle
contains seven stages:

• Gestation or new product development.

• Launch or introduction.
• Growth
• Maturity
• Saturation
• Decline
• Elimination

7/9/2022 Dr. Aditya Mishra 85

 Graphically we may represent
this as follows

Maturity Saturation
Quantity
Decline

Growth
Gestation Elimination
Launch

Time

7/9/2022 Dr. Aditya Mishra 86

7/9/2022 Dr. Aditya Mishra 87
 Common PLC Patterns:
Growth-Slump-Maturity (viz. Small Kitchen
Appliances)

7/9/2022 Dr. Aditya Mishra 88

 Common PLC Patterns:
Cycle-Recycle (viz. New OTC drugs)

7/9/2022 Dr. Aditya Mishra 89

 Common PLC Patterns:
Scalloped (viz. Nylon with discovery of different uses)

7/9/2022 Dr. Aditya Mishra 90

 Style, Fashion, and Fad Life Cycles

7/9/2022 Dr. Aditya Mishra 91

92