Prafulla Kumar Das

Objectives After learning this unit, the learner shall be able to:  Discuss the nature and scope of product management  Explain what it is meant by product portfolio  Explain the process of developing an optimum product-mix using product portfolio approach  Differentiate between types of product management system  Develop a suitable product management system for an organization

maintaining and presenting the optimum bundle of need satisfiers an organization is capable of offering. Product also represents the means through which the organization seeks to satisfy consumer needs and generate consumer satisfaction. We discuss here how PBM systems are organized. Product policy and strategy-key determinant for marketing strategy. . Product management decision.all decisions incidental to creating.    Product forms the most tangible expression of a business endeavor.

competition. continuing. For better economic health-to promote products with high ROI. and technological changes. New products as per trend in customer patronage.     The success of an organization. So planning the product mix is the basic function: Introducing. To eliminate absolutely unprofitable product . and dropping a product. to promote high ROI products.keeping winners in the product range. Some low margin and no margin products for public interest.

    Achieving desired product mix is not enough. Wide scope of product management is handled looking to: size of the company. Proper positioning. . Product management to be in the look out of new pastures including to an untried area for diversification. individuality different from competition. uniqueness of benefits are important. Consumer perceptions are studied to position the product as per the study. joint responsibility of the group being headed by a senior. more people for more work.

Management task Has sole responsibili ty to see the completed Plays a major role to see the task completed Plays a minor role to see the task completed Establishing marketing objectives for the product Planning marketing activities Expense budget.totally and for each activity Establishing measurement and control review procedure Communicating plan to assure understanding of implementers Monitoring progress as per the standard Specifying corrective actions in case of End of the year report to management variance Postmortem plan revaluation for earning purpose .

Marketing decision areas Sole decision maker Major participant Minor participant Opinion sometimes asked Plays no role in decision making Product Packaging Pricing Advertising theme/copy Adverting media Marketing research Types or no. of promotion Timing of promo Instruction to sales force Instruction to agents .

channel used. and consistency of the product line. Optimality of the product-mix ( profitability. market served. technology employed. marketability. . market share. depth. long-term prospects). Decision about the width.   Product-mix decisions: Total product and a group of products within the product mix to consider: customer needs. One important approach is portfolio approach. length.

 - Product modification/ modernization decisions: Product line and length may be adequate but might not be relevant being reflected by product returns. Whether to go product by product or to go for complete overhaul but to study consumer and competitor reaction .

Innovation for competitive advantage. marketing. price reduction.Marketing needs. internal development and acquisition are important sources  . production and financial considerations. company’s resources and competences. . . expiry etc)  New product decision/ diversification decision: Most common product policy problem is addition of new product to the existing product line.Product line pruning/elimination decision: Products should not be allowed to continue for executive attachment for those consume resources (varying inventory level.

family brand.Branding and packaging decision: Branding.Marketing and cost considerations dictate terms Packaging-designing and producing container or wrapper. Can play major or minor role looking to product nature and market requirements. So. Let us examine those one by one starting from Product mix decisions. distributor brands etc .one of the ways for distinctiveness. inculcating product image and helps adoption. product concept. mind share. design and package testing.  . repeat purchase. . distinctive brand.Whether to use manufacturer brand.

 Each product is classified by rate of present or forecasted market growth and is a measure of market share dominance.. For R&D market share growth strategies illustrate the implications. Stars High Cash generated ++ Cash use ………………………………….0x Dog Cash generated + Cash use ------------------------------Net 0 Low . When the share and growth of each product are jointly considered. the new basis for strategy evaluation emerges..- Cash cows Low Cash generated + + + Cash use -----------------------Net ++ High 1. Net O2Problem child Cash generated + Cash use --------------------------Net .

 - Low growth/ Dominant market share (Cash cows): Profitable. research activities and investment in growth areas .generate more cash than required to maintain market share All strategies to maintain market dominance including investment in technology leadership Pricing for cost leadership Excess cash support.

High growth/Dominant market share (Stars): Market leaders with high growth.New users and new applications  .Strategy to protect market share and investment in ways for price reduction . High cash generation as well as high investment for fueling growth.Product improvement and wider coverage . .

and in matured market Few opportunities to grow at a reasonable cost All competitors fight for small market share Strategy: Specialized segments to focus which can be dominated Harvesting to keep the outgo to a minimum level to a foreseeable timeline. Abandoned deletion from the product-line. - - Low growth/subordinate share (Dogs): Not market leaders. minor market share. .

Strategy: Either to invest heavily to get a disproportionate market share of new sales or to buy existing shares by acquiring competitors to move the product to star category .Or to get out of business using aforesaid alternatives  .High growth/subordinate market share (Problem child): A combination of rapid growth and poor margin creates a demand for cash.

Divest products with low growth.Continue present strategies for product B and C to ensure maintenance of market share .Gain market share for products by investing in acquisition . .Aggressively support the newly introduced product to ensure dominance .Narrow the range of models of product to focus on one segment.The long run health of the firm depends on having some products: a) those generate cash b) others those use up cash to generate growth The overall strategy suggested by the matrix would be: . low market share products less than 1% market share  .

legal. governmental and union preserves and opportunities . service level etc Extent of captive business Nature of technology (maturity. promotion activities. - - There may be number of factors beyond market share and market growth those have bearing on business: Contribution rate Barrier to entry Cyclicality of sale The rate of capacity utilization Sensitivity of sales to change price. complexity) Availability of production and process opportunities Social. volatility.

So product management satisfies the diversified needs.   - Product is central to survival but rapid fall in the product life cycle Review product mix to find growth opportunities to meet objectives of the firm Proliferation of brand as well as use of specialists to manage those. The roles of product manager are three: The little general manager or entrepreneur Coordinator of activities done by others Assistant to the real product managers-Top management .

 Management task: described earlier in the table Marketing decision: Described in the second table Budget and marketing plans: Has a definite say in the annual marketing budget as responsible for day-to-day implementation   - .

     Most applicable for a multi-product company Products to be neither insignificant nor very big that could spell havoc to the company Companies with one or two major products find product management very useful Depends upon number of management levels involved in decision making Not useful when lengthy communication channels are involved. .

Changes in the number and types of elements employed in the marketing mix  Changes in the number of product managers employed within the same organizational unit  Changes in the resources or support services required for the marketing elements located internally and externally If we consider those separately .

  With the change of marketing-mix elements. the skill set would be different for product managers. the people available to handle those would be same. When the company expands. product manager’s job also changes. Preference of better margin or combination strategy to advertising. . Product managers being less technically qualified should concentrate on market research or strategic areas.

In case he uses internal resources. . the influence of other product managers would come to force as well. Product manager’s job changes with the change in the stages of product lifecycle. Very versatile and subject to changes with the growth in size of the organization or changes in the environment.   Product manager’s role is also shaped by the support groups controlled by him.

Thank you .

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