Product Management

Session 3
Wednesday June 15 2016

Evolution of Product Management

What do we mean by a Product?

Is the meaning evolving with time?

A Product is any offering

to a market
(for attention, acquisition, use, or consumption)
that aims to meet some customer aspirations

Offerings could be ...

Goods
Tangible objects (that can be felt, tasted, heard, smelled or seen)
eg; motorcycles, cell phones, and soaps etc.

Services
Obtained through the machines, work or labour of others ;
May result in creation of some goods, but service is a key to solution
Variation in output normal

Ideas
Intention to alter perception, attitude or behaviour
Often associated with public service, social attitudes, ideologies...

Anything Else?
Events
Persons
Places
Organizations
Concepts
Experiences
Combination of the above

Mechanics does not buy a drill,

he actually buys its ability
to make holes of the same size
Theodore Levitt

Product The Customer Solution Perspective

A Product is an Offering
that serves certain
Customer Needs & Wants,
i.e. provides Customer Value

Focus on Customers,
Delivering Value to them

Who Determines Value?

What do customers
really want or need
(and hence value)?

Dont sell me Insurance

Dont sell me Insurance

Help me gain peace of mind,
and a great future
for my family and me!

Dont sell me a Camera

Dont sell me a Camera

Help me capture and relive
the most memorable
moments of my life!

Dont sell me a House

Dont sell me a House

Fulfill my dream of a home,
with security, comfort,
a good investment and
pride of ownership!

Dont sell me Clothes

Dont sell me Clothes

Give me a desirable appearance,
style and attractiveness!

Dont sell me Toys

Dont sell me Toys

Help me to give my child(ren)
happy moments!

Dont sell me Things

Dont sell me Things

Fulfill my need for
comfort, security, pride,
good feelings, happy memories

Product The Customer Value Perspective

Marketing & Customer Value

Understanding
Customer
Value

Creating
Customer
Value

Capturing
Customer
Value

Delivering
Customer
Value

The Process View

Sustaining
Customer
Value

Understanding Customer Value

Psychological

Functional

Economic

Understanding Customer Value

Value is defined as the perceived worth
in monetary units of the of the set of
economic, functional, technical and psychological benefits
received by the customer in exchange for
the price paid for a product offering,
taking into consideration all the available offerings and prices.
Anderson, Jain and Chintagunta(1993)

Product Levels/Components

Five Product Levels*

Potential product
Augmented product
Expected product
Basic product
Core benefit

*Increasing Customer Value

Levels/ Components of a Product

Core Benefit The basic need & core benefit that the customer is
really buying
Basic or Actual Product The basic form of what you really buy &
what helps fulfil basic need
Expected Product The offering that most customers expect or
are used to. The set of attributes that the consumers expect as
obvious along with the product (otherwise dissatisfaction)
Augmented Product Attributes / features that exceed consumer
expectation/value-added offering that can create customer delight
Potential Product All possible augmentation, value addition &
transformation that the product may go through in future - the
best or most a product can be

Some Areas of Value Addition

Guarantee
Warranty
Replacement/Money back
Customer Service
Complementary Products/Accessories
Accessibility
Preferential Status
Membership/Loyalty/Relationship Programs

PipalMajik

The concept of Customer Delight

Exceeding Customer Value Expectations,
again & again
(A forever moving goalpost!)

Product The Value Bundle Perspective

Components of the Product Offering

Pricing

Product features

Service mix

Product The Service Differentiation

Perspective

The Concept of Prodice

Product The Experience Perspective

Product The Relationship Perspective

Product The Brand Perspective

From Product Management

to Brand Management

Product vs. Brand Orientation

Product
Product comes first
Focus on products visible
& differentiating
characteristics
Search for best product
Can we have product
without branding?
Production, Technology,
R&D are the key processes

Brand
Brand is more important
Focus on brands intangible
values & imagery
Fitting the product to the
brand
Search for the right
product category
Brand needs at least one
flagship product/service
Consumer Research,
Opportunity Mapping,
Communication are the key
processes

The Brand Management Paradigm

The Old Paradigm

The New Paradigm

Product Management focus

Individual product brands
Brand managed by ad dept
& agency
Brand strategy subset of
marketing, involving one
department
Inward focus, functional
departmental silos
Branding done through
identity and ads

Brand Management focus

Corporate or Master brand
CEO ownership, crossfunctional management of
Brand priority for whole
organisation, involving all
departments
Integrated market-driven
organisation
Branding done through all
customer-facing touch points
(communication &
experience)

The Brand Management Paradigm

The Old Paradigm

The New Paradigm

Business defined by product

category
Growth driven by product
development, R&D &
acquisition
First product, then
consumer, then brand
Brand marketing treated as
overhead & expense
Brand expenses managed
for short-term profits

Business defined by brand

essence
Future growth driven by
opportunities from brand
essence & promise
First consumer, then brand,
the products & services
Brand marketing treated as
investment
Brand treated as long-term
financial asset

Product Management
vs.
Category Management
vs.
Brand Management

Changes Affecting Product Management

Changing consumer needs & expectations

Changes in the balance of market power

Increased importance of customer retention
Technology change - Data explosion
Technology change Internet/Interactivity
Technology change Mass Customization
Increased global competition
Proliferation of brands in any Product Category

The Market Participants: The 4Cs

The Market
Participants
Competitors

Company

Consumer

Channels

The 5th C - Collaborators

Increasingly, source of differentiation & competitive

advantage
Shared Vision Collaborators Tata Ace & Nano
Partnerships (Nike & Apple) Nike+
Open Source / Common Platforms Linux & Android
Revenue-sharing Platforms Apple Apps, Amazon

What are the implications of Collaboration for Product Management?

The 6th C Larger Context:

Macro Environment
The PESTEL Framework
Political Context
Economic Context
Social & Cultural Context
Technological Context
Ecological Context
Legal & Judicial Context
What are implications of these for Product Management?

Managing any Product means

5C Analysis
Customer
Company
Competitors
(Supply
Chain)
Collaborators
Context

S-T-P Marketing

4P Marketing Plan

Segmentation
Targeting
Positioning

Product
Price
Promotion
Place

The Functional View

The Four Ps:

The Marketing Tools
Marketing
Mix
Place

Product

Customer
Solution

Convenience
Price

Customer Cost

Promotion
Communication

Next Class
Topics
Indian Market: An Overview of its
Diversity
Macro Trends
Consumer Behaviour Trends noticed in
any particular
Product Group or
Category
Assessing New Competition & Strategic
Response

Thank You