MODULE 1

PRODUCT MANAGEMENT
Product management can be defined as the general business structure within a company that
supports and manages all the activities related to developing, marketing and selling a product – or
even more than one – all through its lifecycle.

Managing a product encompasses everything related to a specific product, from creating a concept
and studying the targeted audience to developing, producing and marketing it (and providing
customer support afterwards).

Together with product lifecycle management, product management provides information about a
specific product to the entire company and its extended supply chain.

Product management’s general business purposes are to make the product valuable for its
targeted customer (creating customer value) while producing measurable benefits that make
every business viable such as revenue, profit margins, etc.

Since its goal is to deliver value to the business, product management professionals play an
essentially strategic role in determining the necessary actions for achieving these goals.

Due to the complexity and amount of tasks involved, product management can be broken down
into two very different (but complementary) areas: product development and product marketing.
These two areas must work together in order to maximize sales revenues and profit margins and,
consequently, its market share.

The person in charge of managing a product is normally the product manager. He/she is normally
responsible for coordinating multiple teams that operationalize the aforementioned tasks such as
keeping close track of the market conditions to guide the definition of new features to be developed
as well as overseeing the production of said product.

Product managers also have the responsibility of being always alert observing the market for new
development opportunities to cater to new customer’s needs and help the company stay ahead of
its competition.
 What Is a Product?
A product is any good, service, or idea that can be offered to a market to satisfy a want or need.

In general, a product is defined as a “thing produced by labor or effort” or the “result of an act or
a process.”

In marketing, a product is anything that can be offered to a market that might satisfy a want or
need. In retail, products are called merchandise. In manufacturing, products are purchased as raw
materials and sold as finished goods. Commodities are usually raw materials such as metals and
agricultural products, but the term can also refer to anything widely available in the open market.
In project management, products are the formal definition of the project deliverables that form the
objectives of the project.

Goods, Services, or Ideas

Goods are a physical product capable of being delivered to a purchaser and involve the transfer of
ownership from seller to customer.

A service is a non-material action resulting in a measurable change of state for the purchaser caused
by the provider.

Ideas (intellectual property) are any creation of the intellect that has commercial value, but is sold
or traded only as an idea, and not as a resulting service or good. This includes copyrighted property
such as literary or artistic works, and ideational property, such as patents, appellations of origin,
business methods, and industrial processes.

“Anything that can be offered to a market for attention, acquisition, use or consumption that might
satisfy a want or need. It includes physical objects, services, persons, places, organizations and
ideas”. _________________Kotler, Wong, Saunders, Armstrong
What are the five product levels?

1) Core product or core benefit

At the base level the utility that you are providing with the product, forms the core product or the
core service. The core product of a book is information. It is not the book itself. The book is selling
the information in it. The core product of a restaurant is offering food. It is not the building of the
restaurant or the service in itself. The core product is the food.

The more important the utility or the benefit you provide, the more likelihood that the customer
needs your product. Unfortunately, it is also likely that your sector will have a lot of competition
when the core product is a common product. The more unique the core product (engineering), the
lesser the players in the market and lesser the competition. This is where, understanding the other
five product types can help you as a marketer, as the other product levels can help you differentiate
your product.
2) Basic product
If we talk about restaurants, there are various types of restaurants. Some are 3 star, some 4 star,
some 5 star and even 7 stars are found in this world. However, the basic level of a restaurant is the
one found in your locality, offering basic food.

If a hotel, wanted to turn its core product (rest and food) into a basic product, then the building of
the hotel, the type of bed, the type of food, all together form the basic product.

3) Expected product
Continuing the above example, if i were to say that you are going to a 5 star hotel, will you only
expect a bed, and normal food? No. You will expect a lot more. Your expectation is built on the
fact that the hotel is a 5 star hotel.

As the brand grows in reputation, you have to take care of the expectations of the consumer.
Daikin, which is a world renowned air conditioning brand, is expected to have world class service
for its air conditioners. If it does not deliver on this expected product, then it will affect the basic
product (air conditioner) as well.

4) Augmented product
A BMW or a Mercedes is an augmented product. When people were bored of normal cars and
passenger cars offered by the likes of Volkswagen, General electric or others, there entered a new
range of premium sports and luxury cars like the BMW, the Mercedes or Audi.

These products saw beyond the expectations of the customers and went on to provide “Exceeds
customer satisfaction”. This basically means that where you expected normal seats, these seats had
warmers installed. The interiors were fantastic and were designed by high end fashion designers.
The pick up and handling were excellent.

Although the price was more, the product designers of BMW, Audi or Mercedes gave the
consumers what they wished for. They gave them something which was far beyond an expected
product. They gave them luxury on four wheels. The augmented product is the desire of the
customer, which you convert to reality. A 5 star restaurant, giving a fantastic four course meal,
with the relaxation and the ambiance of your life, is serving as an augmented product.
5) Potential product
Each and every company explores the potential of the products they already have in the market. A
best example of Potential product is the rivalry between Facebook and Google for virtual reality.
Where Facebook has Occulus rift for gaming, Google has google glass for day to day usage. Each
of them is progressing forward to dominate in the potential product – Virtual reality.

Mark Zuckerberg strongly believes that there will come a time when we won’t need to buy a
television. We will buy a virtual reality glasses, and we can watch all the channels for a month for
some determined costs. We won’t need the television to deliver the movies or the programs to us.
Many such products have become obsolete because of potential products which were the future.

Each product in the market has a future. The telephone which was launched, was defeated by the
pager and then mobiles and finally smartphones. The polaroid and film using cameras lost their
market to digital cameras, who are in turn losing their markets to smartphones again. Laptops have
beaten desktop computers. Amongst the five product levels, it is the potential product you have to
keep an eye out for. It can bring you down to the street, or it can make you a millionaire.

What Is Product Management?

Put simply, product management is a way to organize the planning, production, marketing and
other tasks related to the creation and distribution of a product. It involves the coordination of
teams, data, processes, business systems and more.

In reality, product management can be a complicated matter. There are a lot of moving parts in the
creation of any product, regardless of its size. Without a methodology and proper tools to manage
the many elements that must be tracked throughout the life cycle of the product, the risk of failure
is greatly increased.

To understand product management and its challenges requires a deeper dive than a two sentence
definition. There are, for example, complementary disciplines that can be part of product
management, such as product development and product marketing. Their objective is to maximize
sales revenues, market share and profit margins.
Product management is important because it aligns the company with the market.

 Builds an understanding of the market, competitive dynamics and opportunties

 Understands customer needs and how best to meet them
 Prioritizes opportunities based on urgency, revenue potential, market dynamics and
buying criteria
 Aligns product roadmap with customer needs
 Helps deliver products to market and communicate the value to customers
 Provides continuous feedback on changing market conditions, or customer needs

4 Key Responsibilities of Outstanding Product Managers

Product manager responsibilities:

1. Has responsibilities to manage from concept, to design, sample production, testing,

forecast, cost, mass production, promotion, support, and finally product end of life.
2. Delivers the operating plan: the achievement of growth objectives including market
share, revenue, profit and return on investment for all the channels/categories of business
and/or key customers.
3. Responsible for managing and implementing marketing activities through research,
strategic planning and implementation.

PRODUCT MIX

The Product Mix also called as Product Assortment, refers to the complete range of products
that is offered for sale by the company. In other words, the number of product lines that a company
has for its customers is called as product mix.

The Product Line refers to the list of all the related products manufactured or marketed by a single
firm. The number of products within the product line are called as the items, and these might be
similar in terms of technology used, channel employed, customer’s needs and preferences or any
other aspect. For example, the product lines of ITC are FMCG, Hotels, Paper Board and Packaging,
Agribusiness.

The product mix has four dimensions: Breadth, Length, Depth, and Consistency. The Breadth
of a product mix shows the different kinds of product lines that firm carries. Simply, it shows the
number of items in the product line. This dimension of the product mix represents the extent to
which the activities of the firm are diversified. In the example below, there are 4 product lines that
show the width of the ITC.

The Length of a Product mix refers to the number of items in the product mix. In the example
below the length is 11. As in the foods line, the number of items is 3, in cigarettes is 3 and so on..
On adding all the items, we get the length of a product.

The Depth of a product mix refers to the variants of each product in the product line. For example,
in the example below, curry, pastes, biryanis, conserves, etc. shows the depth of the foods product
line.
The Consistency of a product mix shows the extent to which the product lines are closely related
to each other in terms of their end-use, distribution requirements, production requirements, price
ranges, advertising media, etc. In the above example, it is clear that ITC’s product lines are less
consistent as these perform different functions for the buyers.

These terms in a product assortment help the firm to take a decision regarding the addition or
removal of the product items in the product lines. Generally, the firms introduce a new product
item into the existing product line as it is easy to gain the customer support for the new product
due to the customer’s familiarity with the existing product line.