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Slide2PRODUCT
Presented by You Exec
DEVELOPMENT
Slide3FEATURES OF PRODUCT MANAGEMENT
INTRODUCTION
Product management is
the process with a focus to bring
new product to market or develop an existing one. It starts with an idea of a product that a customer will interact with and ends with the evaluation of the product's success.
P
resents market information, facts and related strategies to senior management.
Essential to customer communication & provides a comprehensive set of arguments based on market data.
Form and coordinate technical production team
. C
ontinuously
develop and implement solutions.
Synthesize and analyze m
arket
data used to determine product requirements.
Market
Information
Customer
Communications
Team
Responsibility
Demand
Analysis
Slide4INFLUENCING FACTORS
Throughout
the development and implementation processes, the product manager is responsible for incorporating both external and internal factors that could affect business decisions, and consequently influence the direction of the product.
PRODUCT MANAGEMENT
RESEARCH
DEVELOPMENT
SALES
FINANCE
LEGAL
SUPPORT
MARKETING
CUSTOMERS
BOARD
Slide5STEPS AND STAGES
Perform situation analysis of the product range
Create product policy objectives
Develop product strategies
Budget for product development needs and tools
Implementation
and testing
Monitor the product range
INTEGRATE INTO MARKETING MIX
1
2
3
4
5
6
7
Slide6STEPS OF PRODUCT DEVELOPMENT PROCESS
Prepare
Discover
Build
Focus
Launch
Idea
Define
Expand
DAY-TO-DAY
PRODUCT MANAGEMENT
INNOVATE
DESIGN
IMPLEMENT
Slide7P.L.R
STAGE-GATE DEVELOPMENT PROCESS
Gate
1
Stage
1
IDEA
Gate
2
Stage
2
Gate
3
Stage
3
Gate
4
Stage
4
Gate
5
Stage
5
Preliminary
screening
Second
screening
Decide on business case
Post-development
assessment
Post-launch review
Preliminary
investigation
Build
business case
Development
of product
Test &
validate
Full production product launch
Slide8NEW VS. OLD
New
Market
Old Market
Old Product
New Product
Product Improvement
Product Development
Market Development
Product Diversification
Slide9PRODUCT VALUE PROPOSITION
Global product portfolio planning
Market research, idea generation, innovation management
Brand strategy, product strategy
Strategic product planning (life cycle, marketing mix, release planning)
Product control (sales, revenue, profit)
Marketing strategy , product presentation, sales performance management
Support for departments and divisions (sales, operational division, R&D)
Other operational activities (especially at beginning of the product life cycle)
Design
Execution
a
nd
realization
Basic concept
Idea and
analysis
Launch
Testing
and review
PROJECT MANAGEMENT
ONGOING TASKS
PROJECT TASKS
Slide10PRODUCT LIFE CYCLE
50%
40%
30%
20%
10%
REVENUE
10-15
INTRODUCTION
20-25
GROWTH
40-50
MATURITY
20-25
SATURATION
10-15
POSSIBLE DEVELOPMENT
Renewed growth
Contraction
End of product life
Slide11STAGES OF
MARKET
LIFE CYCLE
Introduction
Growth
Stage
Maturity
Stage
Saturation
Stage
Decline
Stage
STATES OF
PRODUCT
LIFE CYCLE
Introduction
Product 1
Growth
Stage
Product 2
Product 3
Product 4
Maturity
Stage
Product 8
Product 5
Product 6
Saturation
Stage
Product 7
Decline
Stage
LIFE CYCLE MATRIX
Slide12CORE PRODUCT
Design
Brand
Quality
Packing
Functionality
Payment Terms
Free
Delivery
Education
& Training
On-Site
Service
Customer
Support
Guarantee/
Warranty
Construction
& Installation
Maintenance & Care
PRODUCT DIMENSIONS
ACTUAL PRODUCT
(Product appearance)
CUSTOMER BENEFIT
(Product or service)
EXTENDED PRODUCT
(Product related service)
Slide13PRODUCT RANGE ANALYSIS
Information about the product’s success
Distinction between profit and cost of the product
Representation of different dimensions
Average revenue per customer
Analysis and presentation of key customer segments
Representation of a product’s progress throughout its life span
Life expectancy of products and development of suitable products and product lines
Product’s share of total sales
Distinction between A, B and C products, depending on the volume of revenue share
REVENUE STRUCTURE OR
ABC ANALYSIS
PRODUCT PROFITABILITY
ANALYSIS
CUSTOMER PROFITABILITY
ANALYSIS
PRODUCT LIFE CYCLE
ANALYSIS
Slide14REVENUE SHARE IN PRODUCT RANGE
A
B
C
NUMBER OF PRODUCTS
0
10%
20%
30%
40%
50%
60%
70%
80%
90%
100%
6
1
2
3
4
5
7
8
9
10
11
12
13
14
15
16
17
18
19
20
ABC REVENUE ANALYSIS
Slide15PRICE DETERMINANTS & INFLUENCING FACTORS
Pricing Policy Objectives
Revenue
Power
Profit
Image
Price Effect
Demand
Competitive pricing
Price/government regulation
Payment and delivery requirements
Exchange rate and inflation
Company-specific costs
PRICE EXPECTATIONS
PRICE ACCEPTANCE
PRICE CATEGORIES
Slide16Price are above normal market value to generate more revenue. This strategy is typically used for high-end products or to attract customer who are willing to spend more for a trend or top quality.
Involves a high introductory price which is gradually lowered over time. It is used when a new product enters the market to first capture customers who’re less price sensitive, then to eventually enlist other customers with lowered price
A strategy that uses relatively short-term, low prices to enter the market and increase market share. The goal is to attract as many customers as possible in the beginning and raise prices later on.
A more extreme form of penetration pricing by which a product is provided free of charge, but additional features must be paid for. This strategy is typically used for digital products that rely on additional revenue streams.
Typically involves temporarily lowering prices, but can also be used as an ongoing strategy to appeal to budget-conscious customers. The profit margin per unit is relatively low, but could be balanced by large sales volumes.
Premium Pricing
Price Skimming
Penetration Pricing
Freemium
Promotional Pricing
PRODUCT PRICING STRATEGIES
Slide17Premium Pricing
Price Skimming
Penetration Pricing
Freemium
Promotional Pricing
PRICE
TIME
PRICING STRATEGIES & TRENDS
Slide18Usefulness and usability
Design
Supply
Environmental sustainability
Packaging
Image
Availability
Service
Price point
Quality
Durability
Brand perception
FACTORS FOR PRODUCT SUCCESS
Slide19Close revenue gap through diversification
Close revenue gap through
Product line expansion
Market development
Revenue through improved core business
Revenue through core business
STRATEGIC GAP
SECURE & EXPAND CORE BUSINESS
STRATEGIC TARGET
PRODUCT GAP ANALYSIS
REVENUE
TIME
Slide20PRODUCT INNOVATION PROCESS
Analyze the current situation and identify problems
Evaluate and select ideas
Generate and collect ideas properly
Introduce innovation to the market
Organize your ideas correctly
Create market
launch plan
Slide21Exploit potential synergies
Improve profitability
Corporate growth
Increase market share
Overcome market stagnation
Increase added value
Increase knowledge
Distribute risk
Ensure sales
Utilize synergies
OBJECTIVES
OF DIVERSIFICATION
Slide22TYPES OF DIVERSIFICATION
Development
Licensing
Cooperation
Acquisition
Use of existing resources
Use of potential synergies
High chance to succeed
Development of own know-how
Fast market entry
Use of existing technologies
Low investment
Low risk
Distribution of risk
Development of synergies
Limited investment
Flexibility
Fast market entry
High entry barriers
Low set-up cost
Long development phase
High use of resources
High development
Problem entry barriers
Dependence on licenser
Only for first phase of diversification
No internal development
License cost
Potential for conflict
Protecting know-how is difficult
Integration problems
Missing market knowledge
Possible legal issues
ADVANTAGE
DISADVANTAGE
ENTRY STRATEGIES
TIME
COST
RISK
Slide23Establish the USP (Unique Selling Proposition) of a product to distinguish it from competitors
UNIQUENESS
Product appearance: design, performance, quality, brand and packaging
DESIGN
Specific services such as guarantees, delivery conditions, customer service, tutorial etc.
SERVICE
CUSTOMER BENEFITS FROM PRODUCT
Slide24Basic Features
Performance
Special (Extra) Features
ABSENT
FULLY INTEGRATED
PRODUCT FEATURE
LOW
HIGH
CUSTOMER ENTHUSIASM
Customer
Response
vs.
Product
Features
KANO MODEL
Slide25PRODUCT MARKETING
ANSOFF’S MATRIX
Same customer type
Company serves new customer type (or own customer)
Similar customer type
Horizontal diversification
Vertical diversification
(vertical integration)
Concentric diversification
(distribution and technology is related)
Concentric diversification
(sales is related)
Concentric diversification
(technology is related)
Conglomerate diversification
New customer type
RELATED TECHNOLOGY
UNRELATED TECHNOLOGY
NEW MARKETING
NEW PRODUCTS
Slide26PRODUCT MARKETING -
TARGET COSTING
SHARE OF BENEFITS
SHARES OF COSTS
Too complex /
too expensive
Too simple /
Too
cheap
Determine target costs
Target price of product
Targeted profit
Total costs
Target cost splitting
Cost share of individual
components of product
Target cost realization
THREE SEGMENTS
Slide27PRODUCT SUCCESS & MANAGEMENT METRICS
75%
USE OF FEATURES
Insert some text about product success and management metrics.
55%
USE OF PRODUCT
Insert some text about product success and management metrics.
40%
MIGRATION RATE
Insert some text about product success and management metrics.
88%
QUALITY CONTROL
Insert some text about product success and management metrics.
Slide28Product idea / product concept no. :
Xxxx
Assessment criteria
Weight (total 100%)
Point 1 to 10
Weighted point scores
1. Company criteria
Technical feasibility
Level of investment
25%
10
11.75
2. Customer criteria
Apparent customer benefits
Development of new customer stratification
40%
9
18.8
3. Retail criteria
Additional retail proofing
Retailers’ willingness to collaborate
5%
10
2.35
4. Competitive criteria
Obtaining competitive advantage
Threat of competitive imitation
25%
8
11.75
5. External criteria
Regulatory restrictions
Environmental sustainability
5%
10
2.35
TOTAL WEIGHTED PRODUCT SCORES:
47
SCORING MODEL & POINT RATING SYSTEM