Being market-driven requires organizations to build a strong product management capability. Most organizations struggle to create a role in their business that is exclusively geared towards listening to their market. Those who do, gain a better understanding of what drives VALUE, and incorporate that insight into the product development process.
In a mid-sized organization, it is the job of the CEO to take feedback from each department and drive the product development process. Unfortunately, most CEOs are so busy with meetings, fire fighting, purchasing, and other important business issues, that they don’t leave time to adequately manage product development. This results in many problems.
One approach that is working well for mid-sized enterprises is to introduce a Product Management business leader. This change in organizational structure relieves much of the pressure on the CEO related to product development, and provides an internal representative for customer & prospects.
If you are struggling to make sales, having problems with time-to-market, or need to improve profitability, strongly consider revamping your product management infrastructure.
Product Management is an organizational function dealing with the product planning, development, and marketing, for all product lines, at all stages of the product lifecycle.
Essentially, the role of Product Management is to analyze & identify market problems, quantify opportunity size, and determine risks & costs, to provide business cases to senior management for decision-making. Once approval is given, Product Management is responsible for building the right product for the market, and supporting sales in their efforts.
The Product Lifecycle Stages
Stage 1: Development – this is the most costly stage of the cycle as there are no revenues to support development efforts. Losses occur in the short-term, as precious resources are allocated to development efforts.
Stage 2: Introduction – losses continue in this stage due to high costs and low revenues. There is little or no competition and demand needs to be generated. Customers need to be .sold. on trying the new product.
Stage 3: Growth – costs reduced from economies of scale, sales volume increases significantly, and profits are earned. Competitors begin to develop competing products while prices are at their maximum.
Stage 4: Maturity – costs are relatively low as the need to generate demand has decreased; sales volumes peak, competition starts to heat up. Prices drop based on competitive pricing, mergers & acquisitions occur, and brand & feature differentiation becomes more important. This is usually the most profitable phase of the lifecycle.
Stage 5: Decline/Stability – sales volumes level off or begin to decline as competitors chip away at market share. Prices diminish and production & distribution efficiency become top drivers of profitability.
Product Management vs. Product Marketing
|Product Management||Product Marketing|
|Product Planning & Design||Sales Support & Collateral|
|Functional Requirements||Market Needs & Problems|
|Product Lifecycle Management||Product Messaging|
|Product Portfolio Management||Product Promotion, PR, etc|
|Product Differentiation||Product Positioning|
|Sales & Service Training||Outbound Marketing Efforts|
|Analyst Briefs & Keynote Talks||Tradeshow/event Facilitation|
|Product Requirements Doc.||Market Requirements Doc.|
|Product Development||Product Launch|
|Win/Loss & Profit Analysis||Competitive Analysis|
|User Personas & Use Cases||Lead Generation Activities|
|Technology Assessments||Channel Development|
In “Crossing the Chasm”, Geoffrey Moore defines and recommends two separate positions: “A product manager is a member of either the marketing organization or the development organization who is responsible for ensuring that a product gets created, tested, and shipped on schedule and meeting specifications. It is a highly INTERNALLY FOCUSED job, bridging the marketing and development organizations, and requiring a HIGH DEGREE OF TECHNICAL COMPETENCE and project management experience. A product marketing manager is always a member of the marketing organization, never of the development group, and is responsible for bringing the product to the marketplace and to the distribution organization. it is a HIGHLY EXTERNALLY FOCUSED job.”
Be sure to differentiate between Product Management and Product Marketing, as these roles require much different skill sets. Use our Product Management Director Job Description and Product Marketing Manager Job Description for help.
Product Management Tools and Techniques
- Understand Distinctive Competence: determine what makes your firm stand out. Conduct an internal SWOT Analysis to document strengths, weaknesses, opportunities, and threats. Evaluate win/loss reports, operational product metrics, and market share statistics.
- Target Market Analysis: read our report on Market Segmentation, Targeting, & Positioning to start analyzing your market segments. Determine the size of your market and understand prospective client issues. Use this information to build a product Business Case.
- Determine Market Requirements: conduct research and survey customers and prospects to identify opportunities for product development. Document each opportunity with a Product Development Charter and present to senior management for approval to allocate more resources. Complete Market Requirements Document and Product Requirements Document.
- Product Development: create Product Development Schedule, Feature List Priority Analysis, and Product Sanity-Check to document development efforts. Reprioritize and sanity-check throughout the process.
- Product Marketing: use our Product Launch Checklist to organize your product marketing campaign. Following is a list of other helpful tools for managing this process:
What is a Product Roadmap?
A product roadmap is a management communication document that outlines market segments, estimated revenues, market/technology trends, future customer needs, products to address needs, and technology required to build/refine products.
- Retaining Customers: providing customers with a high-level roadmap of where your product is heading is critical for communicating reasons why they should continue to do business with your organization.
- Support Product Marketing: communicate your product roadmap when speaking with industry analysts to gain further exposure. Submit press releases that highlight new product feature releases and timelines.
- Build Internal Alignment: guide your engineering and product development staff, and identify resources that will be required to build or refine your products.
- Secure Financing: product roadmaps may be requested by potential investors looking to acquire mature businesses or invest in start-up organizations.
- Reporting to Senior Management: product roadmaps help senior management understand your product development plan to ensure that you have the resources required to create or refine existing products.
Implementing a Product Roadmap
- Determine Scope of Roadmap: discuss product roadmaps with senior management to determine the level of detail and complexity that is required for your organization. Assess the time required to create and maintain your roadmap and assign resources to the project.
- Conduct an External Analysis: use our STEP Industry Analysis tool to document market conditions, technology landscape, and identify market opportunities. Read our Market Segmentation, Targeting, & Positioning report if you need help with identifying new market opportunities.
- Perform a Competitive Analysis: organize your product features into high-level categories and use our Product Feature Competitive Analysis tool to identify areas to drive feature-based differentiation in your market.
- Identify Product Feature Requirements: distribute our Product Feature Request Form to your Sales & Customer Service staff to document new product ideas and work with customers and prospects to develop a Market Requirements Document. Create your Product Requirements Document and use our Product Feature Priority Tool to prioritize requirements for new or existing products and identify “silver bullet” features.
- Conduct an Internal Analysis: use our SWOT Analysis tool to assess internal skills and resources and evaluate your technology environment. Using your Product Requirements Document as a starting point, perform a Product GAP Analysis to strategically plan for improvements to Market Research, Product Strategy, Capabilities, Technology, and Product Marketing.
- Develop your Product Roadmap: use our product roadmap to communicate new market opportunities, and document technology required to support product development. Create a Product Development Schedule for new products or a Product Feature Release Schedule to organize delivery of new features for existing products.
Improving product management capability is a key priority for mid-sized enterprises. Firms who develop a competitive advantage in product management usually experience higher revenue growth rates, better profitability, and larger market share than their competitors who are more internally focused.
While it may take a few more minutes to document your analyses than to have a “fly-by-the-seat-of-your-pants” type of meeting, the time spent should be considered well invested. Demonstrating a clear business case for a new product, managing the requirements gathering process, and deploying an effective go-to-market strategy are critical keys for success.
If you need more assistance than this report & tools can provide, consider attending a seminar from Pragmatic Marketing, who are considered to be the leader in the field.