Product ManagementProduct Management

Facts about Product ManagementFacts about Product Management

• Many managers realized that investment in INNOVATION is critical for future growth & even in the survival of the firm.

• “A successful new product does more good for an organization than anything else”

• Business firms expect a high percentage of their SALES & PROFITS from new products.

• “New products process is exceedingly difficult”.

• New products are “fun and “exciting”!

- it is rewarding and fulfilling to see an object come into being for the first time, to see a critical consumer or individuals’ needs are met, to see a new service performed for the first time.

• Increased GLOBALIZATON-

-Firms are viewing new product development as a “global process” in order to take advantage of worldwide opportunities & increase their efficiency & effectiveness of innovation.

What are “NEW” Products ??What are “NEW” Products ??

- Products that are considered “new-to-the-world” or products that undergo minor repositioning and cost reduction

- “New-to-the-world” products or “really new products” – revolutionize existing product categories or define wholly new ones;

-they are most likely require consumer learning/ or incorporate a new technology;

Examples: desktop computers with word processing software, HP laser printers, hybrid cars

• “New Product Line”- if a firm introduces a new

product in addition to the present line that is new to the company.

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Other Concepts• “Business-to-Business” products- use for the

furtherance of business operations.

- purchased by groups of people• Consumer products – purchased by individuals for

personal use.

• Services

- almost anything (products) marketed today has a tangible & intangible component.

• International or Global products• - available not only in the country of origin but

also marketed and distributed in other countries.

Basic Ideas/ Views in Product ManagementBasic Ideas/ Views in Product Management

1. Complexity of operations & decisions

- the most dramatic & difficult part of product

innovation

- many people are involved

- new products means more work

2. Product innovation must be pushed

- spearheaded by top management & unit managers.

- must be explained to all people involved, the rationale & the benefits derived.

3. Conflicting set of management demands that product innovators must meet

- e must serve up products that have valuable attributes, meet end user needs but also are high in manufacturing & design quality low in cost and get to the market in a short span of time.

Important note• Marketing activities contribute to all 3 basic

ideas or views such as; 1. Market Studies-tell the team (people involve) the nature & urgency of customer needs; 2. Product Testing & Studies-point out where design & manufacturing can be altered; 3. Marketing Research techniques-help to understand the trade offs between price (cost) & product features.

Breakthrough InnovationsBreakthrough Innovations

• Companies (investors) must be willing to take great risks;

• Some firms support technical research;

• Technology is a key player today.

Is (New) Product Management a Science or an Is (New) Product Management a Science or an Art? Art?

• It is combination of both• Art because is essentially based on skills, intuition,

experience, imagination and creativity.• Science because of the use of analytical techniques

that would make a better product

For example: 3 tests are critical in product innovation such as-

• Concept test- to determine if the intended user

really needs the proposed item.

• Product use test – to see if the item developed

actually meets that need.

• Market test – to see if e have an effective

marketing plan.

Invention and InnovationInvention and Innovation

• Invention – there’s a dimension of uniqueness-

the form, formulation, function of

something.

- usually patentable

• Innovation – refers to the overall process

whereby an invention is transformed

into a commercial product that can

solved profitably.

Topic- The New Product ProcessTopic- The New Product Process

Phase 1- Opportunity I.D. & Selection

* generate new product opportunities as results

of the on-going business operations, new product

suggestions, changes in marketing plans,

resource changes & new needs/wants in the

market place.

deliverablesdeliverables

Phase 2 – Concept Generation

* select a high potential/ urgent opportunity

and begin customer involvement.

Phase 3 – Concept/ Project Evaluation

* Evaluate new product concepts on technical,

marketing & financial criteria.

* Rank them & select the best 2 or 3

Phase 4 - DevelopmentPhase 4 - Development

A. Technical tasks

- Specify the full development process and

its deliverables

- Undertake to design prototypes; test & validate

prototypes;

- Design & validate production process for the

best prototype.

B. Marketing tasks

- Prepare strategies, tactics & launch details for

marketing plan;

- Prepare proposed business plan and get

approval;

- Stipulate product augmentation

Phase 5 - LaunchPhase 5 - Launch

- commercialize the plans & prototypes from

development plans;

- begin distribution & sale of the new product;

- Manage the launch program to achieve the goals

and objectives.