Product Management

Facts 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 ?? -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 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 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 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 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 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 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.

deliverables 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 - 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 - 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.