Product Management

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What is Product Management? Meaning

As the name suggests, product management is the organizational function which takes care of a product during every step of its product life cycle. It stretches from market research to product design and product development to the pricing and positioning and marketing of the product but its focus is on the product and the customers.

Product management requires coordination of multiple teams, processes and business units and the person who is responsible to make that happen is called a "Product Manager".

There are many definitions of "product management" out there, but let's define the product management from the lens of a product manager. For this, we should first breakdown the term into it's components and try to understand what it actually is. This is a common way of working for a product manager. So we breakdown the term and we get two words: 1) Product and 2) Management.

A "product" is a good (including related services) that a company sells and "management" is what all managers around the world do. This means that the whole of "product management" revolves around how successfully you manage your product to achieve the best results.

The responsibilities of a product manager can range from designing various features of a product, building different prototypes, taking feedback and implementing changes to the prototype, designing the final product, to maintaining and updating the product.

Some people call a product manager the "CEO of the product". However, product managers do not have a direct authority over their various teams, so they must learn to lead without authority, by influencing people with his/her vision and approaches.

History of product Management

The concept of product management started back in 1931 when Neil. H. McElroy at Proctor & Gamble wrote a famous memo justifying the need to hire more employees. Proctor & Gamble(P&G) is an American consumer goods company which has a wide range of products. The memo was an 800-word document which described the term Brand Men who were responsible for all the operations of a brand from advertising and promotions to tracking the sales. A typical Brand Man had to carefully study the shipments of the brand, examine the brand development and take efforts according to the situation, take full responsibility for the plans of his brands, etc. McElroy restructured P&G into a brand centric organization where focus on each brand was important. This led to a new era where various companies focusing on brands were formed and later this led to more focus on on individual products. This was the foundation of what we today call Product Management.

Key Functions of a Product Manager

The main functions of a product manager are typically as follows:

• Performing marketing research
• Understanding the customer utility and/or needs
• Prioritizing potential product enhancements and customer requirements
• Understanding the customer experience and taking measures to improve it
• Setting a vision for the product
• Communicating this vision to stakeholders
• Contributing ideas in the product design
• Development of a product strategy
• Creating and maintaining a product roadmap (A product roadmap is a visual summary of the product strategy which shows the vision and direction of the product over a period of time. It can be used by everyone to be on the same page and gain context on their daily work and the next targets.

Components of Product Management Strategy

There are broadly 4 key elements in a product management strategy:

• CUSTOMER: The first and foremost thing is to consider what the customers want and what you can provide them. So, you need to define your customers carefully. You should have a strong, in-depth understanding of the customers' needs before strategizing the product.
• TECHNOLOGY: This is obviously also a key aspect as new possibilities can enhance existing products or even enable new ones.
• COMPETITION & ENVIRONMENT: The macro environment includes the economical, political, cultural and technological forces which have a direct impact on the market and thus on your product's entry in the market. You should study these factors well before deciding on the product launch. Furthermore, understanding the competition is also an important aspect of the product management strategy. You have to determine how your strategy will differentiate yourself from the competition. Your product should try to deliver what the competition can't. You should try to discover new opportunities which are not being currently taken advantage of by other firms/products.
• BUSINESS: If the main objective of your organization is to make profit and your product is not making much profit then it's not going to be a success. So, you should take into consideration the goals and objectives of the organization while developing a product and how it will help the organization achieve its goal.

Benefits of Product Management. Advantages

• Increases collaboration between internal teams.
• Reduces the risks of product failure (it doesn't guarantee that the product won't fail). Because the product management team performs extensive research and considers various scenarios before the product launches, this improves the product before it is even launched.
• Customers' preferences are taken into consideration carefully, which increases customer acceptance and satisfaction.
• Aligns products with the organization's long term vision and objectives. This can create more value for the product and helps to ensure the product properly represents the ideas of the organization as a whole.

Limitations of Product Management. Disadvantages

• Taking care of all main elements (technology, business development and analyzing user behavior) is hard.
• Sometimes a preference of product managers for existing technology or historic product success may prevent them from looking at new possibilites and at the bigger or future picture of client and overall market needs.

Sources:
Gayle Laakmann McDowell (2014), "The Product Manager Role"
William Malsam, "What is Product Management?"

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Compare with: Product Assortiment  |  Product Competition  |  Product Development  |  Stage-Gate  |  Product Hierarchy  |  Product Leadership  |  Product Levels  |  Product Life Cycle  |  Product Line Pricing  |  Product/Market Grid  |  Product Mix  |  Product Portfolio  |  Marketing Mix

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