The role of the Product Manager

As with many marketing innovations the product manager concept emerged from Procter and Gamble, where by way of an experiment someone was charged to manage a brand of soap. It proved successful. 

Applied to the industrial world, the role expanded to manage a portfolio of products and develop new ones. The strength of creating the product management role was the seamless progression through different departments and stages, with someone there to ensure that important issues were addressed and didn't get overlooked between different areas of responsibility. 

One of the weaknesses, often pointed out, was the lack of direct authority. That was still the province of departmental heads. The product manager was therefore required to work by persuasion rather than by dictate. This cross-departmental role needed people of particular skills, who could champion the product internally as well as externally. The term Product Champion was also applied at a later stage. 

With a trend towards smaller operations and slimmer organizations the product management role may no longer be embodied in individual employees, but the task of managing the diverse requirements from concept through production and distribution to sales still demands a similar focus for success. Most companies will have a portfolio of products to which additions and deletions will be made. To drive this forward needs a focus to identify what products to develop, which to exploit for most return and which to delete, and this focus must be market driven. 

Products or services are what the customer ultimately buys. Just as a real estate agent will tell you the most important issue in selling a property is location, location, location, so in marketing terms this could be product, product, product. Without a product or service to offer that actually delivers what customers demand, no amount of promotion, branding and spin can hide a poor product. That is why the role of product management and an effective and well performing product portfolio is so essential to the success or failure of the enterprise.

Target markets & target audiences

Without a good understanding of target markets and target audiences, marketing communications cannot be accurately directed.

The Government defines markets by Standard Industrial Classification (SIC) codes, which are far broader than required by most specialist businesses. Data relating to size and value of particular markets is typically not available, although in some industries trade organisations may take on this role. You will need to estimate the total value of your market, then calculate your share and establish whether the market as a whole is growing or not and set goals for your campaign. Within this market there may be a number of identifiable sectors that have different applications, requiring segmentation of your market place and matching products and services accordingly.

Next we need to identify the target audience and determine the total population. Not all of the target audience will be buyers. Some will have specification influence, others can be advocates and opinion leaders through endorsement of your product. Users who work with the product also have an influence and will feedback opinions to buyers. In structuring a campaign we therefore need to understand the benefits that these various people comprising your target audience are seeking and address communication messages accordingly. The size of the target audience will have cost implications for delivering your message. For large populations, display advertising in the trade press or web site is often cost effective. Readership statistics can be related to your target marketing profile to find the best match, but there will always be a ‘wastage’ factor due to some readers not meeting your classification.

Direct marketing is cost effective in delivering audience specific messages to named recipients, allowing you to communicate at an individual level. E-mail marketing allows considerable scope for fine-tuning to send messages only with high relevance to individually expressed preferences. Once you have a clear view of the target markets you serve and the target audiences you address, then media and delivery methods can be chosen to maximise your marketing investment and achieve your campaign goals. 

Talking about marketing channels

The days, if they ever existed at all, when prospective buyers were supposed to beat a path to the factory door are long gone. 

Today, businesses, are participating in a global market that exerts a direct influence, even on companies only operating in their home market. Conversely the opportunity to sell products and services to a wider market place has never been better. Moving product from the point of manufacture to the ultimate end user may involve a lengthy chain of participants, or be delivered direct.  With the advent of the Internet and e-commerce continuing to exert changes on the markets addressed and channels to serve them, new business models have emerged. Sales teams are much slimmer than before, product volumes often higher and market channels, distribution and delivery changing to the new paradigm.

Traditionally serving a large customer base, has been through an intermediary – wholesaler, stockist, distributor, dealer or agent. The manufacturer is relieved both of shipping to multiple end customers and the cost, and risk, of carrying perhaps thousands of small accounts, in return for a discount against the published selling price plus marketing and training support. Working through intermediaries can present a number of marketing challenges, in terms of pricing, profitability and keeping in touch with the end user. A term that has been introduced in the last few years is disintermediation – the process of bypassing distribution and going straight to the end customer. Direct selling demands a high level of product quality associated with a ‘plug and play’ out of the box simplicity, to avoid high levels of ‘expensive to deal with’, returns. The use of call centres and the Internet linked with global carrier services and credit payment methods have now given the manufacturer the mechanisms to bypass traditional channels by appealing directly to the end user, but the investment in promotional costs with this model is high.

Finally it is important to remember the roles of specifiers and influencers, although not part of the supply chain, may still wield the real specifying influence. The end customer is often not just buying your product, but a complete working system where a system integrator or consultant may be a key player in bringing together a range of products to carry out the tasks needed by the end user.

PLASA London - images of new docklands venue

After many years at Earls Court, the PLASA Show has moved to Docklands. Here are some images from the area and show floor.

 Trams, cranes, refurbished buildings and modern structures

DLR arrives at Custom House

Cranes 

New life breathed into old buildings

ExCel - entrance to the show

 



Lights, camels and cars!

 

Take to the dance floor with Harlequin

Switched on and connected with ELC's ethernet systems

Market drivers change as markets mature

Like the product life cycle, complete markets or market sectors can also progress through different stages over time. At each stage there are different market drivers, so it is important to understand how these market drivers work. 

During the introductory phase the target audience is small and characterised by innovators and early adopters. Application of new technologies can often be the driver for new markets. There are plenty of examples of markets served by products that previously did not exist – mobile telephony, the Internet, the whole Apple portfolio – where early adopters drive the market forward. In growth markets, the drivers are a constant flow of new users accepting and using the product, as well as an increase in usage rate amongst existing users. 

The next wave of customers, influenced by the early adopters, join the market and in doing so increase the current target audience as well. But while the Internet is still growing the market for mobile telephony has passed the initial growth phase as handset saturation is approached. Mature markets develop when there is no increase in the total population of users and existing users cannot readily use or consume more of the product. More manufacturers will also have entered the market. In mature markets there will typically be many suppliers, little real product differentiation and pressures on price due to high supply and no growth. 

Many industrial markets  are arguably in this state most of the time, leading to excessive discounting to move the product and with suppliers experiencing falling margins. Declining markets are usually characterised by a shrinking total population and sometimes a decline in usage as well. This may be caused by a shift to use different solutions or simply the reason for the product need is no longer valid. 

At each stage of the market cycle – introduction, growth, maturity and decline – the marketing approach will need to address the target audiences which themselves will change and not be a constant. The proposition to early adopters and opinion formers in helping grow a new market will be quite different to marketing to an audience well familiar with the market, comfortable with the same again, resistant to change but not yet ready to move their allegiance to a new and evolving sector.