Download - Product Management - Basics of Basics
Author - Ravi Lakkundi
What is this presentation all about?
• An insight about product management for
aspiring or budding product managers
• Focusing of practical approaches to product
management (Mainly Strategic)management (Mainly Strategic)
• Learning by Example
Continue if you are NEW to Product Management ….Continue if you are NEW to Product Management ….Continue if you are NEW to Product Management ….Continue if you are NEW to Product Management ….
Product Management
• Product management is an organizational
lifecycle function within a company dealing
with the planning, forecasting, or marketing of
a product or products at all stages ofa product or products at all stages of
the product lifecycle (wikipedia)
• Comprising of Product Development and
Product Marketing
One who manages the Product is a
Product manager !! ;)Product manager !! ;)
Product Manager - Definition
• Product Manager is CEO of a Product
A B C A BAnalysis – Market Analysis
Business – Business Commitment (Money-Money-Money)
Customer – Customer/Consumer ContextCustomer – Customer/Consumer Context
Adapt – Adaptation to Change in Business and Market feedback
Business – Generate New Business and sustain
• By Definition– Product Manager keeps scouting for new business for an organization,
Selects a particular interest area which can reap financial/otherbenefits for an organization and develops that offering/product forthe organization and further manages that offering throughout itslifecycle
Strategic/UpStream
Product Manager
Product Manager
Tactical/DownStream
Product Manager
Concept
Create
Commercialize
Product marketing
and Lifecycle
Management
Product Positioning
Routes to Market
Marketing Plan
Launch Plan
Collaterals and Sales
Pre-sales
Promotion
Channel and Sales Training
Evangelism
CRM
New Product Development/Introduction
Philosophy
• It all starts with one Compelling Concept
• Evaluate the concept, requirements and feasibility
• Can the idea make enough business? $’s
• Check the ROI if engineered
• Gather engineers and start engineering
• Check at every stage of engineering if the product being • Check at every stage of engineering if the product being engineered/designed meets the objective
• Modify and Adapt to changes during course of design/engineering
• Check the final Engineered product and compare with objectives –Again
• Satisfied …? Yes … Enter into Mass production
• Launch the product and see it make money ……
Best Approach to learning
Lets take a hypothetical company
• Company Name – ACowStick Pvt Ltd
• ACowStick Portfolio – Multimedia Speaker • ACowStick Portfolio – Multimedia Speaker
Manufacturers
• ACowStick Market Share – Growing Linear
• ACowStick Mind Share - Significant
Story Buildup …
• ACowStick visioning to become a leader inconsumer electronics industry intends tostrengthen its product portfolio ofMultimedia/Desktop Speakers
• ACowStick has a great set of engineers and its• ACowStick has a great set of engineers and itsproducts are valued for their engineering, Designand are sold world wide
• ACowStick is eyeing the emerging Markets forexpanding business and needs to make productswhich fit the demographic more accurately
Product Manager – Mr. DB …..
• ACowStick has Mr. DB as theirstar Product Manager
• Mr. DB sets out for scouting themarket to find out opportunitieswhere he can grow the companybusiness and expand the productbusiness and expand the productportfolio
Ideas for new product development can emerge from any
place – Either by Market research, Competitor info etc
DB Idea !!!
• Mr. DB aligning to the ACowStick core
business looks at Market Trends in Multimedia
Speakers
• He realizes that the Tablet business in general• He realizes that the Tablet business in general
is growing and soon realizes that there is a
potential on making some new products
• DB sets puts his gray matter to work and starts
thinking aloud
The Tablet Trend – DB View
• DB hires a Market research firm and focuses
his search on global Tablet sales and asks the
firm to get him – Market Size, Market Growth,
Market potential for Tablets aloneMarket potential for Tablets alone
• The Market research firm gives DB some
graphs on trends, sales, units etc etc
DB looks at the iPad and Other tablet Sales
Results from the research
-Tablet growth World wide is
significant
- Most popular price point is
$150 to $250 tablets, Android
tabletstablets
- In India alone Tablets priced
less than 12000 Rupees (~$200
USD) are sold 1 million units
annually (highest in the world !!)
- 80% of tablets sold in India are
7 inch (priced at ~12000 INR)
Making a valid business case / Market Trends
• Looking at the data DB establishes the fact that Tablets are here to stay and majority of them come in only 2 standard size 7 inch and 10 inch
• 7 inch is most popular
• He ponders that if Tablets are more popular then so should be accessories market Ex: Headphones, Portable speakers etc
• People using Tablets will use Accessories with it for entertainmententertainment
SAMPLE DATA – May be irrelevant
Making a valid business case / Market Trends
The Accessories Market
• Finding out the accessories used with 7/10 inch tablet is a little tricky, customers may or may not buy a bundled accessory
• There are many accessories to categorize Headphones/Portable Speakers/Docking Speakers Headphones/Portable Speakers/Docking Speakers etc
• Post researching the market again DB finds out that 30% of Tablet buyers buy a portable speaker/Headphone/Some kind of entertainment device with the tablet
Making a valid business case / Market Trends
The Accessories Market - Continued
• DB figures out the accessory portable speakermarket worldwide is around 20 billion !!
• Tablet covers accessory itself is around 2 Billion !!
• DB figures out a big potential for a “Killer Tabletaccessory” and he knows that ACowStick is a very
• DB figures out a big potential for a “Killer Tabletaccessory” and he knows that ACowStick is a verypopular and is a desirable Brand
• Now what he needs is either a highly acceptableproduct “A Me too product” or a “disruptivetechnology product (New Me)” and take somerisk with market acceptability
Making a valid business case / Market Trends
New Product Introduction
• DB chooses to design something new for tablets,
a completely new product yet acceptable
• DB knows that a Product Manager is also called
the First Customer, he does an independentthe First Customer, he does an independent
unbiased evaluation of “Me too” Vs “New Me”
and takes input from his team
• Since customers look for innovative, good value
for money products the team unanimously
decides on “New Me” approach
Target �Make Something New – Out of the Box
Accessory – A Speaker for Tablets
Customers want good
product .. good sounding …
new and freshProduct to have
Customer Context
Product to be
structurally correct
and be usable
&^&^%$#*&^%$%
#^%&^%*((*^*&^
Conceptualize …….
• He decides to make aspeaker for tablets that isunique
• It is a part of the tablet coveror can act as a tablet cover
• It is a part of the tablet coveror can act as a tablet cover
• Can flap open or close whenrequired
• And not to forget soundsawesome !!
The First Look ….
• DB slowly builds up the idea
• He contemplates – This is moreusable than a portable speaker
• A speaker system is difficult forcustomers to carrycustomers to carry
• Any thing that is not a part ofthe system becomes anaccessory
• This particular idea issomething different – Anaccessory in principle butpractically not an accessory !!
A Tablet Cover with foldable
Speaker Attached to it !!
Conceptualize … Nurturing the IDEA ..
• DB knows its too early to talk to design team but knows that he needs some sort of visual before taking his next step
• DB influences his designerMr. Stu and makes sure hegets the idea. Post analyzinggets the idea. Post analyzingthe idea Mr. Stu comes upwith a rough rendering ofthe product concept
• DB does not spend muchtime in designing since hedoes not still know what hisstakeholders have to sayabout the idea in general
When OpenRendering …. Draft
When Close
Tablet with Cover (Speaker flaps open)
The Product Line ….
• is happy with the rendering and now needs
to quickly make a good product line and name
a product to present to his stakeholders ..
• He names his concept as “FunTabStick” and• He names his concept as “FunTabStick” and
develops a product line and how product will
work
working …
• The user will use the FunTabStick and slide in theTablet (FunTabstick actually is a cover with speakers)
• The user will flip open the FunTabStick speaker on sidesand they will be connected by innovative mechanism
• Once the user slides in the tablet the tablet will• Once the user slides in the tablet the tablet willautomatically pair (Through NFC etc) with theFunTabStick cover and the speakers will start playingthe media audio (Bluetooth)
• Needless to say FunTabStick is a Powered cover with Li-Ion Batteries (Smartly packed with Speakers)
Product Line buildup …
• DB now thinks on a product line he can build
from his idea conceived
• He also thinks of an initial price point the
product can be offered (Market research product can be offered (Market research
shows that 40% customers are willing to pay
20% of the tablet cost for a product like
FunTabStick)
FunTabStick - 7 FunTabStick - 10 iFunTabStick Mini iFunTabStick
Tablet Size 7 inch -
Standard
10 inch - Standard iPad Mini iPad - Standard
NFC enabled BT √ √ √ √
Speaker Output 2W 2W 2W 2W
Battery Life 8 Hours 8 Hours 8 Hours 8 Hours
Speaker
Configuration
4.2 4.2 4.2 4.2
Price (One World-
One Price)
$39 $49 $44 $54
This will help to concretely
justify the Target Retail Price ,
features and benefits over
competition
Fund Raising and Approvals ….• Once DB is confident on his idea and the feasibility
of the product. He presents his work in a conciseProduct Concept Document and presents to aapproval committee in ACowStick
The Executive committee decides (Based on
their experience and analyzing the defense puttheir experience and analyzing the defense put
forth by DB) that the concept has some
potential and approves for further
Requirements and feasibility check
DB is asked to share a detailed ROI (return on
Investment) in comfortable 3 weeks time …
Return On Investment
• With a few more rendering of all theFunTabStick version DB now works with aprocurement team and finds a supplier basedout of China who can help him build such aproductproduct
• DB is smart and has already spoken to antaken in confidence his local engineering teamthat the product is feasible in design andsound quality
The Suppliers - ODM
• DB gets the quote from 3 trusted suppliers
FunTabStick7 FunTabStick10 iFunTabStick
Mini
iFunTabStick
Supplier 1 $20 $26 $23 $35Supplier 1 $20 $26 $23 $35
Supplier 2 $18 $24 $22 $37
Supplier 3 $22 $27 $23.7 $35
DB knows that he needs to challenge his teams to achieve the lowest target
manufacturing costs, but he knows he will have to work with a Program Manager
who will ensure that cost at every stage is carefully controlled
Target FOB
• Having a quick look at the supplier quote and
by talking to his best engineers he sets a
target FOB cost and is ready to share the
details with Global teams for a ROI checkdetails with Global teams for a ROI check
FunTabStick7 FunTabStick10 iFunTabStick
Mini
iFunTabStick
Target FOB $ 21.4 $25.7 $23 $36
FOB – In Short Supplier will provide the packaged goods at the nearest port of
export/warehouse
Return On Investment
• DB now discusses his new concept product withglobal teams (Sales and Marketing) and gets theirconsent
• He shares them his concept document andproduct line buildup and later …..product line buildup and later …..
• He then tries to sell his idea to his first customers(Global Sales and Marketing Team)
• He request global team that if such a product isever developed what would be projectedvolumes annually …
For ROI DB has to work with finance management team of ACowStick
The Reaction …..
• Global teams react to DB’s proposal with
annual forecast volumes and their preferred
price – Some of them feel that the price is too
high for such product and some feel its low !!!high for such product and some feel its low !!!
and some feel the product wont sell in their
market
The forecasts …..Stick7
12 month
forecasts (Unit
volumes)
Stick10
12 month
forecasts (Unit
volumes)
iStick Mini
12 month
forecasts (Unit
volumes)
iStick Std
12 month
forecasts (Unit
volumes)
Comments
India 20000 6000 12000 15000
China 15000 25000 10000 25000
Americas 50000 60000 30000 30000
Brazil 2000 2000 2000 2000 Cost too high
Russia 5000 5000 5000 5000 Concept not
acceptable
Europe 40000 50000 40000 60000
Total 132000 148000 99000 137000
ROI CalculationModel 12 month Forecast
(units)
Retail Price ($) Revenue
FunTabStick - 7 132000 39 5148000
FunTabStick - 10 148000 49 7252000
iFunTabStick Mini 99000 44 4356000
iFunTabStick 137000 54 7398000
Total 516000 46.5 (avg) $ 24,154,000
Channel Routes – How to make your product
reach customer – best, smart, cost effective way
Distributor Dealer
Customer
Route 1: ACowStick -> Distributor -> Dealer -> Customer
Route 2: ACowStick -> Dealer -> Customer
Route 3: ACowStick -> Customer
There exists many such routes
This is just one possibility
ROI Calculation – Example (India & US)
• Price for FunTabStick – 7: $39
• Assuming a 2 level channel (worldwide) for
go-to-market
– Distributor– Distributor
– Dealer/Retailer
• Lets take two example countries
– USA
– India
Reading the slide ROIFunTabStick 7
12 month
forecasts FOB Landed Cost Distributor Price MSRP/MRP in USD Revenue Margin Margin $
INDIA 20000 $21.4 $27.9 $29.3 $39 $585,366 5% $29,268
USA 50000 $21.4 $24.0 $28.7 $39 $1,433,500 19% $272,365
RUSSIA 5000 $21.4
FILL DATA HERE$12,000
CHINA 15000 $21.4 $50,000
EUROPE 40000 $21.4 $350,000
BRAZIL 2000 $21.4 $8,000
Total:
Total: $ 6,013,610 Average: 12%
Total:
$721,633
Financial Summary for
FunTabStick7
Target Retail price $39
Target Unit Sales 12 months 132000
Target Revenue $ 12 months $6,013,610
Target Margin $ $721,633
Target Margin 12%
Target Project Cost $100,000
• Similarly the financial returns are calculated for
all the SKU’s (All FunTab’s)
The Day of Approvals …
• DB presents to an Executive panel the following• DB presents to an Executive panel the following– Product Concept
– Features and Benefit
– Competitive landscape (This is a “New Me”)
– ACowStick Advantage
– Volume Forecasts and Financial Summary
– Initial Design
– Timeline
and the result ………
Ready to be engineered …..Ready to be engineered …..
Good to Go ….
DB … FunTabStick - Product Manager
FunTabStick’s Program Manager
Project Manager -
DesignSupplier Manager
Design
Project Manager -
Mechanical
Project Manager –Software and Electronics
Project Manager -
Hardware
Project Manager -
Acoustic
• Product Manager has no reporting/Direct
people Management
• But he needs to be good with people ☺
• Product Manager closely works with
Program Manager, who controls the
program
Engineering and Validation
• The following steps are done post panel approval
– Design Freeze
– Choosing Supplier and fixing the cost (FOB)
• Maintain less deviation with Target FOB and actual• Maintain less deviation with Target FOB and actual
– Sample Testing (Usability, Customer context etc)
– Engineering
• Many times the Product Manager needs to get
involved in every aspect of design and
engineering
Product Manager Involvement
• Many times the requirements Vs Cost do notmatch the FOB which suppliers quoted
• Product Manager has to pitch in andsacrifice/compromise some requirement,sacrifice/compromise some requirement,color, material or finish
• This is to maintain the cost (target FOB) onwhich the entire business validation is based
• Engineering cycle is the most time consumingand has loads of risks
Sensitive Engineering
• Many times the cost gets added up in
engineering cycle (as effort spent)
• Compromise occurs in engineering phase
• This phase has to be tracked very closely -• This phase has to be tracked very closely -
excess, unplanned effort can increase the
project cost and thus reflect on Margin $’s
• Involve at every stage global teams and keep
them posted on Product Development
What after you engineered?
• Verify the entire product
• Trigger QA teams for best quality
• Ask for the final commitment on volume
forecasts from Global teamsforecasts from Global teams
• Modify financial summary (if any change has
occurred in FOB, program cost, forecasts etc)
• get approval from the Executive Panel for Final
Authorization for PRODUCTION
Product Marketing …
• Product is ready and ready to bemarketed and sold
• Now DB needs to pitch in asTactical Product Manager andinvolve in following– Product Positioning– Product Positioning
– Routes to Market
– Marketing Plan
– Launch Plan
– Collaterals and Sales tools
– Channel and Sale training
– CRM
Product PositioningTarget Market and Buyers Tablet Buyers
Any Competition Available None – but for portable
speakers
Existing product positioning None as this is New Me
ACowStick position Vs
Competitors
ACowStick is a highly
Differentiated and Desirable
BrandBrand
Positioning Statement “Wrap the Tablet
with Good Sound”
Wrap the tablet with good sound
Routes to Market
General Trade
Organized Trade
Apple Premium Reseller and Apple Stores
Color Variations
Bundling Opportunities –
Exclusive color variants
Marketing and Launch Plan
• Web Presence of FunTabStick– ACowStick is already a known brand the New Product
details need to be put up on web
• Blog about technology in FunTabStick used
• Digital and PR partnering• Digital and PR partnering– Reviews of FunTabStick
• Viral Videos – A Must – Usability, Design talks of FunTabStick
• Online Advertising– Catch the right customers
• Evangelism – Speaking and Briefing
Sales and Channel Training
• Training is an integral part of Productmanagement
• Channel partners need to know the USP of theproduct, its operation and the entire philosophy
• DB has to drill the passion of the product and• DB has to drill the passion of the product andinfluence the channel partners
• DB has to provide (work with his marketing team)the necessary support to all channel partners Ex:Banners, posters, Flyers, Hand outs and any othersales collateral that can help FunTabSticks sellbetter
DB’s success
• DB has successfully Conceptualized
FunTabStick for ACowStick
• DB successfully Created and Commercialized
the productthe product
• DB also successfully marketed the product
with good go to market strategy
• He also ensured an efficient presales drive
Product Manager - Profile
• CEO of Product
– Conceptualize , Create and Commercialize
– Design, Develop and Deploy
• Market KnowledgeMarket Knowledge
• Competitor knowledge
• ROI Knowledge
• Good to have relevant knowledge of technology
• Presales
• Good Marketer ….
Looking more on basic on
product management or
training – Contact metraining – Contact me
ravilakkundi(at)gmail com
Want to hire me .. feel free to contact
http://www.linkedin.com/in/ravilakkundi