Product management helps the organisation to gain a competitive advantage in the market. Product management is a five step process. The first step is the identifying customer need and then coming up with a product definition which then progresses to product development. The next step is the launch of the product and carrying out the activities so that the product enters the growth phase. In the last step, product might be discontinued because of low customer acceptance. The various stages can be further explained as follows.
Phase l:
New Product Identification: In this stage, the company tries to identify the needs of the customer and decide what configuration or features need to be incorporated in the product on a functional level. The product management department has the responsibility of identifying the needs of the customer in a systematic manner and then documenting the functions that the product should perform. Customer surveys for existing products are done by the senior members of the product management department. These surveys are used to make improvements in existing product lines. At this stage, the need gap of the consumers and their problem areas in terms of expectation mismatch also looked into. In this regard, the product management department attends various conferences and seminars on innovation and also go through several books, magazines and journals, in order to get the pulse of the consumer. These activities help a company in gaining knowledge about current trends and incorporating them into their products. several product concepts are discussed and circulated across the organisation, especially to the strategy and policy makers.
Phase 2:
Product Definition: In the next stage, the various product options/ideas identified in the first phmse are further presented and assessed. The final product to be developed is conceptualised. The various high level specifications and functionalities of the product are also determined and discussed at this stage. Such specifications are the overall featunes and functions which the consumers desire in the products, These functionalities are described in a simple manner so that their importance is easily understood by each member of the organisation. A business proposition for the product is also prepared at this stage. Such a proposition looks at many aspects like the target market segments, the market size, the investment that needs to be made to develop the product and also the likely profit that can be generated. The product management department is responsible to sell its product concept to various internal stakeholders like the departments of Finance, Human resources, R&D, etc., during this phase.
Phase 3:
Product Development: After the high level functionalities of the product are determined and all the stakeholders of the organisation agree on the same, the top management commits the necessary resources to the product development team to give shape to the final product. This team is cross functional and typically comprises departments like Manufacturing, R&D, Sales & Marketing, etc. The high level specifications and functionalities are given to this team and they are given the responsibility of developing a product which fits the criteria. An elaborate description of the product including the touch and feel aspects (like the aesthetics) is also prepared by the product development team at this stage. Various manufacturing options are also discussed. Any new technology that may be needed is presented and evaluated. The investment required to develop the product is outlined alongwith the payback period for the organisation in terms of profit. Finally, the first prototype is prepared and this is then evaluated against the functionalities that are desired by the customer.
Phase 4:
Product Launch and Growth: A lot of time and efforts have to be made for the product launch. The success or failure Of the product depends a great deal on this Stage of the new product development. It is not sufficient just to develop a product, a lot of planning and thought is also required on how the product is launched and marketed to the target audience. The product management department is well aware of the target segment of the product and also the product positioning theme that has been developed. The advertising campaign needs to be finalised. The distributors and the sales team need to have an idea about the USPs of the product and the related competition in the market, the customers also need to be aware of the benefits that the product offers and how it is better than other products in the market. The company should take feedback from the consumer on various features that have been offered and if any improvement needs to be done in the product offering. This practice will help the company in dealing with the competitors.
Phase 5:
Product Discontinuation: This stage is very critical in the product development cycle. In this stage, the organisation has to take the difficult decision of discontinuing a product and launching a new product in its place. This is a double-edged sword. The organisation has to withdraw a product which has been in the market for a long time and has established a certain loyal clientele. On the other hand, it has to launch a new product and convince the customers about its benefits and superior offerings. It can be a huge complication for the organisation if the old product gets withdrawn and the new one has no takers in the market. As a result, the organisation can also lose market share to the other competing firms who can sense a certain weakness in the company’s portfolio. The main decisions that are required to be made at this stage are as follows:
- Availability of a New Product: Availability is a very important decision in the introduction of a new product.
- Awareness of the Competitor’s Products: The firm also needs to keep a close watch on the competition in the marketplace. A new product launch can Often be a counter to What the competition has done in the market.
- Customer Maturity: The maturity or readiness of the customer is also a factor. The product may be ahead of its time, i.e., the concept may not be well established in the marketplace.
- Adequate Training: The staff of the organisation needs to be given adequate training before an existing product is discontinued and a new product is launched.
- Adequate Stock: Sufficient stock of the product needs to be available so that when the consumer demand arises, the same can be satisfied. If not, there can be stock-outs and sales orders may be lost.