Product and Service Management (recurring activities to manage a product or service)Written by Carter McNamara, MBA, PhD, Authenticity Consulting, LLC. Copyright 1997-2007.
Adapted from the Field Guide to Nonprofit Program Design, Marketing and Evaluation.Product (or service) management includes a wide range of management activities, ranging from the time that there’s a new idea for a product to eventually providing ongoing support to customers who have purchased the new product. Every organization conducts product management, whether it’s done intentionally or unintentionally.This module provides a wide overview of considerations in developing and managing a product. How a product is developed or managed is depends very much on the nature of the organization and its products, for example, retail, manufacturing, wholesale, etc. Note that different people might even have different categorizations for the activities described below.NOTE: Nonprofit organizations often provide services in the form of “programs”, rather than “products” — although the services from the programs are certainly “products” to groups of clients. Therefore, readers from nonprofit organizations might be better served to read the following guide:
Basic Guidelines for Nonprofit Program Design and MarketingSections of This Topic Include:Basic Introduction to Product Management
Approaches to Developing Products and Services
Product Idea
(Are You Planning a New Business Around Your New Idea?)
Product Evaluation — Can Your Idea Become a Viable Product orService?
Product Development — Building Your Product or Service
Product Production — Ongoing Building of Products or Services
Product Distribution, Advertising and Promotion, Sales and Service
Basics Introduction to Product ManagementBusinesses can generate revenue from selling more of the current products to more of the current customers (customer maximization), more of the current products to new customers (customer development), new products to current customers (product development), or new products to new customers (diversification).To Broaden Your Perspective on Product ManagementMany of the activities in product management are also activities in the overall process of marketing.
Basics of Marketing (from idea to evaluating to developing to producing)
Life Cycle Planning (everything has a life cycle, including products)Broaden Your Perspective Even More?( Or If You Need an Investor or Funder)If the reader is highly motivated at this point, then he or she might scan the information about the basics of business planning. Business planning is usually conducted when starting a new organization or a new major venture, for example, new product, service or program. Essentially, a business plan is a combination of a marketing plan, strategic plan, operational/management plan and a financial plan. Funders or investors usually require a business plan. Far more important than the plan document, is the planning process itself.
Basics of Business PlanningApproaches to Developing Products and ServicesThere are five different approaches that people use to develop a product or service. The following article provides an overview of each of the methods.
Approaches to Developing Products and ServicesIdea for New Product or ServiceSources of IdeasAt this stage, someone has an idea for a new product or service. Ideas can come from many sources, for example:
1. Complaints from current customers (see Customer Service and Customer Satisfaction)
2. Requests for Proposals from large businesses, government agencies, etc.
3. Modifications to current products (see Innovation)
4. Suggestions from employees, customers, suppliers, etc. (see Creative Thinking)Also see How to Find a Product to Market (short, reflective piece on developing an idea)Protecting Your IdeasIt’s likely that someone else will think your idea is a good one, too! Therefore, it’s important to protect your idea as much as possible, for example, by getting copyrights, trademarks or patents. See U.S. Intellectual Property LawYou may want to “package” your product with others, or sell your new product as a set of products. The following link might help you in this consideration.
Naming and Branding
Intellectual PropertyYou might also want to minimize the chance of an employee taking the idea and starting their own business. See
Non-Compete AgreementsAre You Planning a New Business Around Your Idea?If you are planning to start a new for-profit business or nonprofit business around your idea for a new product or service, then you will benefit from reading information in the topics Starting a For-Profit Business or Starting a Nonprofit Organization. Note that information in these two topics will guide you through assessing the feasibility of your new business — information in the rest of this topic about product management will include assessing the feasibility of developing a new product. It’s likely that if you are starting a new business, you will eventually need information in the rest of this topic about product management.Product Evaluation — Can Your Idea Become a Viable Product/Service?You Need More than a Good IdeaJust because it seems like a great idea doesn’t mean that it can become a product. A viable product needs to be profitable (or, in the case of a nonprofit, at least sustainable), including being producible and marketable. Also, the product should be related to the purpose, or mission, of your business. Businesses can go bankrupt by trying to be too many things to too many customers, rather than doing a few things very well.If You Need an Investor or Funder for Your IdeaFor-profits that need investment money will benefit from the following link.
Fundraising (For-Profit)Nonprofits that need funding will benefit from the following link.
Fundraising (Nonprofit)As noted above, you very well may need a business plan to convince the investor or funder that your idea is viable to become or product or service. See Basics of Business PlanningVerifying that Your Idea Can Become a Good Product or ServiceAt this point, you will benefit from understanding the basics of marketing, particularly how to conduct market research and a competitive analysis. If your idea still seems like a good one, then it’s important to know how you will position and identify your new product to the market. You’ll certainly want to know how much you might charge for it (that is, its price to the customer). The following links will guide you through these considerations.
Marketing Research (is there a need for your new product? by whom? how do they want it?)
Competitive Analysis (who are your competitors? what are they selling? can you compete?)
Pricing (how to come up with a price, based on development costs, etc.)If you plan to promote, sell and/or distribute products over the Internet, you’ll want to review information in the topic E-Commerce.Product Development (Building Your Product or Service)At this point, you’ve concluded that your idea can become a viable product. Now you’re faced with actually building the product itself. The particular process you use to build your product or service depend very much on the nature of the product or service. The following links might help you as you develop your unique process to build your product.You certainly should develop and implement a project plan to build your product.
Project Planning (method to carefully plan and track development of the product/service)You should seriously think about developing and implementing a project plan to build your product.
Operations Management (wide variety of practices to build your product)Businesses are coming to learn that it’s never too early to integrate principles of quality management into the design and development of products and services.
Basics About Quality ManagementProduct Production — Ongoing Building of Products and ServicesAgain, the particular processes you use repeatedly to produce your products and services depend very much on the nature of your product or service. The following links will help you to develop the new product or service, including regularly tracking how many versions you have produced.
Control Function of Management (variety of ongoing management activities to coordinate operations)
Basics About Quality Management
Operations Management (wide variety of activities in regard to overall operations of organization)
Configuration Management (tracking the various new versions of the products and services)Product Distribution, Advertising and Promotion, Sales and ServiceThere are several major methods you can use to get your products or services to your customers or clients. The following link will help you select the most appropriate method(s).
DistributionAdvertising and promotion of products and services are often some of the most under-rated activities by new business owners. Many people strongly believe that if they build it, buyers will come. In this increasingly expanding and competitive marketplace, you must ensure your products and services are prominently in the minds of your customers and clients. This requires ongoing advertising and promotion.
Advertising and PromotionEven if your products and services are prominently in the minds of your customers and clients, you need to facilitate the process of their buying (or, sometimes in the case of nonprofits, using) your products and services. This often requires cultivating an ongoing relationship with customers and clients to understand their needs, explain how your products and services can meet those needs, and facilitate the “closing” of the sale, that is, where they sign “on the dotted line”.
SalesCustomers are increasingly knowledgeable and intelligent in their buying habits. Depending on the nature of the product or service, a warranty (or promise of ongoing repair and/or support for some period of time) can greatly reassure customers when considering the purchase of your products.
WarrantiesNot only can high-quality customer service earn a strong reputation for your business and products, it can also support continued purchases and revenue (and even new ideas for new products and services) from current customers.
Customer Service
All of the product management activities so far come down to achieving one, ongoing major outcome:
Customer Satisfaction
# Source: http://www.managementhelp.org/prod_mng/prod_mng.htm
Business 2.0 