The Product Manager's Handbook : The Complete Product Management Resource

302 Pages·2000·1.4 MB·English

by  Linda Gorchels

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THE
Product
Manager’s
Handbook
The Complete Product
Management Resource
second edition
Linda Gorchels
NTC Business Books
NTC/Contemporary Publishing Group
abc
McGraw-Hill
Copyright © 2000 by Linda Gorchels. All rights reserved. Manufactured in the United States of
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0-07-138989-X
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DOI: 10.1036/007138989X
Contents
Preface v
Acknowledgments ix
Part I The Role and Operation of Product
Management 1
1 The New Product Management 5
2 Introducing Product Management and Managing
Product Managers 17
3 The Cross-Functional Role of Product Managers 29
4 Product manager.com 51
Part II Planning Skills for Product Managers 65
5 The Product Marketing Planning Process 69
6 Customer Value Management 89
7 The Annual Product Plan 103
Part III Product Skills 129
8 Evaluating the Product Portfolio 133
9 Strategic Product Planning 145
10 New Products: Proposal, Development, and Launch 155
11 The Financial Side of Product Management 191
Part IV Functional Skills 199
12 Pricing Products and Services 203
13 The Product Manager as Marketing Manager 221
14 Product Management: The Final Frontier? 239
Appendix: Sample Job Descriptions 253
Endnotes 269
Glossary 275
Index 281
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Preface
Back to the Future
The changes I have observed in business have been dramatic since the
first edition of my book was published. The Internet was a fledgling
concept at that time and now it has become a fairly standard part of
business. Although globalization was a growing phenomenon prior to
my first edition, it has also escalated in importance.
On the other hand, there have been some constants. Through all
the turbulence, there remains a need for entrepreneurial spirit, for an
ability to work with and through other people, and for a clear and
focused direction. These are the characteristics of a product manager
acting as the general manager of a “virtual company.”
Product management has long been viewed as one of the more
effective organizational forms for multiproduct firms. The advantages
are numerous and frequently documented. First, it provides a dedicated
champion for a product, brand, or service. Second, a healthy internal
competitive environment can be created. Third, by championing a
number of offerings, a firm can more quickly respond to shifting cus-
tomer loyalties. And, finally, an opportunity is provided to readily
assess candidates for promotion to higher management levels.
v
vi • The Product Manager’s Handbook
Nevertheless, the effectiveness of product management is contin-
gent upon several factors. If we expect product managers to truly
champion brands, they must be engaged in both day-to-day decision
issues and in developing the strategic future paths of their offerings.
Although some companies have created a hierarchical product man-
agement structure to do this, effective product management in the
future will result from a horizontal decision-making process. Product
managers will play a major role in most product-related decisions,
while relying on specialists to carry out many of those decisions. The
emphasis will be on matching customer needs with corporate capabil-
ities through the development of specific products and services.
Now, to introduce the second edition, I’d like to use the contem-
porary format (often used in website design) of frequently asked ques-
tions (FAQs).
Frequently Asked Questions (FAQs)
What is a product manager?
A product manager is typically a middle manager charged with man-
aging and marketing existing products (and developing new products)
for a given product line, brand, or service. Other job titles could include
brand manager, industry manager, or customer segment manager.
(Note that the term product will refer to both products and services.)
What types of companies use product managers?
Product managers are used in all types of companies from consumer
packaged goods to services (such as financial institutions) to industrial
companies (such as original equipment manufacturers (OEMs), com-
ponent suppliers, and after-market firms) to nonprofit organizations
(such as hospitals).
What’s the difference between product management and
product development?
Product management is the holistic job of product managers, includ-
ing planning, forecasting, and marketing products or services. Product
development is a corporate process of designing and commercializing
new products. This book focuses on product management.
Preface • vii
Who should read this book?
This book is targeted most directly at existing product managers and
customer segment managers (primarily in “nontraditional” roles beyond
consumer packaged goods). However, it has been used effectively by
people in all types of companies and industries. Many new product
managers and directors or vice presidents of product management or
marketing have found it valuable as well.
What will I learn by reading this book?
You’ll learn about different approaches to product management from
different types of organizations, as well as ideas for getting work done
through other functional areas. You’ll learn how to develop annual
marketing plans for your products and services, with a special empha-
sis on enhancing customer loyalty and profitability. You’ll learn how to
strategically evaluate your product portfolio, walk through a typical
corporate development process, and prepare for effective launch strate-
gies. And finally, you’ll learn various ways to add perceived value both
to your product and to your effectiveness as a product manger.
How will I learn these skills?
Several techniques have been used to help you in the learning process:
(1) real-world cases showing product management in action, (2) hands-
on worksheets for the planning process, and (3) checklists at the end
of each chapter for evaluating progress at every critical stage. In addi-
tion, this edition has new chapters on the impact of technology on
product managers (Chapter 4), customer value management (Chapter
6), and the financial side of product management (Chapter 11).
What feedback did you receive on the first edition?
A review published in the July 1997 issue of the Journal of Product
Innovation Management stated
This book is a handy broad-based reference guide describing all
aspects of the product management function and relating them to the
contemporary and turbulent business climate. . . . It provides a real-
istic overview of the many roles product managers play and it exam-
ines, in an organized fashion, a variety of management tools which
may be employed to maximize the value of the product manager.
viii • The Product Manager’s Handbook
The book is valuable because it provides theoretic frameworks [for]
identifying, analyzing, and managing product lines while supporting
those approaches with relevant and recognizable case studies to
clearly illustrate the points being made.1
A customer review from Amazon.com stated:
Product Management is one of those jobs that is different for each
product manager; what it is depends on your product and what you
make of it. The danger is that when you write about product man-
agement, you focus on your specific experience. I found this book to
be general enough to be of interest to many; still it was not so high-
level that it did not provide any help. I would recommend this book
to everyone who thinks about product management as a next career.
I would also recommend it to those who have been in product man-
agement for several years, and just want to read what others think
about it.
In addition, since the book has been used as part of an executive
education program sponsored by the School of Business at the Univer-
sity of Wisconsin−Madison, it has been reviewed by hundreds of prod-
uct managers and has received high marks for practicality and usefulness.
Is the book available internationally?
Yes, the book has had increasing international sales and the first edi-
tion was translated into Spanish.