The primary function of product management is to place a person or team in control of the activities, growth, and profitability of individual products. By concentrating responsibility in one person, it limits the adverse effects of competing influences within the corporation on product success. Many times the sales, manufacturing, or financial control departments are so caught up in their own activities and responsibilities that they lose sight of what is best for the company's products. It is the responsibility of product management to combine the diverse interests and resources of all corporate departments in such a way that each works toward the continued growth and profitability of all of the company's products. The product manager is a gatherer, a disseminator, and user of information from diverse corporate departments, including sales, market research, manufacturing, legal, advertising, and product research and development.
While product managers work with all functional areas in a corporation, they do not generally have line authority over any of them. Because they act as liaisons, they often do not have authority commensurate with their responsibilities: the functional sections work in support of the corporation in its entirety, not for any one product manager.
The Product Manager's Job: Functions and Responsibilities
A product manager has general responsibility for all matters related to his or her specified products or brands. In this way product managers champion their brands. Product managers are especially important for small or introductory brands, as they make sure that corporate resources are obtained to facilitate growth. Without the efforts of dedicated product managers vitally interested in their product's success, many new products could be failures before they were given adequate market opportunity to prove themselves.
Product managers are concerned with everything relating to their brand: How it is made, distributed, packaged, promoted and sold. It is the product manager's job to combine and manage all of these factors. He or she must divide attention between planning for the brand's future, implementing present brand activities, and analyzing past brand achievements. Below we discuss these three activities.
PLANNING
Central to the planning process is the development of an overall brand strategy. The prime elements in the product manager's strategic planning are the "four P's": the product itself, price, places for distribution, and promotion. As a product manager, it would be your task to find the right combination of these elements in order to get the highest consumer acceptance and the greatest profits for the corporation.
You would need frequently to look at the brand with a fresh eye. Is it what consumers want? Does it do what it's supposed to do? Is it the right shape, color, size? How can it be improved? Using consumer and wholesale trade feedback gathered from market research and sales data, you would work with the research and development department to see how you can make the brand better. Often, when one sees a brand in a supermarket with a "New and Improved" label on it, one sees the results of this process.
As a product manager, you would have control over the price of your brands. Price can be a large factor in a brand's success. If a brand's price is not competitive with similar products on the market, you run the risk of losing customers to lower-priced brands. But if a brand is priced too low, consumers may feel the product is inferior in quality, and may not purchase it Studies are often conducted on the price elasticity of brands to determine whether increases or decreases would adversely affect sales, market share, and profits.
Distribution is crucial to a product's success. With a new product, you must develop a distribution system from scratch. Many factors have to be taken into consideration, such as cost, timing, and efficiency. You must ask if existing methods used for other products are adequate, or if new methods should be tested, such as using independent wholesalers, jobbers, or direct mail. Problems with retail shelf space must also be addressed. Will retailers buy and stock the brand? Will its shape or size present problems?
The product manager must also consider whether a new product will meet with the sales force's acceptance. A corporation's sales force is responsible for all of its products, but salespeople tend to concentrate on selling the products that bring them the highest sales results-the ones that virtually sell themselves. Salespeople may feel they are overloaded with products to sell, and as a result you may find that your brand is not being effectively pushed. Product managers often work closely with the sales force to make sure their products are receiving adequate attention and proper distribution.
Promotion is another aspect of product strategy implementation. It is concerned with many areas, from packaging decisions to special sales promotions to retail displays to advertising.
Product Managers work with designers-within the corporation, at an advertising agency, or at package-design firms-to design brand logos and packaging that will meet with high consumer acceptance at reasonable cost Packaging must be effective in design, aesthetically appealing, eye-catching, and in keeping with the image desired for the brand. It must also be convenient in shape and size. Packaging and logo changes are treated with extreme care by product managers, as there is always a danger of consumer confusion and loss of sales if changes are too dramatic or frequent.
Product managers may develop special promotions to support their brands. Many products that are seasonal in nature, such as certain items of sports equipment or food products can have promotions associated with different times of the year to extend the product's use or even out seasonal sales. Promotions are also used to improve sales in weak markets or to support new products. Promotions can be in a variety of forms, from cents-off coupons to free trials to sweepstakes giveaways. Each promotion is planned by the product manager with help from the company's advertising agency or a separate promotions house.
Advertising is usually the largest part of promotion planning. As a product manager, you would work in tandem with account management representatives from your advertising agency to develop overall advertising strategies for the brand. This involves creative development, media planning, and advertising research analysis. Product managers spend considerable time with their counterparts at advertising agencies, both over the phone and in meetings.
In addition to the strategic planning associated with the product's physical characteristics, price, distribution, and promotion, you would be responsible for overall product financial planning, the profitability of your brands, and related revenues and expenses. Entry-level product management personnel usually prepare annual brand budgets showing expenditures planned for promotions, advertising, product changes, and how they fit in with sales forecasts. Substantial time is spent forecasting revenue figures and developing budgets. Once they are finalized within the product group, they must be approved by top management.
The goal of this financial analysis is the preparation of an annual marketing plan to show the strategic positioning deemed best for the brand in terms of product formulation, distribution, pricing, and promotion. The plan identifies what promotions and advertising are planned and when-and what product and packaging changes are planned. Expenses and expected revenues are grouped with these activities, and profits are projected. The marketing plan will guide the activities of the product manager throughout the year.
IMPLEMENTATION
Once annual budgets and marketing plans have been approved by upper management, the product manager must implement the planned activities. This involves giving continual attention to many simultaneously occurring projects to ensure that all are running smoothly.
Implementation often involves frequent interaction with the sales force. Product managers go on "store checks" and sales calls with salespeople to learn about the brand's retail position firsthand, to see how promotions are being received, and to get an idea of how the sales force feels about the brand and the promotions behind it. Store checks help in assessing how well the implementation of the plan is going.
As a product manager you would also have formal meetings with the sales force to introduce them to new products, changes in packaging or new advertising campaigns. These may be elaborate affairs with displays, charts, graphs, and commercials-everything shown to its best advantage to the salespeople. Because they sell brands of other product managers as well, you must compete with those product managers to make sure your brand receives good service from the sales force.
In implementing advertising plans, you would travel to locations with advertising agency personnel to supervise the making of television and radio commercials or print advertisements. You must make sure at the production site that agreed-on strategies are being executed, and that the brand's packaging and logo are being clearly and tastefully communicated.
Plans can change many times throughout the year, and you will find yourself making adjustments and adaptations as necessary. Budgets spectrum of training possibilities exists-from sink-or-swim situations to gentle supervision to formal training programs.
The new recruit remains an assistant from one year to eighteen months before moving up to associate product manager. Another year or eighteen months later he or she may become product manager. (These are only general guidelines: Promotion may take two years between levels at one company, eight months somewhere else.) These developmental periods are affected by the number of positions open, how well the firm is doing, and the individual's past work experience and performance.
Many leave product management after several years to become involved in entrepreneurial endeavors, other facets of marketing, upper management, consulting, direct response marketing, service areas (e.g., financial services), or small companies where they can run things instead of getting bogged down in the red tape of a large organization's bureaucracy. While there is certainly upward mobility for effective product managers, bottlenecks do form in the corporate pyramid structure. Therefore some choose to make a lateral or upward move to another company. It is generally considered acceptable to have a resume reflecting several well-planned moves; job-hopping with no clear pattern of career advancement is often questioned.
CAREER MOBILITY AND LIFESTYLE
Great demands are placed on the time, attention, resources, and energy of product managers. If a choice must be made between completing a report on time and keeping a dinner date, the report generally wins. While many product managers have fairly regular hours, there is generally a get-the-work-done ethic as opposed to a 9:00-to-5:00 work one. Still, there is variance: Some managers refuse to take work home at night or on weekends and are quite successful; others stay until 8:00 every night. Much of the work at the office is done in teams, with the product manager assuming the leadership role; work to be done alone gets pushed to before 9:00 AM or after 6:00 PM. Internal atmosphere, pressure, support, and competition vary widely from company to company. Work hours are a function of both personal preference and the particular company and product group.
With few exceptions, product managers and the marketing teams with which they work tend to be young; turnover is high. One product manager has called marketing a function that "worships youth and eats it up quick."
PRODUCT MANAGEMENT OR ADVERTISING?
Many product managers have seriously considered advertising at one time or another in their career. The question whether one should choose product management over advertising account work bears discussion.
One reason for choosing product management is the exposure it gives to the whole business of marketing a product, of which advertising is but one aspect. Product managers can prepare themselves for general management through their normal on-the-job experience, developing an understanding of finance, distribution, promotion, production, packaging, marketing research, and advertising.
Greater involvement and control in decision making is also considered a reason for preferring product management. The account executive at an advertising agency is accountable to both his or her own superior and the client, while the product manager need justify decisions only to a more senior product manager.
When you choose between specialization in the advertising field or the broad exposure available in product management, remember that skills from one field are often transferable to another, should your preferences change.
Requited Skills and Educational Background
An MBA degree is usually required to enter product management today. While the degree is not essential to perform your job responsibilities, it is generally necessary in order to be hired. Opinions as to the actual value of the education received in getting the degree range from "worthless, irrelevant, totally removed from the real world" to "extremely helpful in teaching the buzzwords and giving experience through case studies, which aid in developing new product strategies." Regardless of this debate, the MBA degree is often used by companies as a screening device to distinguish those with above-average intelligence, discipline, and commitment from those who are average in ability and just seeking a good, prestigious job. Some companies have separate training programs for MBAs, and expect higher performance from them compared to other recruits.
Work experience is also valued; it is not uncommon to find product managers who have transferred from the sales force, bringing practical knowledge to the job, or who have done advertising account work or sales with another company.
Perhaps the most important skill for you to have as product manager is the ability to work with, motivate, and persuade people over whom you have no authority, but upon whom you depend to get work done. You must often persuade manager’s superior in rank to provide services for your brand. A person with an overly aggressive, domineering, or pushy personality will have a difficult time getting necessary cooperation. Likewise, someone who feels rebuffed by the first refusal of a staff member will not get enough support for his or her brand.
As a product manager you must be able to deal effectively with conflict. Much of the work you will try to get support staff to do will be contrary to their immediate, short-term interests. For instance, a product manager on a new product wants the finance department to support it with a lot of money, while the finance department wants to spend resources only on proven successes. Another example of inherent conflict occurs between product management and production personnel. The product manager wants to time the production of brands around consumer demand cycles, while production people want to produce on a steady, continuous basis to save money.
Persuasive skills are another attribute necessary for success in product management. Product managers often act as entrepreneurs, and look at top management as investors in their entrepreneurial endeavors. As a product manager you must be able to sell top management on your ideas in order to get the resources necessary to build your brands. In this process, you are competing against other product managers for limited resources. A competitive spirit will help make you the victor.
Product management is very demanding in terms of hours and energy. You must be aggressive and dedicated, and have enough stamina to stick to it. Ambition is another quality found in successful product managers; there should be desire and ability to contribute to and participate in top-management decision making.
As a product manager, you would be a marketing generalist. Therefore you must have a solid, general knowledge of the subject. You must also come to know the brands you manage inside and out-as well as their consumers. You must not be so theoretically oriented that you are out of touch with the consumer buying the product.
High intelligence is generally considered a prerequisite for success in product management. The field attracts bright, active young people, and you must be able to keep up. Analytical skills are especially important. You will be faced with extensive information on the job, and must be able to identify key factors which can determine results. Much of this work involves quantitative analysis, so being able to work comfortably with numbers is important. You must be able to handle a great amount of detail and must have a fine sense of priorities. During a product promotion, you will be at the center of activities and must direct effectively. You must also be able to react appropriately and effectively when problems arise; overreaction creates more problems than it solves.
Product managers need to understand and accept the corporate structure in which they work. You must know who does what, who makes decisions, and what are standard operating procedures. At the same time, however, you will have to be innovative and creative in your job. Sometimes innovation is the best way to get results, and you must be strong enough to back up your opinions with action.
A cooperative spirit is necessary in product management. You work with people all day long-supervisors, subordinates, colleagues, advertising agency personnel, and other suppliers' personnel-so you must be flexible and patient. This work requires a team effort in order to succeed, and all the individuals involved must be willing and able to participate in the effort.
