Product Management - Basics

1. Author - Ravi Lakkundi

2. 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)
• Learning by Example
Continue if you are NEW to Product Management ….

3. 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 of
the product lifecycle (wikipedia)
• Comprising of Product Development and
Product Marketing

4. One who manages the Product is a
Product manager !! ;)

5. Product Manager - Definition
• Product Manager is CEO of a Product
ABCAB
Analysis – Market Analysis
Business – Business Commitment (Money-Money-Money)
Customer – 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/other
benefits for an organization and develops that offering/product for
the organization and further manages that offering throughout its
lifecycle

6. Product Manager
Strategic/UpStream
Product Manager
Tactical/DownStream
Product Manager
Product marketing
and Lifecycle
Management
Concept
Create
Commercialize
Product Positioning
Routes to Market
Marketing Plan
Launch Plan
Collaterals and Sales
Pre-sales
Promotion
Channel and Sales Training
Evangelism
CRM

7. New Product Development/Introduction
Philosophy
•
•
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•
•
•
•
•
•
•
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
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 ……

8. Best Approach to learning
Lets take a hypothetical company
• Company Name – ACowStick Pvt Ltd
• ACowStick Portfolio – Multimedia Speaker
Manufacturers
• ACowStick Market Share – Growing Linear
• ACowStick Mind Share - Significant

9. Story Buildup …
• ACowStick visioning to become a leader in
consumer electronics industry intends to
strengthen
its
product
portfolio
of
Multimedia/Desktop Speakers
• ACowStick has a great set of engineers and its
products are valued for their engineering, Design
and are sold world wide
• ACowStick is eyeing the emerging Markets for
expanding business and needs to make products
which fit the demographic more accurately

10. Product Manager – Mr. DB …..
• ACowStick has Mr. DB as their
star Product Manager
• Mr. DB sets out for scouting the
market to find out opportunities
where he can grow the company
business and expand the product
portfolio
Ideas for new product development can emerge from any
place – Either by Market research, Competitor info etc

11. 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
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

12. 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 alone
• The Market research firm gives DB some
graphs on trends, sales, units etc etc

13. 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
tablets
- 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

14. • 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
entertainment
SAMPLE DATA – May be irrelevant
Making a valid business case / Market Trends

15. 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
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

16. The Accessories Market - Continued
• DB figures out the accessory portable speaker
market worldwide is around 20 billion !!
• Tablet covers accessory itself is around 2 Billion !!
• DB figures out a big potential for a “Killer Tablet
accessory” and he knows that ACowStick is a very
popular and is a desirable Brand
• Now what he needs is either a highly acceptable
product “A Me too product” or a “disruptive
technology product (New Me)” and take some
risk with market acceptability
Making a valid business case / Market Trends

17. 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 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

18. Target
Make Something New – Out of the Box
Accessory – A Speaker for Tablets
Product to have
Customer Context
Product to be
structurally correct
and be usable
Customers want good
product .. good sounding …
new and fresh
&^&^%$#*&^%$%
#^%&^%*((*^*&^

19. Conceptualize …….
• He decides to make a
speaker for tablets that is
unique
• It is a part of the tablet cover
or can act as a tablet cover
• Can flap open or close when
required
• And not to forget sounds
awesome !!

20. The First Look ….
A Tablet Cover with foldable
Speaker Attached to it !!
• DB slowly builds up the idea
• He contemplates – This is more
usable than a portable speaker
• A speaker system is difficult for
customers to carry
• Any thing that is not a part of
the system becomes an
accessory
• This
particular
idea
is
something different – An
accessory in principle but
practically not an accessory !!

21. 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 designer
Mr. Stu and makes sure he
gets the idea. Post analyzing
the idea Mr. Stu comes up
with a rough rendering of
the product concept
• DB does not spend much
time in designing since he
does not still know what his
stakeholders have to say
about the idea in general

22. Rendering …. Draft
When Open
When Close

23. Tablet with Cover (Speaker flaps open)

24. 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
develops a product line and how product will
work
•

25. working …
• The user will use the FunTabStick and slide in the
Tablet (FunTabstick actually is a cover with speakers)
• The user will flip open the FunTabStick speaker on sides
and they will be connected by innovative mechanism
• Once the user slides in the tablet the tablet will
automatically pair (Through NFC etc) with the
FunTabStick cover and the speakers will start playing
the media audio (Bluetooth)
• Needless to say FunTabStick is a Powered cover with LiIon Batteries (Smartly packed with Speakers)

26. 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
shows that 40% customers are willing to pay
20% of the tablet cost for a product like
FunTabStick)

27. 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 WorldOne Price)
$39
$49
$44
$54

28. This will help to concretely
justify the Target Retail Price ,
features and benefits over
competition

29. Fund Raising and Approvals ….
• Once DB is confident on his idea and the feasibility
of the product. He presents his work in a concise
Product Concept Document and presents to a
approval committee in ACowStick
The Executive committee decides (Based on
their 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 …

30. Return On Investment
• With a few more rendering of all the
FunTabStick version DB now works with a
procurement team and finds a supplier based
out of China who can help him build such a
product
• DB is smart and has already spoken to an
taken in confidence his local engineering team
that the product is feasible in design and
sound quality

31. The Suppliers - ODM
• DB gets the quote from 3 trusted suppliers
FunTabStick7
FunTabStick10
iFunTabStick
Mini
iFunTabStick
Supplier 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

32. 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 check
FunTabStick7
Target FOB
FunTabStick10
iFunTabStick
Mini
iFunTabStick
$ 21.4
$25.7
$23
$36
FOB – In Short Supplier will provide the packaged goods at the nearest port of
export/warehouse

33. Return On Investment
• DB now discusses his new concept product with
global teams (Sales and Marketing) and gets their
consent
• He shares them his concept document and
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 is
ever developed what would be projected
volumes annually …
For ROI DB has to work with finance management team of ACowStick

34. 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 !!!
and some feel the product wont sell in their
market

35. 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

36. ROI Calculation
Model
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

37. 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

38. ROI Calculation – Example (India & US)
• Price for FunTabStick – 7: $39
• Assuming a 2 level channel (worldwide) for
go-to-market
– Distributor
– Dealer/Retailer
• Lets take two example countries
– USA
– India

39. Reading the slide ROI
FunTabStick 7
INDIA
12 month
forecasts
20000
USA
RUSSIA
CHINA
50000
5000
15000
EUROPE
BRAZIL
40000
2000
FOB
Landed Cost
Distributor Price
MSRP/MRP in USD
Revenue
Margin
Margin $
$21.4
$27.9
$29.3
$39
$585,366
5%
$29,268
$21.4
$24.0
$28.7
$39
$1,433,500
19%
$272,365
$21.4
$21.4
$21.4
$21.4
FILL DATA HERE
Total: $ 6,013,610
Average: 12%
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)
$12,000
$50,000
$350,000
$8,000
Total:
$721,633

40. The Day of Approvals …
• 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 ………

41. Ready to be engineered …..
Good to Go ….

42. DB … FunTabStick -
Product Manager
FunTabStick’s Program Manager
Project Manager Design
Project Manager Mechanical
Project Manager –
Software and Electronics
Project Manager Hardware
Project Manager Acoustic
Supplier Manager
• 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

43. 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
– Sample Testing (Usability, Customer context etc)
– Engineering
• Many times the Product Manager needs to get
involved in every aspect of design and
engineering

44. Product Manager Involvement
• Many times the requirements Vs Cost do not
match the FOB which suppliers quoted
• Product Manager has to pitch in and
sacrifice/compromise some requirement,
color, material or finish
• This is to maintain the cost (target FOB) on
which the entire business validation is based
• Engineering cycle is the most time consuming
and has loads of risks

45. 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 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

46. What after you engineered?
• Verify the entire product
• Trigger QA teams for best quality
• Ask for the final commitment on volume
forecasts 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

47. Product Marketing …
• Product is ready and ready to be
marketed and sold
• Now DB needs to pitch in as
Tactical Product Manager and
involve in following
–
–
–
–
–
–
–
Product Positioning
Routes to Market
Marketing Plan
Launch Plan
Collaterals and Sales tools
Channel and Sale training
CRM

48. Product Positioning
Target 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
Brand
Positioning Statement
“Wrap the Tablet
with Good Sound”
Wrap the tablet with good sound

49. Routes to Market
General Trade
Organized Trade
Apple Premium Reseller and Apple Stores
Color Variations
Bundling Opportunities –
Exclusive color variants

50. 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
– Reviews of FunTabStick
• Viral Videos – A Must
– Usability, Design talks of FunTabStick
• Online Advertising
– Catch the right customers
• Evangelism – Speaking and Briefing

51. Sales and Channel Training
• Training is an integral part of Product
management
• Channel partners need to know the USP of the
product, its operation and the entire philosophy
• DB has to drill the passion of the product and
influence 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 other
sales collateral that can help FunTabSticks sell
better

52. DB’s success
• DB has successfully Conceptualized
FunTabStick for ACowStick
• DB successfully Created and Commercialized
the product
• DB also successfully marketed the product
with good go to market strategy
• He also ensured an efficient presales drive

53. Product Manager - Profile
• CEO of Product
– Conceptualize , Create and Commercialize
– Design, Develop and Deploy
•
•
•
•
•
•
Market Knowledge
Competitor knowledge
ROI Knowledge
Good to have relevant knowledge of technology
Presales
Good Marketer ….

54. Looking more on basic on
product management or
training – Contact me
ravilakkundi(at)gmail com
Want to hire me .. feel free to contact
http://www.linkedin.com/in/ravilakkundi