MARKET CENTRIC PRODUCT PLANNING

An Idea without a Market

The climate for Entrepreneurship has never been so good. You cannot help but notice the explosion in innovation, as the free flow of thought is no longer hemmed in by geographical or other constraints.

In the last decade, the way emerging economies have flourished has demonstrated that:

  • Path breaking disruptive technologies can spring up anywhere
  • In this knowledge economy, innovation is the only path to pursue all progressive countries and firms, irrespective of size or sector.

Yet, for all the talk of innovation, very few ideas actually make a mark in our lives. Industry wisdom (across several sectors), has it that only 5 to 10% of new products survive for over a year, i.e. a failure rate of 90 to 95%! It is even more challenging when it comes to “Technology Products” because of technology changes so quickly that competitors can and do leave one another behind in the race to the top. Technology users too have become more demanding and discerning.

Pursuing an idea costs an enormous amount of time and money, which you could have invested elsewhere. Considering the failure rate of new ideas and the opportunity cost of those resources, you need to ask yourself if you are leading your company to an idea with no market!

How do I evaluate and identify a good idea that deserves investment and will gain customer confidence and lead to commercial success?

Ideation takes many forms

Most Product ideas can be classified into five major categories depending on how they have originated. The market, Consumer, Competition, Technology and Disruption are the five driving forces for an idea.

A Market Centric idea or innovation stems from a problem and a felt “Need”. It takes into account all four vital aspects – consumer, competition, technology and differentiation, since it meets a consumer need, keeps competitive advances in mind, uses technology to meet customer needs and creates differentiation in the process.

From a Product Management angle, it means spot‐on and rigorous planning to integrate all these aspects, which is the most vital process for the success of any Global Product. A focused product management approach allows companies to deliver the right product to the right audience at the right time. It minimises the scope of trial and error and the consequent wastage of resources.

Being Market Centric

Being market-centric involves being aware of the many players in the market ecosystem such as potential Customers, Industry veterans, Thought leaders, Competition, Buyers, Users, Analysts, Feedback Forums, Specialist Reviewers, Domain Experts and Internal team members who help to decipher the problem space and define a Market Need. The amount of quality effort and time spent at this stage proportionately defines the success of the Product.

However a word of caution, it is important to be sensitive to the “time to market” aspect and avoid parking a good idea on the drawing board for too long. Every idea is bound to become stale very soon or even be picked up by competition.

The Route to Sustainable Success

A Little planning and a features-based approach result in a gross mismatch between your offer and customer expectations. Endless planning, on the other hand, may mean that you miss the bus. Besides, customer needs and the market are not static. You need a 3600 approach that gives you a wide-angle view of the market as it changes and allows you to plan in a flexible manner.

Don’t let your “killer” idea fall by the wayside; the route to success is by simply focusing the right audience, at the right moment, in the right manner. Adopting a holistic, yet time-bound product planning approach ensures that when only a very small percentage of new ideas succeed, yours is one of them!

 

Why Competitors’ Strategy may not work for you?

Businesses often make the mistake of either over-estimating the efficacy of competitors’ marketing strategies or emulating them without really understanding the reasons for their success. For product managers, an important part of the product planning process is understanding the total market environment in which customer needs are being served by competing products too.

Understanding should not, however, mean imitation.

There are a number of reasons why the strategy of even the most successful competing product may not work for yours.

Different objectives. If one product aims to go global within a year of launch while the other wants to consolidate in one large market and achieve profitability first, can their strategies be similar? For instance, in the highly competitive gaming industry, Sony’s strategy has been to bundle console games with their Blu-ray optical drives, thus encouraging price sensitive customers to purchase the PS3. However, Nintendo’s strategy is altogether different – it has created a console and games that appeal to ‘casual gamers’ who were ignored by Microsoft and Sony (which appeal to hardcore gamers.) If Nintendo were to copy Sony and Microsoft and target the hardcore gamers, it has little chances of success since its gaming console is much simpler and would not fit their preferences.

Cause and effect. The successes that you see in the market may not necessarily be the result of the strategy that your competitor discusses publicly. For instance, some products sell in large numbers at heavily discounted prices, but the success may be attributed to entry into a new market or identifying new features with high customer appeal; the real reason is not evident until much later when the financials are published.

It is important to identify the real reasons for success (or failure) by listening to customers, not competitors or media reports. Why are customers buying, or not buying?

Time of market entry. If your product fulfils a need in a completely new way, you may need to adopt ‘pioneering’ strategies such as educating customers and selling the product concept. If you are a late entrant in a crowded market, your marketing strategy will reflect that. There is no one-size-fits-all strategy or ‘golden rule’ that holds true for every situation.

Without imitating competition, there are still many valuable things one can learn from competing products, but that should be a subject for another post!

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What to look for in a Product Manager in India: From Recruiters/HR’s point of view

Note: For convenience, Product Managers will be referred to as PM. Please do not confuse them with Project Manager.

Indian Software Industry has seen an explosive growth in the recent years which has grown beyond software services. MNCs now are giving greater responsibilities to Indian operations in regards to Product Management & Requirement Management. The great Indian

Indian Software Industry has seen an explosive growth in the recent years which has grown beyond software services. MNCs now are giving greater responsibilities to Indian operations in regards to Product Management & Requirement Management. The great Indian entrepreneur ship is also in full bloom & many startups are launching new products.

 However Product Management in India is still at its nascent stage. The role definition is in experimental stage & the responsibilities are evolving. The career path for an IT product manager is not clearly defined. Recent conversation with a senior PM in a Data Storage Management MNC revealed that even the Human Resources department was not clear on the roles & responsibilities of a PM.

 Quick analysis of “Product Management” job postings in India reveals slowdown in hiring of PM.Additionally, the job description shows that they are looking for help in the areas of product design and development, and no outbound activities are really described. HR’s of the companies should first set proper policies, roles, responsibilities & career path for a PM. More clarity needs to be brought into the Job Description of a PM. HR should also define PM specific roles/skills set.

Hiring a PM for a Startup is different from hiring one for an MNC. In a startup PM plays a generalist role, taking care of all the aspects of product management. PM has to perform Product Planning & Product Marketing, overseeing sales & other important activities too. In other words PM should have Probabilistic skills of being creative & visionary.

 In MNC the role of PM has specific well defined skill sets.  Based on the role, a PM has to work on Product Marketing or Product Planning. He doesn’t have to be the designer of the product; the sales of the product will be taken care by the sales team. Deterministic skills are very important to analyze the Market & Customer requirement. Methodological skills like Strategic thinking and foresight, ability to influence, motivate and inspire without direct authority is also important.

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Whole Product: More than a ‘Great Product’

Why is it that so many products fail in the marketplace even though they may be functionally competent? The answer lies in customers’ view of products as completely or inadequately answering their needs.

Most companies invest in building core products with the belief that this would solve a problem for their customers; the reality is that customers look for several other elements along with the core product to form a complete solution. The core product coupled with a host of services, experiences and other add-on products makes the ‘Whole Product’. The Whole Product concept originates from Theodore Levitt in 1980 when he built a model to help marketers and product visionaries adopt a holistic approach to building products.

During the same time, it was introduced by Regis McKenna and widely popularised by Geoffrey Moore in his book “Crossing the Chasm”, where it is defined as a core product bundled with additional elements providing compelling reasons to the customers to make the buying decision. In simple marketing terms, a Whole Product is the minimum set of products and services needed to give the customer a compelling reason to buy. Hence it is everything the customer expects – there is no gap!

The most recent example of a whole product would be the iPhone. The generic product is the mobile telephone with the email and browsing capabilities. While the market expectation was limited to the above, Apple delivered iTunes on the iPhone by leveraging the iPod/iTunes ecosystem. Thus, it offers a complete entertainment experience for the customer, and the ability to not just listen to, but also “discover” new music.

It is interesting to note that Apple didn’t limit itself to its current product offering and went on to build the Apple Apps Stores which was a clear value differentiator and set a new benchmark in the mobile industry. With all the ingredients, the core product with the iTunes, App Stores in place, Apple turned its focus on the customer experience and launched version 1.0 of the product with a brilliant touch screen and user interface.

The success of the iPhone simply lies in the Whole Product approach adopted by Apple which is being emulated by the competing products.  It was all about addressing the functional needs with an eye on the emotional needs and experiences.

If we were to apply the Whole Product thinking to a software product, it would call for the core software product plus the additional system/application software, hardware, system integration, installation, standards and procedures, training and support/maintenance. The usual approach in the industry is to identify the requirements for a software product and ‘do what we do here, really well’.

However, addressing customers’ Whole Product needs will be a lot more demanding on Product Managers, in particular. Many would argue about their role/responsibility, as their focus is predominantly on the core product. The reality is that great products rarely win in the marketplace, and only the best Whole Products make it to the top and sustain their leadership status.

Source: Toshiba http://en.wikipedia.org/wiki/Crossing_the_Chasm_(book)whole_product-blog

BUILDING THE RIGHT PRODUCT

Reading Eric Reis’s (founder of the “The Lean Startup” movement) recent article, “Are you building the right product?” pushed the worm in my head to write this note and I recommend it for mandatory reading to every entrepreneur and product manager (is there a difference?).

In our explorations in the product journey, I find myself in the middle of a “customer” vs. “market debate” (what’s the difference you may ask) and Mr Reis is advocating a different line of thought, something which I am tempted to say “told you so”

One of the most pause-worthy moments in Reis’ rant is where he says, “Because new features add overhead to products (generally making them more complicated), a new feature has to provide so much benefit to customers that it’s worth incurring this overhead.” Customers incur overhead too, not just manufacturers and marketers. Stop and think about that the next time you’re working on making something better.

Ironically, one of the challenges in building the right product is our increasing reliance on the voice of the customer.  No one denies the importance of being customer-centric, but relying on customers to tell us what features they need is a bad idea.  As we’ve said before, for many reasons, the voice of the customer cannot substitute for Innovation – it substantiates the co-creation journey

The effective way to understand if new features/capabilities are adding value is to identify and test the ways in which they impact behavior related to buying and using, i.e. if they will help the intended beneficiaries, be they buyers or users separately  save costs, work faster, think better and more importantly move them up the “aspiration” chain.

Even if new features meet those criteria, the benefits may not be substantial enough.  A new model of printer that offers a 2% saving in ink costs may not be attractive to a facilities manager who needs to expend effort on getting approvals from the corporate office and – deal with the disruption caused by installation.

Is it surprising that most “improvements” are simply not valued by customers when they are mostly done with a view to minimising cost for marketers or represents a please-all response?1-9ra3lmz7bwkyelh8y6poaa