Managing Products

In the Product Decisions tutorial, we showed that marketers are confronted with many issues when building the product component of their marketing strategy. While product decisions represent just one aspect of marketer’s overall activities, these decisions are often the most important because they lead directly to the reasons (i.e., benefits offered, solutions to problems) for why the customer decides to choose the organization’s goods, services or ideas.

In this part of our Principles of Marketing Tutorials we extend the coverage of product decisions by exploring additional product issues facing the marketer. In particular, we examine four important areas. First, we categorize the roles played by those involved in product management and show how the scope of a manager’s responsibilities changes as these roles take on greater importance. Second, we return to a discussion of branding by focusing on overall branding strategies that may be adopted by the marketing organization. Third, we spend a large part of this tutorial covering the importance of new product development including an analysis of the steps firms may follow to bring new products to market. Finally, we will see that once new products have been established in the market numerous factors force the marketer to continually adjust their product decisions.

Product Management Responsibilities

While this tutorial touches on basic concepts and strategies applicable to a large percentage of marketing situations, the reader should understand that no two marketing situations are the same. Yet while some concepts and strategies important to one marketer may not hold the same weight with another, in general, the basic principles of marketing (e.g., satisfying target markets, support decisions using research, etc.) hold no matter the type of industry, type of company or type of product being sold.

What is often different between two marketing situations is the level of complication and challenge that arises as a marketer’s scope of responsibility increases. For our purposes a marketer’s level of responsibility is measured in terms of:

• the number and variety of tasks that must be performed (i.e., what has to be done)
• the value these tasks represent to the organization (i.e., how important marketing is perceived within the company)
• the overall financial stake the marketing position holds (i.e., total sales volume and profit generation).

As responsibilities change so to do the marketer’s tasks. For instance, with regard to product decisions, as a marketer’s responsibilities become greater her or his day-to-day job shifts from being involved in specific product issues (e.g., finding a graphics design company to create a new label) to decisions concerning many products and focusing on setting the future marketing direction of the company (e.g., developing marketing plans for numerous products). We can see this in greater detail by examining the responsibilities associated with four different marketing management levels:

Levels of Product Management

• Product Item Level – At this level responsibilities are associated with marketing a single product or brand. By “single” we are limiting the marketer’s responsibility to one item. For instance, a startup software development company may initially market just one product. In some organizations the person in charge has the title Product Manager, though in smaller companies this person may simply be the Marketing Manager.
• Brand Product Line Level – At this level responsibilities are associated with managing two or more similar product items. By “similar” we are referring to products carrying the same brand name that fit within the same product category and offer similar solutions to customers’ needs. Procter & Gamble, one of the largest consumer products companies in the world, markets Tide laundry detergent in several different packaging sizes (e.g., 50oz., 100oz., 200oz.), in different forms (e.g., powder, liquid) and with different added features (e.g., softener, bleach). Tide’s product line consists of over 100 different versions of the product. Differences in the product offerings indicate these are targeted to different segments within the larger market (e.g., those preferring liquid vs. those preferring powder), however, it may also represent a choice for the same target market who may seek variety. A product line is often measured by its depth, relative to competitors, with deep product lines offering extensive product items. Brand product lines are often managed by a Brand or Product Line Manager.
• Category Product Line Level – At this level responsibilities are associated with managing two or more brand product lines within the same product category. In this situation the marketer may manage products that offer similar basic benefits (e.g., clean clothes) but target their offerings to slightly different needs (e.g., product for tough to clean clothing vs. product to clean delicate clothing). Multiple brand product lines allow the marketer to cover the needs of more segments and, consequently, increase their chance to generate sales. Often in larger companies category product lines are the responsibility of the Product Category or Divisional Marketing Manager who may have Brand Product Managers reporting to him/her.
• Product Mix Level – At this level responsibilities include two or more category product lines that are directed to different product categories. In some cases the category product lines may yield similar general solutions (e.g., cleaning) but are aimed at entirely different target markets (e.g., cleaning dishes vs. cleaning automobiles). In large companies, the product lines are very diverse and offer different solutions. For example, BIC sells writing instruments, shaving products, and lighters. This diversification strategy cushions against an “all-eggs-in-one-basket” risk that may come if a company directs all resources to one product category. A product mix can be classified based on its width (how many different category product lines) and its depth (how many different brand product lines within a category product line). Generally responsibility for this level belongs to a company’s Vice President for Marketing.