Author - Ravi Lakkundi

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)management (Mainly Strategic)

• Learning by Example

Continue if you are NEW to Product Management ….Continue if you are NEW to Product Management ….Continue if you are NEW to Product Management ….Continue if you are NEW to Product Management ….

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 ofa product or products at all stages of

the product lifecycle (wikipedia)

• Comprising of Product Development and

Product Marketing

One who manages the Product is a

Product manager !! ;)Product manager !! ;)

Product Manager - Definition

• Product Manager is CEO of a Product

A B C A BAnalysis – Market Analysis

Business – Business Commitment (Money-Money-Money)

Customer – Customer/Consumer ContextCustomer – 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/otherbenefits for an organization and develops that offering/product forthe organization and further manages that offering throughout itslifecycle

Strategic/UpStream

Product Manager

Product Manager

Tactical/DownStream

Product Manager

Concept

Create

Commercialize

Product marketing

and Lifecycle

Management

Product Positioning

Routes to Market

Marketing Plan

Launch Plan

Collaterals and Sales

Pre-sales

Promotion

Channel and Sales Training

Evangelism

CRM

New Product Development/Introduction

Philosophy

• 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 • 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 ……

Best Approach to learning

Lets take a hypothetical company

• Company Name – ACowStick Pvt Ltd

• ACowStick Portfolio – Multimedia Speaker • ACowStick Portfolio – Multimedia Speaker

Manufacturers

• ACowStick Market Share – Growing Linear

• ACowStick Mind Share - Significant

Story Buildup …

• ACowStick visioning to become a leader inconsumer electronics industry intends tostrengthen its product portfolio ofMultimedia/Desktop Speakers

• ACowStick has a great set of engineers and its• ACowStick has a great set of engineers and itsproducts are valued for their engineering, Designand are sold world wide

• ACowStick is eyeing the emerging Markets forexpanding business and needs to make productswhich fit the demographic more accurately

Product Manager – Mr. DB …..

• ACowStick has Mr. DB as theirstar Product Manager

• Mr. DB sets out for scouting themarket to find out opportunitieswhere he can grow the companybusiness and expand the productbusiness and expand the productportfolio

Ideas for new product development can emerge from any

place – Either by Market research, Competitor info etc

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• 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

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 aloneMarket potential for Tablets alone

• The Market research firm gives DB some

graphs on trends, sales, units etc etc

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

tabletstablets

- 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

• 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 entertainmententertainment

SAMPLE DATA – May be irrelevant

Making a valid business case / Market Trends

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 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

The Accessories Market - Continued

• DB figures out the accessory portable speakermarket worldwide is around 20 billion !!

• Tablet covers accessory itself is around 2 Billion !!

• DB figures out a big potential for a “Killer Tabletaccessory” and he knows that ACowStick is a very

• DB figures out a big potential for a “Killer Tabletaccessory” and he knows that ACowStick is a verypopular and is a desirable Brand

• Now what he needs is either a highly acceptableproduct “A Me too product” or a “disruptivetechnology product (New Me)” and take somerisk with market acceptability

Making a valid business case / Market Trends

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 independentthe 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

Target �Make Something New – Out of the Box

Accessory – A Speaker for Tablets

Customers want good

product .. good sounding …

new and freshProduct to have

Customer Context

Product to be

structurally correct

and be usable

&^&^%$#*&^%$%

#^%&^%*((*^*&^

Conceptualize …….

• He decides to make aspeaker for tablets that isunique

• It is a part of the tablet coveror can act as a tablet cover

• It is a part of the tablet coveror can act as a tablet cover

• Can flap open or close whenrequired

• And not to forget soundsawesome !!

The First Look ….

• DB slowly builds up the idea

• He contemplates – This is moreusable than a portable speaker

• A speaker system is difficult forcustomers to carrycustomers to carry

• Any thing that is not a part ofthe system becomes anaccessory

• This particular idea issomething different – Anaccessory in principle butpractically not an accessory !!

A Tablet Cover with foldable

Speaker Attached to it !!

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 designerMr. Stu and makes sure hegets the idea. Post analyzinggets the idea. Post analyzingthe idea Mr. Stu comes upwith a rough rendering ofthe product concept

• DB does not spend muchtime in designing since hedoes not still know what hisstakeholders have to sayabout the idea in general

When OpenRendering …. Draft

When Close

Tablet with Cover (Speaker flaps open)

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• He names his concept as “FunTabStick” and

develops a product line and how product will

work

working …

• The user will use the FunTabStick and slide in theTablet (FunTabstick actually is a cover with speakers)

• The user will flip open the FunTabStick speaker on sidesand they will be connected by innovative mechanism

• Once the user slides in the tablet the tablet will• Once the user slides in the tablet the tablet willautomatically pair (Through NFC etc) with theFunTabStick cover and the speakers will start playingthe media audio (Bluetooth)

• Needless to say FunTabStick is a Powered cover with Li-Ion Batteries (Smartly packed with Speakers)

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 product can be offered (Market research

shows that 40% customers are willing to pay

20% of the tablet cost for a product like

FunTabStick)

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 World-

One Price)

$39 $49 $44 $54

This will help to concretely

justify the Target Retail Price ,

features and benefits over

competition

Fund Raising and Approvals ….• Once DB is confident on his idea and the feasibility

of the product. He presents his work in a conciseProduct Concept Document and presents to aapproval committee in ACowStick

The Executive committee decides (Based on

their experience and analyzing the defense puttheir 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 …

Return On Investment

• With a few more rendering of all theFunTabStick version DB now works with aprocurement team and finds a supplier basedout of China who can help him build such aproductproduct

• DB is smart and has already spoken to antaken in confidence his local engineering teamthat the product is feasible in design andsound quality

The Suppliers - ODM

• DB gets the quote from 3 trusted suppliers

FunTabStick7 FunTabStick10 iFunTabStick

Mini

iFunTabStick

Supplier 1 $20 $26 $23 $35Supplier 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

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 checkdetails with Global teams for a ROI check

FunTabStick7 FunTabStick10 iFunTabStick

Mini

iFunTabStick

Target FOB $ 21.4 $25.7 $23 $36

FOB – In Short Supplier will provide the packaged goods at the nearest port of

export/warehouse

Return On Investment

• DB now discusses his new concept product withglobal teams (Sales and Marketing) and gets theirconsent

• He shares them his concept document andproduct line buildup and later …..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 isever developed what would be projectedvolumes annually …

For ROI DB has to work with finance management team of ACowStick

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 !!!high for such product and some feel its low !!!

and some feel the product wont sell in their

market

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

ROI CalculationModel 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

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

ROI Calculation – Example (India & US)

• Price for FunTabStick – 7: $39

• Assuming a 2 level channel (worldwide) for

go-to-market

– Distributor– Distributor

– Dealer/Retailer

• Lets take two example countries

– USA

– India

Reading the slide ROIFunTabStick 7

12 month

forecasts FOB Landed Cost Distributor Price MSRP/MRP in USD Revenue Margin Margin $

INDIA 20000 $21.4 $27.9 $29.3 $39 $585,366 5% $29,268

USA 50000 $21.4 $24.0 $28.7 $39 $1,433,500 19% $272,365

RUSSIA 5000 $21.4

FILL DATA HERE$12,000

CHINA 15000 $21.4 $50,000

EUROPE 40000 $21.4 $350,000

BRAZIL 2000 $21.4 $8,000

Total:

Total: $ 6,013,610 Average: 12%

Total:

$721,633

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)

The Day of Approvals …

• DB presents to an Executive panel the following• 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 ………

Ready to be engineered …..Ready to be engineered …..

Good to Go ….

DB … FunTabStick - Product Manager

FunTabStick’s Program Manager

Project Manager -

DesignSupplier Manager

Design

Project Manager -

Mechanical

Project Manager –Software and Electronics

Project Manager -

Hardware

Project Manager -

Acoustic

• 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

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• 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

Product Manager Involvement

• Many times the requirements Vs Cost do notmatch the FOB which suppliers quoted

• Product Manager has to pitch in andsacrifice/compromise some requirement,sacrifice/compromise some requirement,color, material or finish

• This is to maintain the cost (target FOB) onwhich the entire business validation is based

• Engineering cycle is the most time consumingand has loads of risks

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 -• 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

What after you engineered?

• Verify the entire product

• Trigger QA teams for best quality

• Ask for the final commitment on volume

forecasts from Global teamsforecasts 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

Product Marketing …

• Product is ready and ready to bemarketed and sold

• Now DB needs to pitch in asTactical Product Manager andinvolve in following– Product Positioning– Product Positioning

– Routes to Market

– Marketing Plan

– Launch Plan

– Collaterals and Sales tools

– Channel and Sale training

– CRM

Product PositioningTarget 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

BrandBrand

Positioning Statement “Wrap the Tablet

with Good Sound”

Wrap the tablet with good sound

Routes to Market

General Trade

Organized Trade

Apple Premium Reseller and Apple Stores

Color Variations

Bundling Opportunities –

Exclusive color variants

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• 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

Sales and Channel Training

• Training is an integral part of Productmanagement

• Channel partners need to know the USP of theproduct, its operation and the entire philosophy

• DB has to drill the passion of the product and• DB has to drill the passion of the product andinfluence 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 othersales collateral that can help FunTabSticks sellbetter

DB’s success

• DB has successfully Conceptualized

FunTabStick for ACowStick

• DB successfully Created and Commercialized

the productthe product

• DB also successfully marketed the product

with good go to market strategy

• He also ensured an efficient presales drive

Product Manager - Profile

• CEO of Product

– Conceptualize , Create and Commercialize

– Design, Develop and Deploy

• Market KnowledgeMarket Knowledge

• Competitor knowledge

• ROI Knowledge

• Good to have relevant knowledge of technology

• Presales

• Good Marketer ….

Looking more on basic on

product management or

training – Contact metraining – Contact me

ravilakkundi(at)gmail com

Want to hire me .. feel free to contact

http://www.linkedin.com/in/ravilakkundi