Of the items listed below, which do you think is the best indicator of a successful capital equipment company?
- The best sales team
- The best manufacturing capability
- The best customer service
- The best product
Without a doubt, it’s the last one. Great sales, manufacturing, and service capability are not going to get you very far if you don’t have great products. But in the capital equipment world, so much can go wrong in your battle to supply those great products. Any capital equipment professional with a little time under his belt has experienced at least one of the following bits of bad news.
- The product that engineering designed is not the one you intended.
- You can’t secure target prices.
- Customers have changed their requirements. There’s nothing in your development pipeline to address them.
- Nobody knows how to service your legacy installed base.
- The competition is better than you thought.
- You miss your market share goals by a mile.
- The new and improved version is six months late.
- Material costs are higher than planned – much higher.
- The product worked in the lab but can’t seem to meet its specifications at the customer site.
- Regulations changed. Your product is suddenly non-compliant.
- A key spare part went obsolete before you had a substitute.
- Your sales pipeline is emptier than a Boston beach in January.
As you can see there are bumps aplenty on the road to great products. But all these bumps have one thing in common. They are product management failures. Sure, you can assign each failure to a supply chain, engineering, marketing, sales, or service bucket. But somewhere in the chain of events, a hand-off was fumbled, requirements were misunderstood, or communication broke down. Each is both a failure in an activity and a failure to coordinate the activities necessary to ensure the commercial success of a product. That adds up to a product management failure.
Product management is the coordination of all the activities required to ensure the commercial success of a product.
The Product Management Sandwich
Product management is the coordination of five key activities.
- Market intimacy to produce a deep understanding of customers and competitors.
- Product-lifecycle management to marshal a product from inception to end-of-life.
- Product strategy to determine what, when, and for whom products will be offered.
- Product development to turn product strategy into sellable products.
- Product marketing to generate customer demand.
Product strategy, development, and marketing are discrete activities that conceive and then deliver a product to the market. These discrete activities are supported by continuous market intimacy and product-lifecycle management. Together the five activities make up the product management sandwich.
The Product Management Sandwich
Market intimacy development refers to the never-ending, iterative activities required develop a deep understanding of the customer and the competition. It includes voice -of-the-customer initiatives, relationship development across the supply chain, competitive intelligence gathering and other similar activities. The results of your market intimacy development inform all other product management decisions and activity.
Product lifecycle (PLC) management is the process of managing all stages of a products lifecycle from inception, through product development, production, and end-of life.
High-level Product Lifecycle Phases
The product strategy process examines a product’s market environment and its situation in that environment to make decisions about what products to offer and when.
High-level Product Strategy Process
Product development is one of the PLC phases which can be further broken down into sub-phases. It’s the process that turns a set of market requirements into a shippable product.
Product Development Sub-Phases
And finally, product marketing is the process for generating customer demand and developing the ability to substantiate your value proposition, competitive advantage, and price in a sales cycle.