The Importance of Managing Products in the Marketing Mix
Aims and Objectives
The aims of this project are to study about the importance of managing products in the marketing mix.
Objectives
- To determine the impact of product management on marketing mix
- To identify and evaluate the challenges in product management in regards to marketing mix
- To determine the ways/ strategies to overcome the issues/ challenges in product management
Literature Review
Introduction
A literature review is an important part of the dissertation that helps to develop the theoretical understanding of the topic based on the evaluation of the available literature. In this chapter, readers can get the idea behind the research topic by getting the understanding of the underpinning theories and concepts related to the topic. In this research, the first section of literature review presents the impact of managing product on the marketing mix. The second section provides the theoretical review of challenges in product management in regards to the marketing mix. In the last section, different ways to overcome the identified challenges in product management are discussed.
Product Management and its Importance
Product management is defined as a lifecycle function for organization which helps in planning, production and marketing of product, forecasting demand for product at different stages of product lifecycle (Lindner & Wald, 2011). According to Rushton, et al., (2014), product management plays a significant role in business as product management help integrating people, data, processes and business system. In other words, product management is a fundamental function which makes ensure that delivered product serves effectively to their customers and helps in accomplishing a goals and objective successfully. But in contrast to it, Christopher (2016) stated that product management is all about identifying and knowing the customer’s requirements and analyzing a market continuously for satisfying the customer needs.
Moreover, Ernst, et al., (2011) also discussed about importance of product management in business for achieving growth and development in the highly competitive market environment. The importance of product management is effective because it help in implementing a business strategy. In the research study of Freng Svendsen, et al., (2011), it has been clearly stated that product management provides guidance to the company in terms of investment in limited resources in order to deliver competitive products. Moreover, product management is also important for organizations as it help the company to be focused and also provide help in avoiding the adverse opportunities which may appear as a distraction for the organization. On the other hand, Lindner & Wald (2011) also elaborated that the importance of product management is to position a company by developing a effective product portfolio for achieving a competitiveness in future.
The product management also involves BCG matrix model for analyzing the business marketing and growth for organization in competitive environment. In respect to this, Udo-Imeh, et al., (2012) stated that BCG matrix helps in determining which product comes in which class i.e., star, cow, problem child and dog. In this, Star represents the product line which high market growth and high market share whereas cash cow represents the product lines which bring more income but at low cost i.e., low market growth with high market share.
At the same time, problem child is also known as question marks which don’t generate cash flow but provide more investment in order to maintain the market share. But, dog represents those product lines which are at declining stage i.e., product which may generate profit or loss at low market growth (Palia, et al., (2014). However, using BCG matrix helps in targeting and marketing the product competitively so that products of the organization achieve the large market share and growth.
Impact of product management on marketing mix
In the words of Franke & Schreier (2010), project management is the lifecycle function that is crucial to plan, forecast, produce and market the products at all stages of product lifecycle. On the other hand, Martinez, et al., (2010) describe that product management is based on the integration of people, data, processes and business systems that are important for marketing mix elements. Managing a product is based on the analysis of the market conditions and defining features of the product with the supervision of the production of the product.
At the same time, Creusen, et al., (2010) depicts that product management is significant in developing product strategy of the marketing mix. It is because by managing the product, the firms can evaluate the impact of the business environment on business and determine the demand for the product in the market that helps to develop the new products in the market. The functionality and roles of the product management depend on the size and history of the company. Also, it can be determined from the research of Frishammar, Lichtenthaler & Rundquist (2012) that profit and loss account is a key metric for the evaluation of the product manager performance. Therefore, it is important for the firms to bring the product to the market and actively monitor and manage it in the market to make profits.
Apart from this, Bstieler & Hemmert (2010) opine that product management is effective to fulfill gaps within the firms between different expertise teams including engineering teams and business development teams. For instance, the product manager is accountable for changing the business objectives into the engineering requirements. Moreover, Ernst, et al., (2011) reveal that managing the products can be effective to explain the capabilities and limitations of the finished product to promote the product and increase the sales of the company.
In the views of Kahn, et al. (2012), it is identified that product management has an in-depth impact on the marketing mix as if the product is managed properly then it also facilitates the proper working of the marketing mix elements. Likewise, the product is developed with the quality and at an affordable price; there is no need for the firms to invest more in promoting the product. For instance, Apple generates their products by including certain quality and such practices makes the customers loyal towards their brand. So in that case, they do not promote their products in a deep manner. Thus, such instances of Apple indicate that effectively managed products never demand high promotional efforts of the company by promoting their product regularly in front of customers.
In support to this, Kotler (2011) points out that that pricing of products largely depends upon the cost of investment or cost generation from the procurements of raw material to convert into finished good and deliver to customers. Therefore in deciding the price of any products, so for the product managements, the decision regarding the price is crucial which is taken by the investment of company over that product. So it can be stated that, those products are managed properly about have latest features and reasonable pricing then, in that case, there is less need for marketing mix to highlight their price in front of customers.
But in contrary to this, Cooper & Kleinschmidt, (2011) argued that for those companies whose products are in the initial stage of product development, then there is high need of marketing mix as regards to promote or make people aware of the product. This indicates that the company requires the marketing mix for their new product. It is because, at the initial level, the company prefers to use the marketing mix strategy for bringing the awareness of the product. The marketing mix for the products proves to be beneficial as it creates the market for the product.
Product life cycle (PLC) is a process which helps in managing the data and process related to the life of its product from the level of conception to manufacturing to maturity to disposal level. Stark (2016) clearly defined that product lifecycle management is developed for achieving the different benefits like improving product quality and increasing the product’s sales and also reduced the waste to a large extent.
This study also reflects that product management has the different impact on the marketing mix (Armstrong, et al., 2015). Likewise, in the stage of introduction and growth, marketing mix has the positive influence on the product with having fewer requirements. On the flip side, the marketing mix has comparatively less positive influences in the case of maturity and decline period but has high requirements.
In concern to this, Creusen (2010) stated that the product which is in the growth stage where the product is managed properly as it gets the recognition in the market than in that situation, there is not required high marketing mix strategy. It is observed that the product which has made their branding in the market with quality. Such product does not need for a broadly promotional process or developing any pricing strategy that includes the discount offers or anything.
In support of this, Geng, et al., (2010) identified that the products which go on the maturity stage, in that case, it is quite difficult to manage the product effectively. It is because; products have so many substitutes having the high quality that causes an increase in switching cost. Therefore, to manage the products in the maturity stage demands high need of marketing mix strategy to build customer loyalty. This requires special promotional campaigns, incentives to retain the existing customer base and attracts new customers.
On the other side, Snow, et al., (2011) mention that at the decline stage, the products considered as a less managed due to the loyalty of customer gets ruined and competitors offered the same product with high quality and features. Therefore, at this stage, there is more requirement of the marketing mix. The marketing mix helps in reinforcing the brand image into the customer minds. It also tries to make the customer loyal towards their brand. Hence, it can be stated that decline stage is that stage where there are high needs of the marketing mix for the managing of company’s product.
From the research of Kim & Atuahene‐Gima (2010), it can be determined that the product management is helpful for the management in formulating product strategy when an organization develops a new product or redesigns the existing product in the market. It is also an important thing that the management of the product fulfils the customers’ needs and creates a future demand that is the ultimate aim of the marketing. It is examined from the study of Freng Svendsen, et al., (2011) that the managing products in the marketing mix are quite important to develop the business value and brand image. The product management is helpful when the company wants to increase the product length, depth, and the product line.
In the view of Hoyer, et al., (2010), most of the conflicts are resolved by managing the products in the marketing mix that helps to focus on the business properly and the business growth. Also, by using the product management in the marketing mix, the business may grow fast and can add new efforts to make new customers.
The product management describes the product offers, quality, design, feature, and functions that provide support for selling product and benefit the business. Besides, Bucherer, Eisert & Gassmann (2012) stated that product management is a way to maximize the success of the business. The product is an essential element of the marketing mix by which the sellers can offer their customers with something unique from their competitors. To achieve the marketing objectives of the company, the elements of the marketing mix are major aspects of growing the business.
On the other hand, Un, Cuervo‐Cazurra & Asakawa (2010) describe that for effective management of the product, knowledge is an important aspect. It can reduce the project time, improve the quality and result in the increased customer satisfaction. Along with this, Stark (2015) points out that a product manager acts as a title holder for the selected product or service in a firm. However, the study of Osterwalder, et al., (2014) focuses on the customer centric views and recognizes that the performance of the firm can be enhanced by meeting the customers’ requirements by proper product adoption.
Challenges in managing product
In the study of Büyüközkan & Arsenyan (2012), it is interpreted that it is challenging for the firms to manage the products. If it is left to individual intelligence on how information is organized, artifact structure can become very complicated. Product managers who are personally organized try to create their structure, while others within the organization have their standards and conventions. Given the fact, the information is distributed in various ways, either they will end up wasting the good amount of time to keep the information structured or letting an unstructured format take precedent and wasting time looking for information including finding the most up to date information.
However, from the study of Goffin & Koners (2011), it can be determined that it is troublesome for the firms to meet different needs of the customers in this ever-changing market. The current market is dynamic as the needs and preferences of the customers keep changes at the regular basis. In such situation, it is difficult for the firms to manage those changing needs in product management perspective. In support to this, Frishammar, Lichtenthaler & Rundquist (2012) also affirm that if the product manager does not understand the changing needs of the customers in the industry, then it becomes challenging for the firm to satisfy their needs and manage the products effectively.
Contrary to this, Stark (2015) reveals that it is a big challenge for the product managers to innovate the products at continuous basis to satisfy the consumers’ demand. The innovation of a product is a big issue in managing the products. In the today’s business scenario, it is necessary for the organizations to differentiate the product to be competitive in the market. The innovation fulfills the need of vision and strategy of the marketing of the product and turns out to make it a valuable product.
Regarding this, Kahn, et al. (2012) also states that the innovation process is a long term process as it takes a long time to introduce new features and innovate the products. But at the same time, the needs and requirements of the customers keep changes as the investment in innovation may lead to loss of the time and resources in the long term. Differently, Armstrong, et al., (2015) argue that the changing market dynamics have a significant impact on the product management as there are several changes in product management due to the emergence of new competitors, the need of product advancements and customers’ needs change. All these changes have a significant effect on the product success and ultimately the firm.
The research of Freng Svendsen, et al., (2011) recognizes that globalization is a big challenge for the management of products within the firms which are operating their business globally. It is because the firms are expanding their business internationally in the period of globalization. Due to expansion in international markets, firms have to face cultural differences that also impact on the needs and requirements of the customers. Similarly, Kim & Atuahene‐Gima (2010) also depict that it is troublesome for the product managers to meet the requirements of the customers in the international market which differ due to the influence of the cultural differences across the countries.
Ways to overcome the challenges in managing product
According to Kim & Atuahene‐Gima (2010), it is important for the firms to understand the market and its trends and recognize the potential risks and opportunities to manage the products properly. Relating to this, Freng Svendsen, et al., (2011) depict that firms need to conduct regular market research to determine any changes in the external environment of the country. It helps the management to make changes in product management accordingly and to manage the products successfully. Also, it can be suggested from the study of Bucherer, Eisert & Gassmann (2012) that training and learning programs are effective to develop skills and knowledge of the employees and managers within the organization.
With the good understanding of the market changes through training programs, the employees can better analyze the market conditions and predict the possible changes to make better strategies for product management. About this, Geng, et al., (2010) also states that coaching programs can be effective for the firms to develop the understanding of the management and employees regarding the market dynamics and industry trends to make changes in product management accordingly.
Apart from this, Snow, et al., (2011) depicted that it is crucial to make the information system easier and effective to develop the required information and use this information in managing the products efficiently. The use of better information system can be helpful for the organizations to draw the meaningful information from the data and use it in product management. However, the study of Kahn, et al. (2012) suggests that it is important for the firms to analyze their business strategies internally on a regular basis. Internal assessment can be helpful for the organizations to find out any gaps in existing capabilities and manage the products accordingly.
Similarly, Cooper & Kleinschmidt (2011) state that the firms should focus on how to deliver the product at the right place and time, and which channel should be selected. In addition, a decision should be made on how to relate the product to the target market and persuading them to buy it. Snow, et al., (2011) stated that consumers make their purchases by price not other attributes. Customers’ perspective is important while developing a service product. About the issue related to cultural differences in product management, Osterwalder, et al., (2014) suggest that it is imperative for the management of the firms to study the cultural differences by conducting the diversity management programs. These programs can be helpful for the employees to understand the cultural differences and their impact on the customers’ needs and preferences that may lead to better management of the products in international market.
References
Armstrong, G., Kotler, P., Harker, M., & Brennan, R. (2015) Marketing: an introduction. UK: Pearson Education.
Bstieler, L., & Hemmert, M. (2010). Increasing learning and time efficiency in interorganizational new product development teams. Journal of Product Innovation Management, 27(4), 485-499.
Bucherer, E., Eisert, U., & Gassmann, O. (2012) Towards systematic business model innovation: lessons from product innovation management. Creativity and Innovation Management, 21(2), pp.183-198.
Büyüközkan, G., & Arsenyan, J. (2012) Collaborative product development: a literature overview. Production Planning & Control, 23(1), pp.47-66.
Christopher, M. (2016) Logistics & supply chain management. Pearson UK.
Cooper, R. G., & Kleinschmidt, E. J. (2011) New products: The key factors in success. UK: Marketing Classics Press.
Creusen, M. E. (2010) The importance of product aspects in choice: the influence of demographic characteristics. Journal of Consumer Marketing, 27(1), pp.26-34.
Creusen, M. E., Veryzer, R. W., & Schoormans, J. P. (2010) Product value importance and consumer preference for visual complexity and symmetry. European Journal of Marketing, 44(9/10), pp.1437-1452.
Ernst, H., Hoyer, W. D., Krafft, M., & Krieger, K. (2011) Customer relationship management and company performance—the mediating role of new product performance. Journal of the academy of marketing science, 39(2), 290-306.
Ernst, H., Hoyer, W. D., Krafft, M., & Krieger, K. (2011) Customer relationship management and company performance—the mediating role of new product performance. Journal of the academy of marketing science, 39(2), pp. 290-306.
Franke, N., & Schreier, M. (2010) Why customers value self‐designed products: The importance of process effort and enjoyment. Journal of Product Innovation Management, 27(7), pp.1020-1031.
Freng Svendsen, M., Haugland, S. A., Grønhaug, K., & Hammervoll, T. (2011) Marketing strategy and customer involvement in product development. European Journal of Marketing, 45(4), pp.513-530.
Frishammar, J., Lichtenthaler, U., & Rundquist, J. (2012) Identifying technology commercialization opportunities: the importance of integrating product development knowledge. Journal of Product Innovation Management, 29(4), pp.573-589.
Geng, X., Chu, X., Xue, D., & Zhang, Z. (2010) An integrated approach for rating engineering characteristics’ final importance in product-service system development. Computers & Industrial Engineering, 59(4), pp.585-594.
Goffin, K., & Koners, U. (2011) Tacit knowledge, lessons learnt, and new product development. Journal of Product Innovation Management, 28(2), pp.300-318.
Hoyer, W. D., Chandy, R., Dorotic, M., Krafft, M., & Singh, S. S. (2010) Consumer cocreation in new product development. Journal of service research, 13(3), pp.283-296.
Kahn, K. B., Barczak, G., Nicholas, J., Ledwith, A., & Perks, H. (2012) An examination of new product development best practice. Journal of product innovation management, 29(2), 180-192.
Kahn, K. B., Barczak, G., Nicholas, J., Ledwith, A., & Perks, H. (2012) An examination of new product development best practice. Journal of product innovation management, 29(2), 180-192.
Kim, N., & Atuahene‐Gima, K. (2010) Using exploratory and exploitative market learning for new product development. Journal of Product Innovation Management, 27(4), pp.519-536.
Kotler, P. (2011) Reinventing marketing to manage the environmental imperative. Journal of Marketing, 75(4), pp.132-135.
Lindner, F., & Wald, A. (2011) Success factors of knowledge management in temporary organizations. International Journal of project management, 29(7), pp. 877-888.
Martinez, V., Bastl, M., Kingston, J., & Evans, S. (2010) Challenges in transforming manufacturing organisations into product-service providers. Journal of manufacturing technology management, 21(4), pp.449-469.
Osterwalder, A., Pigneur, Y., Bernarda, G., & Smith, A. (2014) Value proposition design: How to create products and services customers want. USA: John Wiley & Sons.
Palia, A. P., De Ryck, J., & Mak, W. K. (2014) Interactive Online Strategic Market Planning With the Web-based Boston Consulting Group (BCG) Matrix Graphics Package. Developments in Business Simulation and Experiential Learning, 29.
Rushton, A., Croucher, P., & Baker, P. (2014) The handbook of logistics and distribution management: Understanding the supply chain. UK: Kogan Page Publishers.
Snow, C. C., Fjeldstad, O. D., Lettl, C., & Miles, R. E. (2011) Organizing continuous product development and commercialization: the collaborative community of firms model. Journal of Product Innovation Management, 28(1), pp.3-16.
Stark, J. (2015) Product lifecycle management. In Product Lifecycle Management (Volume 1) (pp. 1-29). UK: Springer International Publishing.
Udo-Imeh, P. T., Edet, W. E., & Anani, R. B. (2012) Portfolio analysis models: a review. European Journal of Business and Management, 4(18), pp. 101-117.
Un, C. A., Cuervo‐Cazurra, A., & Asakawa, K. (2010) R&D collaborations and product innovation. Journal of Product Innovation Management, 27(5), pp.673-689.
Varley, R. (2014) Retail product management: buying and merchandising. UK: Routledge.
