Consider the last product you have bought. Was it a brand-new smartphone app? An oil for your car? A candy bar? Have you considered who is in charge of managing products and what their responsibilities are?
Any company or organization’s success depends on how well it manages its products and services. As you know, products do not just magically appear on the market and they must be well-managed as they progress through the stages of growth, maturity, and decline.
So, in this blog post, we will discuss what product service management is and how important it is for your business.
Let’s start with this:
What is Product Service Management?
If you want to be successful in any industry, you must manage your products and services effectively. Product service management (PSM) is a marketing function that focuses on improving a product or service in response to market changes. It involves an ongoing evaluation of their features in order to improve or modify the items as required.
Who is a Product Service Manager?
A product services manager is someone who is responsible for managing a company’s product and service development, ensuring quality and customer satisfaction.
They are usually in charge of managing product roadmaps, conducting market research and analysis to identify business opportunities, collecting and evaluating customer reviews, and managing different departments to develop new products for the market. In addition, a manager must lead and inspire their workforce to accomplish their goals while adhering to the company’s policies and procedures.
Responsibilities of a Product Service Manager
Companies need to take various measures to provide quality product management. These companies put together marketing, operations, and sales functions, allowing them to provide the desired products and services to their customers as a result.
Today, not every organization has a “product manager” role. Despite this, almost every company employs “brand managers” to manage the products or a group of closely related products.
Effective feedback and collaboration among all departments within an organization are essential for effective product management. It goes without saying that managing products requires excellent communication skills.
But who exactly is in charge of and accountable for those measures? In a small company, a business owner or a manager is the person in charge.On the other hand, in large and more developed companies, a whole department may be assigned to deal with products and services. Moreover, forming a joint team of business analysts, designers, developers, sales reps etc. is vital to effective product management
What exactly do they do? They constantly track products, look for new opportunities and functions, modify products, maintain existing products, or eliminate them, depending on market situations.
Benefits of Product Service Management
In today’s world, managing products and services entails coordinating an entire range of complex marketing activities, such as product selection and evaluation, technological testing, market analysis, trial sales, advertisement sales support, and so on. You can change the company’s fate for the better by properly implementing marketing measures, and you can reap the following benefits from product service management:
Increased customer loyalty
This is an important goal for any company, and it’s usually achieved by building a strong relationship with customers. Product service management looks at ways of building long-term relationships by offering personalized services which are tailored to customers’ specific needs. Additionally, it develops products that will meet their expectations in terms of quality at different price points.
More flexible to changing market conditions and customer demands
Product management allows you to make your business more flexible about changing market conditions and customer demands. The bottom line is that you need to know where your company will be in the next few years and what its goals are, therefore, use product service management as a way of achieving these objectives
A company that has a product service management department will always have something new to offer to their customer and at the same time they are able to maintain or improve existing products. It’s important for any business not only to survive in today’s market but also to be relevant tomorrow, by constantly offering newer solutions as well as improving on its current offerings.
Constant control and good management of products give more chances to increase sales and profits:
The process of product service management is necessary in the modern world. A company needs to control its products and be constantly aware of the changes that might have an impact on them. It also has to evaluate their quality so that it could adapt them to guarantee customer satisfaction.
The 3 Phases of Product Service Management
Every company handles product/service management differently, but there are three main phases to be aware of in the management process. They are new product development, existing product monitoring, and weak product elimination.
1- Developing new products
Companies spend a great deal of money, time, and effort developing new products to offer to their customers. New products may be the goods or services that:
- Have never been offered on the market before
- Have been modified in some way
- Will be presented or distributed in a new manner
As you can see, some products are entirely new on the market, but even old products can be considered “new” again in this process. An established soft drink may have a “new, improved” formula or taste. Cosmetic, such as lipstick, that has been on the market for several years may receive completely new packaging or design.
Businesses have several different ways to obtain new products. They may purchase them from another person or a company, license them from another person or a company (they buy permission to sell a product but do not actually own it), acquire them by purchasing another company, or develop them internally.
Let’s examine the basic steps of internal product development. Keep in mind that an idea or a potential product may be discarded at any point in the process if the company or the product/service managers decide that it does not make a positive contribution to the product/service mix or will not make a profit.
Generate ideas. Ideas for new products can come from a variety of sources—employees, customers, sales representatives, retailers, friends, family members—you name it! It may take hundreds of ideas before you come up with a good one for new-product development. Some companies have product-management committees that meet regularly to brainstorm new-product ideas. Each idea must then go through a screening process.
Screen ideas. The purpose of screening new-product ideas is to identify any that will potentially be unworkable. For this reason, top-level managers from many different departments (finance, engineering, distribution, etc.) are often involved in this step. An idea may seem great on paper, but in reality it may be too expensive, it may have been tried unsuccessfully in the past, or it may not fit well with a company’s goals and objectives.
Test the product concept. If an idea makes it past the screening process, it is ready to be tested. This means getting feedback from potential customers about a potential product. Concept testing should answer the following questions:
- Is our target market interested in this product?
- Is it the right time to introduce this product?
- What benefits does our target market expect from this product?
Concept testing may involve a simple customer questionnaire or, in some cases, an actual prototype of the product. It’s important to be very selective at this stage in the new-product development process because taking a product any further requires a much more significant financial investment from the company.
Conduct a business or feasibility analysis. This is an in-depth analysis that takes many factors into account, such as demand, costs, competition, required investment, and potential profit. Again, managers from many different departments may contribute to this step in the process. Think of the feasibility analysis as a much more detailed and serious screening step. It may take months to complete. If a company decides that the product is feasible at the time, it will take further steps to develop it.
Develop the product. Product development is a lengthy step that could take months or even years to finish. During this step, a working model of the product is tested, modified, and retested, until the company decides if it’s ready to hit the market. The cost of production is estimated, and plans for packaging, labeling, brand name, promotion, and distribution are made. Government regulations may also require safety tests to be completed during this step to prevent unsafe products from entering the market. Development can be a very expensive stage. Remember that Chick-fil-A sandwich that took over six years to develop? The cost was over $500,000!
Test market the product. Test marketing involves introducing the product into a limited market to see how it will be accepted. It serves to guide product/service managers in planning actual marketing strategies. The product is tried out in specific locations to get customers and retailers’ reactions before starting a wider distribution. Modifications of the product can be made as a result of the test market, or the product may be dropped at this point if the test market results are particularly poor.
Test marketing isn’t needed for all new products. It may not be used in some cases because it is expensive, delays entry into the full market, may not provide a reliable picture of results, offers no guarantee of real success, and allows rivals to duplicate the concept while it is being tested.
Commercialization. If a product has passed through all of the other stages of the new-product development process, it is now ready to be commercialized. The product enters full-scale production, a marketing strategy is being developed, service and sales training is being performed, and the product life cycle begins.
2- Monitoring existing products
Products that are already on the market are referred to as existing products. Product/service managers must keep a close eye on current products and monitor their revenue, profits, market share, and how well they are meeting company targets and expectations.
Product/service managers may decide that an existing product is effective and does not require any changes. They may also decide to include new features or alter the design or packaging in any way. Making improvements to an existing product also follows the same steps as developing a new product. Managers may change the marketing plan to reposition the product. Or, they could decide to eliminate the product entirely.
3- Elimination of weak products
This is also known as product discontinuation. Weak products are those that have seen a drop in sales and profitability. To avoid damaging a company’s reputation, product discontinuation must be carefully planned. Some goods can be removed from the market right away, while others are phased out over time.
Some businesses phase out a bad product slowly to give consumers time to find alternatives, or they can continue to offer service for a discontinued product for a set period of time to keep customers happy. Product/service managers must weed out any weak products, however, because of their costs to the company. Remember, product/service management is all about making the most profitable product-mix decisions possible.
In response to market opportunities, product/service management is a marketing function that entails obtaining, developing, maintaining, and optimizing a product or service mix.
Customer desires and needs, company priorities and plans, costs and available capital, competition, the product itself, government legislation, product life cycle stage, and market and economic patterns all have an influence. Since it influences positioning, increases product success, gives the product an identity, and improves the company’s reputation, product/service management is an important part of marketing.
The three main phases of product/service management are new-product development, monitoring existing products, and elimination of weak products. New-product development involves idea generation and screening, concept testing, feasibility analysis, product development, test marketing, and commercialization.