What is Product Management and Why is it Important for your Company?

When you buy a phone or use software for work, can you imagine how many people are involved in the development of that product?

In those companies, it’s product management and their strategies that are responsible for creating that experience.

Product management deals with the essence of a business. After all, the products are the center of its marketing and sales strategies. 

They are the ones moving finances and promoting the relationship between the brand and customers. Without a product, the business has nothing to deliver to the market.

Taking the importance of that concept, we created this article to guide you through the topic: what is product management and why it is so relevant to your performance. 

Keep reading to see the following:

What is Product Management?

Product management is an area in a business that manages products in all steps throughout their life-cycle: from their conception, development and consumption, all the way to the end of its purpose in the market. Always with a focus on customer experience.

It’s important to note that this area isn’t just about physical products but also services, software, infoproducts; everything a company produces and delivers as a result of its work.

The goal for product management is to allow customers’ voices to be heard in such a way that the business can create products that meet their needs and offer value to the market. 

It’s an important tool not just for new releases, but for managing all sides of a product’s lifecycle.

To do that, this area requires a full understanding of customers’ behaviors, expectations, interests, and demands. It is a multidisciplinary field, usually led by a Product Manager.

Among the best talents for the job, there are software or product engineers, designers, QA specialists, and also marketing and digital marketing professionals. The latter deal with positioning, pricing, and other aspects of the product’s presence.

What is Product Management for?

Product management is responsible for delivering value to the market and receiving financial benefits in return.

The idea is to guarantee that the customers’ needs are being met and that the product is still relevant, while generating profit so the business can keep pushing towards its goals.

To do that, product management must be capable of analyzing the market, identifying demands and opportunities, and responding to these. 

Note that, in a digital era, the changes in behavior are increasingly constant, demanding quicker actions from Product Managers.

Beyond that, the team must consolidate systems and processes that ensure the product’s quality, according to the customers’ expectations and technical aspects of development.

Why is Product Management so Important?

Product management is crucial to a company’s success in the digital era. Let’s understand why, and the greatest benefits it brings to the table.

Aligns your offering to what the market needs

One of the main goals of product management is to make the development and strategies attached to your product make sense in comparison to what the market is looking for.

This way, the business creates and delivers something genuinely relevant for its customers. 

Products will be valued as something that can solve problems and/or satisfy needs, making them naturally more successful.

Improves customer experience

Intelligent product management improves its conception and development. 

Throughout the building steps, the company considers deeper characteristics about their customers and users, so the product can be consolidated around client satisfaction.

With that, the product’s customer experience contributes to their relationship with the brand. 

In managing a portfolio of products, you can rationalize this connection with positive interactions even when a product is declining in its life cycle.

Improves resource allocating

This area in a company can also help build efficiency for product development, mainly by identifying opportunities and defining priorities. 

With the data in hand, you can perceive which strategies are worth investing in to maximize returns without taking many risks.

Throughout the products’ lifecycle, for example, you can better understand when it is vital to invest in marketing and sales, and when it’s possible to reduce that priority and let it maintain a cruising speed.

Optimizes and speeds deliveries

This management structure also helps a team in the delivery stage of a product. 

All that matters is that it is centralized in a single project ecosystem, the team knows what paths to follow and what their roles are in the bigger picture. 

We are talking about goals, procedures, tools, communication channels, and so on.

When everyone is aligned, it is possible to make quicker deliveries, as the market now demands from companies. By the way, it’s one of the requirements to promote digital transformation.

Improves sales strategies

In any business, having good sales strategies is essential. After all, it is what makes your products reach new clients.

When product management is taken seriously, the sales department tends to be more effective and consolidated, as it can use the structure created as a foundation for new approaches.

It has everything to do also with the knowledge gathered by PM. The data collected about customer behavior, demands, and trends can be used to develop sales arguments that really matter to your audience. 

Thus, creating a deeper connection with them at the moment they make a buying decision.

What are the PM’s activities?

Product management can happen in varied ways from company to company. 

It depends on the business size, what it sells (physical items, services, software), its customer’s profile (including if it’s B2B or B2C), among other aspects.

Another factor is the methodology used in parallel with PM. In the cascade (Waterfall) method, activities are organized linearly. 

But in Agile, adopted in many IT businesses, there is a non-linear and iterative approach, that makes management more flexible and speeds up how you respond to the market.

That way, with short cycles, this vision is not exclusive to the planning phase, but present in all steps of product management. 

Marketing is also included in this, as releases and updates will become more frequent.

Now, let’s see what the main activities involved in managing products are, no matter the size, type, or goal the business has.

Market research

There is no efficient product management without deep knowledge of the market it is inserted in. 

It is crucial to not only know who your buyer persona is, but their needs, pains, demands, and expectations. 

Combining this data with benchmarks on the niche you’re in and your competitors, you have what you need to create more aligned and relevant products.

This research needs to be conducted in different ways and moments. You can do interviews, collect feedback, and make customer success surveys to measure their satisfaction after using the products.

As we said, with Agile, this research tends to be more frequent and rich when measuring customer experience.

Product development

Development is one of the most important stages of product management. 

This is the right moment to consolidate what you will offer to the market — not only the best experience but one that is the right fit for your audience.

In development, there are some steps to transform great ideas into valued goods. They are:

• Idealization: the mapping of ideas for products based on what the market needs.
• Conceptualization: definition of the product’s concept, what is its true value.
• Requirements: specifications and attributes you can include in the product.
• Design: the construction of the base experience.
• Prototyping: the creation of a prototype of its basic functions, called MVP (Minimal Valuable Product).
• Testing: the process of validating the MVP with practical tests.
• Learning: stage in which the team collects feedback from outside users and uses it to polish the experience.
• Release: marketing and delivering of the final product.

That is the main path structured by product management to streamline development and delivery. But it shouldn’t be seen as a rigid one. 

Throughout the whole process, the team can and should take steps back when needed.

For example, when the Learning stage shows something must be adjusted, it might be better to go back and iterate over the MVP. That way, you create an iterative process with continuous improvement until you find the ideal final product.

If you want to build a website, for instance, you can go through those steps to improve user experience and retain more of your traffic. 

Stage can help you with that, with an efficient, secure, and optimized hosting solution for your business. 

Product marketing

Marketing is one of the pillars of PM. Product marketing refers to all activities related to what you are selling, so you can transmit your brand positioning to your target audience.

It works with the customer’s perception of the tangible and intangible attributes your product has. This should be on par with the values the business as a brand wants to transmit.

One of these main characteristics is the tag number. Product marketing cares about pricing, not only thinking about profitability but also finding the right position to present yourself to the audience.

Another important aspect is distribution. Your brand’s marketing also depends on choosing the best distribution and sales channels, how your product reaches the customer, and the experience behind this process.

When releasing a new product, marketing is essential to fire up demand and transmit which values are attached to that offer. 

But it doesn’t stop there. Product marketing should follow this item throughout its lifetime, so you can keep the connection strong between brand and customer in the different phases of that experience.

Life-cycle management

Keeping with that subject, a life-cycle of a product is its role in the market at different stages of its existence as a viable consuming item. 

It goes through Introduction, Growth, Maturity, and Decline — when it must be taken out of circulation to open space for new solutions.

Life-cycle management is responsible for identifying those exact moments, and creating the most appropriate marketing strategies for each one. 

In Growth, for example, ads tend to be intensified to generate more buzz, sales, and to beat competitors.

Beyond that, it helps you manage the company’s portfolio with more rationality. When a product goes into the Decline stage, for instance, maybe it is time to take it out of the market and prioritize promotion of another newer item to balance finances.

How to do Product Management?

To end our conversation, here are some tips on how to do product management with efficiency. Check it out.

1. Know your customer

We can’t stress enough how crucial it is to have a deep understanding of your customer in order to have success, including in product management.

After all, they are your target, reaching them is your end goal.

So use surveys, analytics, and specialized tools to know more about your buyer persona. You can do it directly, by asking them about your product, or indirectly with traffic, social media monitoring, and heatmaps.

It is also important to promote empathy with the audience, to understand the root of their pains and needs, and how your product can meet those expectations. 

It is an essential quality for anyone who works as a product manager.

2. Validate your idea before releasing

A good idea isn’t always a viable one. You can think you had an awesome insight but maybe it isn’t feasible, scalable, or the market doesn’t need it right now.

That is why every new product must be validated before mobilizing marketing and development investments. 

That work starts at the prototyping stage, where you study the product in practice, then with the MVP. 

Their role is exactly to validate the relevance of the customer experience and its monetary viability. If you are building your first product, you can also work with a product management consulting firm to identify product-market fit.

3. Define a methodology

PM, like other management areas, is more efficient when you have a methodology set up. Collaborators can understand the workflow better and their roles inside it.

Today, many companies are using agile methods, such as Scrum and Lean, which are built based on short cycles, constant iteration, and flexibility of priorities. 

But there are many to choose from, including Waterfall, OKR, and much more. 

4. Go beyond functional attributes

Many businesses still focus marketing only on the specs and functional attributes of a product. 

Of course, these are essential to influence a buyer’s decision. But the customers of the digital era also want deeper connections with the brands they consume. 

Emotional, affective characteristics will also move that needle in your favor.

By creating this bond, you position your product in a way that it can be perceived differently from the competition, even if they are similar. 

Intangible attributes are way harder to copy. That is why marketing has to go beyond form and function and explore the experience that the brand offers.

5. Choose strategic sales channels

Knowing how to use sales channels for distribution is one of the most strategic roles of a Product Manager. 

This definition will determine if the right people are getting your product the right way.

A physical store, eCommerce, franchising, marketplaces, social media, and much more channels are available for you to use. 

The important thing here is prioritizing the ones that give the best customer experience and are the most practical for your persona — of course, if they also deliver good numbers in sales and profit.

Wrap Up

Product management is a crucial role in today’s businesses but a lot of them don’t understand that yet. 

It can be your edge ahead of the competition, to manage products with efficiency, vision and offer the best experience possible to your customers. 

Do you want to know more about how to have tighter control over your product and how it is being perceived among customers? 

Then come watch this exclusive Jam Session on using content to align market and sales — Operating Partner at Arthur Ventures!