Product Management in Telecommunications. Dr. Lutz Grüneberg March, 16th 2006

Transcription

1 Product Management in Telecommunications Dr. Lutz Grüneberg March, 16th 2006

2 Agenda Market & Products, Customer Contact Points, Value Chain Product Life Cycle Vision & Strategy Product Manager s profile Product Management Framework Regular PM Tasks Product Manager s role in the company Spotlights 2

3 Market & Products: Customer Perception (1) Corporate Customers Brand Products SME Customers Market Brand Products Brand Products Consumer Brand Products Buyer side Supplier side 3

4 Market & Products: Customer Perception (2) Buying decisions of customers are dependent mainly on individual (supplier) market perception. Perception depends on Company Brand (Do they fit to me?) Product Offering (Do they have the right thing?) and Experience of the customer or other entities in his community. Experience exchange takes place also between buyer markets. Brand & Product Perception are steered by Supplier. Objective is to achieve long term customer retention. This means: Cognitive Dissonances must be avoided. Product & Brand must fulfill the promise. This applies for all product related contact points! 4

5 Case Study Contact Points: Food Industry - Pizza Marketing - the Promise: Customer view Ads for new Pizza on the TV, in Journals etc. Sales - between Promise and Fulfillment: Customer enters Supermarket and want to buy a Pizza - one out of 20 different, but comparable products. Shelf position, price and packaging will influence his buying decision. Consumption - Fulfillment: Packaging removal, and preparation are the first steps. Taste experience will be the final fulfillment step. Remarks: The customer expects that each of the same type of Pizza will be available in the same place, will have the same packaging and price and will taste as it s predecessor. He will share his experience with the people around. There is no direct link between the producer and the consumer. 5

6 Case Study Contact Points: Mobile Telecommunications (1) Marketing - the Promise: Customer view Ads for new tariff plan or mobile terminal on the TV, in Journals etc. Customer contract expires soon, he feels that his current tariff plan is to expensive or he just want to get a current handset Sales - between Promise and Fulfillment: Customer enters Shop (physically or via Internet) and wants to buy a new contract - in many cases bundled with a terminal. Shelf position, price, terminal brand and sales talk will influence his buying decision. After he made his buying decision, service provisioning starts, terminal availability is a show stopper in case of bundling. Service Delivery, Billing & Customer Care - Fulfillment: Customer leaves the shop and uses the phone: Coverage and service availability are qualifiers. Service usage is billed to the customer. If the bill is wrong or he has questions, he will turn to the customer care. 6

7 Case Study Contact Points: Mobile Telecommunications (2) Remarks: Contract lifetime is usually two years. This means: He will use the service for 2 years, 24 hours a day, complaining about failures for two years. Customer will share his experience with people around. There is a direct link between the service provider and the consumer. Marketing, Sales, Service-Provisioning, Service-Delivery, Billing and Customer-Care are the direct contact points and are the core processes of an operator or service provider. Telecommunications differs from other industries: Direct customer contact More customer contact points, More core processes 24 * 7 service availability and service delivery (2 years contract binding period) Processes are a very important element of the product 7

8 Value Chain Physical goods industries, e.g. Personal Computer Peripherals Parts Manufacturer Distribution Retail Customer -Product -Brand -Retailer Brand Mobile Telecommunications Terminals Mobile Network Network Eq. Licenses Operator (NetCo) Distribution (Service Provider) Retail (Service Provider) Customer -Product -Brand -(Terminals) -Product -Brand -Terminal 8

9 Product Life Cycle Product Life Cycle Phases Development Product Sales Introduction Growth Maturity Decline Development Introduction Growth Maturity Decline Phase Out time Phase Out 9

10 Development Phase Very high expenditures Product Sales Time consuming in telecommunications No sales revenues Losses Development Introduction Growth Maturity Decline Phase Out time In one term, the 2005 Innovation process! 10

11 Introduction Phase In the introduction stage, the firm seeks to build product awareness and develop a market for the product. Product Sales Product branding and quality level is established, and intellectual property protection such as patents and trademarks are obtained. Pricing may be low penetration pricing to build market share rapidly, or high skim pricing to recover development costs. Development Introduction Growth Maturity Decline Phase Out time Distribution is selective until consumers show acceptance of the product. Promotion is aimed at innovators and early adopters. Marketing communications seeks to build product awareness and to educate potential consumers about the product. 11

12 Growth Phase The firm seeks to build brand preference and increase market share. Product Sales Product quality is maintained and additional features and support services may be added. Development Introduction Growth Maturity Decline Phase Out time Pricing is maintained as the firm enjoys increasing demand with little competition. Distribution channels are added as demand increases and customers accept the product. Promotion is aimed at a broader audience. 12

13 Maturity Phase Product Sales Development Introduction Growth Maturity Decline Phase Out time Strong growth in sales diminishes. Competition appears with similar products. Primary objective is to defend market share while maximizing profit. Product features may be enhanced to differentiate the product. Pricing may be lower because of the new competition. Distribution becomes more intensive and incentives may be offered to encourage preference over competing products. Promotion emphasizes product differentiation. 13

14 Decline Phase When sales decline, the firm has several options: Product Sales Maintain the product, possibly rejuvenating it by adding new features and finding new uses. Harvest the product - reduce costs and continue to offer it, possibly to a loyal niche segment. Development Introduction Growth Maturity Decline Phase Out time Discontinue the product, liquidating remaining inventory or selling it to another firm that is willing to continue the product. Marketing in the decline phase will depend on the selected strategy. 14

15 Phase Out Key Points: This phase is service industries specific Product Sales Migration of customers Phase out of remaining customers Adapt processes Development Introduction Growth Maturity Decline Phase Out time Deconstruction of technical systems Phase out is not for free... 15

16 Vision and Strategy Definition of goal, strategy and tactics From corporate vision to customer satisfaction Role of portfolio management 16

17 Definition of goal, strategy and tactics Key Points: Turnover Goal Having a vision or goal is key to march into a direction Market To know the current location is essential to define a strategy Taktik A strategy marks the aligned way from the current to the goal Tactics are necessary to circumnavigate current issues Location (analyzed) Strategie Customers You can t draw a straight line from one point Recommended reading: Sun Tsu, The Art of War 17

18 From corporate vision to customer satisfaction Vision Corporate Strategy Focus on development and leverage of core competencies Divisional Strategy Product / Market Strategy Focus on customer specific needs Marketing Tactics Customer Satisfaction 18

19 Product Managers Profile Typical Job Description: Visionary with a genius for implementation. Must be both entrepreneurial and corporate-minded. Requires focus to follow a long term strategy with ability to adapt new changing frame conditions. Combines marketing know how with technical understanding and has experience in both areas. Can work with people from all cultures and company levels with minimum authority. Is willing to serve as a products soul. 19

20 Product Management Objective is to help customers to buy the product, not to administrate the product. Nevertheless, product politics are essential for successful product management. We only cover a pragmatic approach according to Linda Gorchels here today. We do not cover in detail strategic pricing, distribution channels, market communications, market research, marketing planning, marketing controlling and also not marketing organization due to the limited time frame. We don t talk about product development here today. We assume that we have an existing product to be managed. 20

21 Product Management Framework Market Analysis Maintenance Innovation Rational ization Opportunities & Threats Product Line Strategies Competitive Analysis Product Portfolio Goals Revitilization Performance Analysis Corp. Goals & assessment Competitive actions Concept: Determine current location by analyzing market, competition, and performance of the product. Use this as input for Product Portfolio Management - which receives input from corporate goals and assessment as well. Based on this, define product line strategy and derive actions from this. This will trigger PM projects. Repeat the process regularly. 21

22 Market Analysis Market Analysis Maintenance Innovation Rational ization Opportunities & Threats Product Line Strategies Competitive Analysis Product Portfolio Goals Revitilization Performance Analysis Corp. Goals & assessment Competitive actions Methods: Trend-Spotting (e.g. WiK) Market Research Primary Secondary Standard Reports (e.g. Durlacher, TeleBasics) Official Sources (e.g. Statistisches Jahrbuch, BMWi Reports, Bundesnetzagentur) Customer Segmentation Note: Separate problem oriented approaches and technology oriented approaches, e.g. from suppliers 22

23 Market Analysis Checklist Establish folders for trends to be tracked. Share the tracking with colleagues (work and fruits). Customer segmentation should be pragmatic. Customer profiling should include profitability, market size, growth rate, multiplier rating, and price sensitivity. Evaluate the ability to satisfy customers needs better than competitors. Combine market attractiveness and ability to serve evaluations to prioritize market segments and customers. Apart from customer gross adds: don t forget churn and retention Read major reports, use the internet, but stay critical 23

24 Competitive Analysis Market Analysis Maintenance Innovation Rational ization Opportunities & Threats Product Line Strategies Competitive Analysis Product Portfolio Goals Revitilization Performance Analysis Corp. Goals & assessment Competitive actions Methods/Elements: Portfolio Analysis Product Analysis Marketing Analysis Distribution/Retail Analysis Query Customers Mystery Shopping Trend Analysis Be sure to determine real competitors Note: We will come back to this point later 24

25 Performance Analysis Market Analysis Maintenance Innovation Rational ization Opportunities & Threats Product Line Strategies Competitive Analysis Product Portfolio Goals Revitilization Performance Analysis Corp. Goals & assessment Competitive actions Methods/Elements: Determine you own position regarding Brand Portfolio Product Financial Performance of product including cost structure cost drivers process costs Pricing Revisit the business case Rate your Portfolio 25

26 Portfolio Management Produktportfolio Strategic benefits Objectives: Prioritize Products with major benefit & perspective Transformation of global goals to product politics and market perception Keep the product portfolio manageable 4 Quantitative benefits Avoid to over roll the organization with product development and product management projects 26

27 Product line strategy examples for mature products Maintenance Strategy examples Stay the course Reduce the scope Defend the perimeter Revitalization Strategy examples Add value (U2 ipod bundle) Reposition (Red Bull for Golfers) Base extension (usage/number of users) Rationalization Internal cost savings to improve DB 27

28 What s up on the agenda in between Product Management project management Roadmap maintenance Marketing plan verification Web update Flyers, Presentations, Factheets etc. Supplemental Sales Presentations Forecasting BC updates Budget Planning Trend spotting Churn reasons analysis Trouble Ticket evaluation KPI Monitoring WH Report Analysis Tracking legal and regulatory situation Reporting (to Management) And AP tracking 28

29 Forces impacting teleco products Market Customers Social Trends The Firm Product Suppliers & Technology Regulations & Legal Competitors 29

30 Spider Web of the Product Manager Engineering Reporting & DWH Technical PD Marketing Management Customer Care Product Manager Sales Purchasing Operations Security Finance & Controlling Customers Legal & Regulat. 30

31 Importance of business processes in Telco Marketing Sales Service Provisioning Customer Service Delivery OSS World BSS World Roaming Content Billing Process BSS: Business Support Systems OSS: Operation and Support Systems including Base Station System and Switching System Customer Care Carrier The product is the process 31

32 PMs should plan their time carefully Strategic duties, short term duties and day to day duties should be balanced. The PM should make a schedule for himself to keep them balanced. Avoid that fire hunting eats up your time. Make a long term planning to schedule preparation work for reporting, financial planning, forecasting etc. Strategic Duties Short Term Duties Day to Day Duties 32

33 Spotlights Product Manager s baggage Priorities & Focus Social Networking Customer Contact Reporting Information Competitor Tracking Business Processes Product Profile 33

34 Product Manager s baggage The following set of documents a PM should always have with him: Flyer or Factsheet describing the product for customers on one page (benefits, functionality) 10 slide presentation describing product and features Price List Roadmap If you are in the company A one page slide describing the product The most current BC Forecast Schedule Product Profile 34

35 Product Overview Chart Example Product Description Essential prouct function Product features & options Pricing... Pricing Concept Who pays (User, Customer, Advertiser) Per View, monthly flatrate,... Amount, i.e. 1-5 Euro monthly Competitors Who are the competitors with comparable products Market share of competitors Addressed market segments Addressed market segements, size and addressable size Priorities... Customer Benefit/USP/ Differentiation features Superior capability characteristics in relation to competitive offers USP Reasons to buy the product... Product Goals Risks I.e. generate mobile voice revenues Implementation effort: High/Medium/Low Market Risk: High/Medium/Low 35

36 Priorities & Focus You can do anything, but not everything Focus on priorities - plan your time Choose promising products & services Check before you decide Make them successful and keep them successful 36

37 Social Networking Try to establish an social link to the people you need to work with Spend effort to make the team a real team Be present: Ask your peers directly, learn what they think Circumnavigate Pancaking 37

38 Customer Contact Read Hotline Tickets (or use tools near to) Be in the shop to understand how the business goes Read KPI reports to learn about problems Visit Focus Group meetings Join Sales people in the business segment Keep track to be involved in RfIs and RfQs Ask people around you (friends) to get there estimations and perception of consumer products 38

39 Reporting Information Get KPI reports from operations Ask the data warehouse people what they can do for you Talk to the security guys to learn about fraud Talk to the quality guys to learn from them Check for operational reporting tools Maintain you own trend records, statistics etc. 39

40 Competitor Tracking Which type of staff they are looking for Meet their PMs on trade shows and ask them (without telling them who you are) Visit their shops Track their internet page Check the news-tickers (e.g. Google Alerts, Heise News) Ask people around you who are using their services Read mystery shopping reports available in the company 40

41 Business Processes Business Processes, especially internal processes can be boring sometimes But please: keep them If you experience problems, contact the people directly. Misunderstandings and missing informations are frequent reasons for limited progress If you launch products without keeping the processes, you will endanger the complete product 41

42 Product Profile The product profile is the document describing all details of the product development and is an important output of this process Please keep and update this information. Add all important reference information to decisions, processes etc. Later on you will be happy to have all this written down And: because everything is documented, you are on the save side in case of a later audit 42

43 Thank YOU! Questions? Please do not hesitate to contact us: ADVENAGE GmbH Dr. Lutz Grüneberg mobile: phone: fax: web: 43

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