I have a chapter titled "Product Management" in my book Business Fits. At first thought product management seems to be a simple job. All you need to do is provide your customers with the products and services they want, but maybe this is not as simple as it seems.
I recently was looking for a nice warm woman’s robe for a Christmas gift. I would think this is a common Christmas gift so it should be easy. Wrong. There was a specific request that presented a problem. The robe needed to have a zipper front and not have a belt or tie.
Macy’s, Younkers, Kohl’s, Herbergers, Penney’s, and Sears were all checked. They all had large quantities of warm robes with wrap fronts and ties but none with zippers. This is terrible product management. What is wrong with the store buyers? Were they all fed some kind of Kool-Aid to make them all buy the exact same product.
Maybe the store buyers just bought what they liked personally with no market research. Making decisions based on personal perceptions is one of the greatest mistakes in business. This was one of the primary reasons I wrote Business Fits. Entrepreneurs looking to buy or start a business frequently make this mistake. The good news about the poor product management by large companies is that it provides great opportunity for small businesses that are willing to take a gorilla or flanking marketing approach.
When I was a Ford-Mercury dealer in the early 70s, Ford introduced the Granada. Ford made a big deal of the dealer introduction with a national show for dealers in Las Vegas. When I walked into the convention hall, it was like black-tie night at the annual auto shows. There was a lot of glitz, glamour and girls. The featured Granadas were all the fancy Ghia models with a vinyl tops and lots of options. As we walked around looking at all the cars, my wife pointed to a car stuck in a corner and said, “I like that one”. The car she was pointing at was a plain four-door sedan. It was plain, but it almost had the look of a Mercedes.
When I got back to the dealership, I started doing my market research including checking out what Granadas my competitor dealers were ordering. They were all ordering the higher priced Ghias featured in the Las Vegas introduction. I ordered the lower priced base model with a minimum of options. I was heavy on four-doors, but ordered a few two-doors. Some two-doors with equipped with manual transmissions for the youth market.
When the Granada was introduced to the public, I was the only dealer in my area with a good inventory of the lower priced models that were very desirable to a large segment of the market. I had competing dealers calling every day wanting to make a dealer trade for a lower priced Granada. I was pretty protective of my inventory as it gave me a significant advantage for a specific segment of the market.
Poor market research and the resulting poor product management by larger competitors can give a small business a significant advantage in a specific segment of the market. Don’t try to be everything to everybody. Even huge corporations fail when they try to do this. I did a blog on J.C. Penney and possible irrevocable errors they made when they got away from their core customer. See Business Fits at: http://businessfits.com
I wish you all a happy, healthy, and prosperous 2014.