What Is Product Management? Definition, Strategy and Steps

Product management is a cross-functional and lucrative career to consider if you're interested in a company's product development process. Understanding what's involved to move a product through its development, growth and success can help you determine if this is the right career path for you. In this article, we explain product management and product management strategy, the role of a product manager and key steps for effective product management.

What is product management?

Product management is a company's organizational function that handles a product's life cycle. This includes the development of new products as well as the planning, production, pricing, marketing and final product launch. Product managers aim to develop a product that is better or different from the company's current offerings, which ensures the new product is valuable to its target audience.

What is a product management strategy?

A product management strategy is a plan that guides a product's developmental process by focusing on customer needs and the company's goals and overall vision. Here are the essential elements of a product management strategy:

• Customers: Product managers need to understand who their target customer is, what they want or need and how to get products to them. It's important for product managers to consider customer feedback and adjust their strategy accordingly. They also need to adapt to changes in public perception and the current marketplace.
  

• Competitors: Product managers need to make a product that is different and unique compared to similar products competitors are offering. To be most effective, a product management strategy needs to fill a gap in the market by providing a product that serves its customers in a way that its competitors aren't addressing.
  

• Profitability: Product management strategies also need to take into account how new product offerings or product lines can generate a profit and help achieve company goals. When a strategy takes this into consideration, the product has a greater chance of gaining success and benefiting the company.
  

• Macro environment: The macro environment encompasses trends in the economy, technology, politics and culture. These factors can influence a product's impact and profitability. An effective product management strategy needs to address how the macro environment influences the target audience's needs and behaviors.

Related: How To Become a Product Manager: Required Qualifications

What does a product manager do?

Product managers are cross-functional leaders who coordinate all the tasks required to bring a product from conception to the market. They plan the product or product line's development and implement a strategy for its successful execution. To do this, they analyze market needs, customer demands and competitor offerings.

The strategy a product manager uses depends on the organization and its target customer. To create an effective strategy, they consider who their target audience is, how the new product will fair in the current market and how it can help achieve the company's overall goals. This ensures new products have a lasting impact on not only a company's business but its customers as well.

Here are the main responsibilities of a product manager:

• Conduct market research to understand customers and competitors.

• Develop strategies for new products that address company goals, customer needs and external influences.

• Plan project timelines that address when a product reaches each developmental phase from inception to completion.

• Create a product vision and communicate plans and strategies to key stakeholders, including investors, the product development team and company executives.

• Maintain a product roadmap and ensure it is followed or updated as needed.

• Coordinate a product's developmental process to relevant teams.

• Interpret feedback from customers, perform data analysis to improve future product management strategies and relay findings to relevant teams.

Related: Learn About Being a Product Manager

What skills do you need for effective product management?

To perform product management effectively, you need a certain set of skills, including the following:

• Communication: This skill includes general and role-specific writing abilities, interpersonal conversation, public speaking and active listening. The role of a product manager requires strong communication skills to collaborate with other teams and share ideas with stakeholders.
  

• Technical skills: Effective product management may require you to help your team understand technology trends and technical challenges. Technical skills also help product managers understand the functionality of their products.
  

• Leadership: Leadership skills refer to your ability to oversee and manage a group of people. Product managers are responsible for providing guidance, promoting collaboration and facilitating communication across the company's engineering, marketing, sales and support departments, along with other teams as needed. Their cross-functional leadership skills also help them develop strategies and ensure their execution.
  

• Problem-solving: Product managers apply logical and analytical thinking when solving a variety of problems related to a product's development, often under shifting or impending deadlines.
  

• Creativity: These professionals must look at tasks, strategies or problems in a new way so they can guide their teams in developing innovative products and methods for product marketing.

Product management steps

Product management involves two main ideas—product development and product marketing. Within these aspects, there are certain steps to follow in the product management process. Here is a comprehensive and ordered look at the various steps.

Product development

Product development comprises everything having to do with a new product or product line's ideation and growth. These are the steps within product development:

1. Market research: The first step of product development involves determining a suitable market fit for a company's product or product line. For example, if you're creating a new line of sweaters, it's important to consider what the current clothing trends are, the weather and what customers want from this article of clothing.
   

2. Product strategy: The next step is to create a strategic plan for a product's release that addresses a target audience, competitor offerings, profitability and the macro environment. For example, if your competitors aren't offering a certain style of sweater for teenagers, you might strategically think about how to fill this void in the market.
   

3. Product development: This comprises a product's design, product testing and final revisions for product completion. Using the sweater example, its development involves acquiring the materials, designing it, testing its functionality and making modifications as needed.
   

4. Product launch: A product launch is the development and execution of a product management strategy. Once a product has passed through the developmental process, it is ready for public release.

Related: What Is Product Development Strategy?

Product marketing

Product marketing deals with the customer-facing aspects regarding product sales. These are the steps within product marketing:

1. Branding and promotion: Companies create a brand and promote a single or line of products most commonly through print and digital advertising. Once you create a product, the marketing team must establish its brand to better target its customers. Then, they can promote the new product by informing the public about it and persuading them to buy it.
   

2. Pricing: This involves setting a strategic price for a new product that covers production costs and generates revenue. For example, companies may consider setting their product at a price that is slightly lower than their competitors to entice customers.
   

3. Distribution: The next step is the delivery of products from a company to its customers. It also involves the management of product sales. Product managers need to ensure their products are reaching customers by having them available online or in stores.
   

4. Sales: This involves finding sales opportunities and closing product sales. Product sales help drive a company's revenue. The more sales a product makes, the more successful the product and the company will be.
   

5. Customer experience: This involves managing all aspects of a company's customer service experience and satisfaction. Companies need to ensure that customer questions and concerns are answered promptly and efficiently.