A seminal, and “must read” for all in product management is the classic tome: “Marketing Imagination” by Theodore Levitt. While it was last published and updated in 1986, and thus misses the internet revolution, its themes and treatment remain as relevant today as when it was first published.
I first picked up a copy of this book after taking the excellent course on Technology Marketing, by Chris Halliwell who was working with the Industrial Relations Center at CalTech. Alas, the IRC is no more, and Chris’ work lives on through her Technology Marketing Center offerings (disclaimer: I still occasionally blog for the TMC).
Ted Levitt was a professor at the Harvard Business School, and more importantly a long time editor of the Harvard Business Review, so he had a deep exposure to the leading edge of management thinking and thought. Ted’s focus was on marketing and strategic marketing, and that comes through well in this book.
Continuing on the theme of pricing, one of the core concepts that product marketers and product managers instinctively understand, whether they acknowledge it or not, is the concept of economic value.
We are commonly concerned with creating value by prioritizing our development to focus on features of capabilities that increase the intrinsic value to our target segment(s).
Yet, how to quantify this value, and then identify how to capture it? It is probably best to go back to the basics, and to define some terms.
The first relevant term is the reference price. In a competitive market, this is the price at which a customer can reasonably purchase a product that is comparable. This is also called the next best competitive alternative price (or NBCA price). I like this as it has a direct analog to the concept of Whole Product. You can also call it the “table stakes“.
Continuing in the vein of product backlog prioritization, there are a few practices that can help bring order to chaos. While there is no single method of tracking the backlog items, and in fact there are several excellent tools that can be used, these suggestions can even be applied to a backlog maintained in an Excel (or Google Docs) spreadsheet.
I like to see two attributes that are calculated to establish a weighted ranking. The first is a triage, really a segmentation of features or stories into must, want, nice, and forget about it. This is your first “dimension”, and one that should be easy (but can be quite contentious).
Five little words. “That feature doesn’t sell products“. Seems innocuous enough, but it is the death of product development when uttered by engineering.
Product Management is tasked with defining what a product should do, what features are needed, and how to compare/differentiate vis-a-vis with the competitors. We write requirements, and guide them into and through the development process.
All to have engineering remove features that they don’t believe drive value. Unfortunately, engineering often isn’t cognizant the concept of “whole product“. That beyond the core widget are the services and traits of the product that extend the offering, and provide the unique value proposition, thus enticing the customer to choose to purchase your product or service.