5 Things That Are Wrong With Your Product’s Business Plan

Love ‘em or hate ‘em, business plans are a part of every product manager’s life. They should be a part of every company’s product development definition. Because we can’t do it all by ourselves, we need to make use of funding and resources from the company. In order to get what we need, the company insists that we tell them what we’re going to be doing. That’s where the product business case comes in. However, no matter how much time and effort you put into creating one of these things, it will all be for naught if you are making the following 5 mistakes.

5 Business Plan Mistakes That Product Mangers Make

It’s not easy to write a good business plan. Where product managers seem to fall down is when they spend their time writing a business plan that they would like to read – not one that the rest of the company wants to read. If you want to be able to add this skill to your product manager resume, then you’re going to have to become better at doing it. Here are 5 mistakes that we product managers should be careful to avoid when we’re creating our next business plan:

  1. What Problem?: I love technology and I’m sure that you love technology. If you spend your business case writing about the fantastic technology that your product will use and you don’t discuss the customer problem that it will solve, then you’ll be missing the point. A business plan needs to lay out a clearly defined problem and it needs to identify which customer group has that problem.
  2. It’s A Big Market: Often Product Managers just end up saying that the market that they are going after is huge and even if the product ends up just capturing a little bit of it, they’ll do fine. The classic case in the past few years has been products that you want to sell in China – there’s so many people there that there’s no way that my product can fail! The problem with this approach is that it’s actually very hard to make customers aware of your product and then to get your product to them. You may not be able to capture even that small slice of a big market.
  3. Excel Magic: Just because your product is a dog, doesn’t mean that you can’t create fantastic Excel spreadsheet that show just how much money it’s going to make! Look, if the product isn’t going to fly, no amount of financial smoke and mirrors is going hide this fact, so don’t even try.
  4. Dream Team: No product management team has all of the skills that are going to be required to make the product successful. Every team has gaps and your business plan needs to be honest about this. You’ll eventually have to do some work and fill in the gaps. You need to let everyone know that this is a task that you know that you’ll have to do.
  5. No Problems Here: Any business plan that is too optimistic is instantly suspect. Launching and managing a product is hard, there will always be challenges. When you are creating your business plan you need to be upfront about the issues that you are going to be facing. The folks who will be reading your plan will be able to guess some of them and so you may as well let them know that you know.

What All Of This Means For You

In order to get the funding, staffing, and resources that you are going to need in order for your product to be a success, you are going to have to write a business plan. This skill should be a part of every product manager job description. This is how you are going to tell the rest of the company just exactly what you think that you can accomplish with what they give you.

The problem with creating a business plan is that it is all too easy to do it incorrectly. Simple mistakes like talking about technology, not the problem or assuming that you’ll certainly be able to grab at least a portion of a very large market are rookie business plan mistakes that no product manager should make.

Take the time to create a well thought-out business plan. After you’ve created it, sit back and take a careful look at it and see it through the eyes of someone who isn’t so close to your product. By doing this you’ll catch the issues that could delay you’re getting the resources that its going to take in order for your product to be a success.

Commercial Loans – Take All Aspects In Consideration

As the saying goes, taking a loan is easier than surviving with it. A shrewd businessman is one who borrow but with an eye to repay it as soon as possible. Sometimes, business requirements arise because you get a new business order hat is hard to manage within your own business funds. You obviously cannot afford to lose big business opportunity only because the funds are not there.

These and other similar situations force you to take help of external sources of financing. These sources may be temporary or permanent, depending on the nature of funding. Large body corporate often have huge financial needs, and therefore, they resort to public financing by inviting deposits or going for a ‘rights issue’ meant for the existing shareholders. On the other hand, a new business concern or sole proprietorship undertaking would obviously not be able to take benefit of that sort – neither are these meant for them.

Before applying for commercial loans, first of all decide the type of debt financing that your business firm will be comfortably able to get. If you do not own any property in the name of firm, secured commercial business loans are out of question. You will have to rely on loans that do not require any security. These loans will offer you a limited amount – upto £25,000. The interest rate is likely to be little more than what you can get by pledging some property. The amount of loan that you can qualify for can be increased by involving some property in the loan transaction.

Product Marketing for the 21st Century

Marketing by definition is all about reaching out to the consumers through targeted messages and by positioning the product based on the pricing, promotion, distribution elements of the marketing mix. Further, the marketers must be able to glocalize or adapt the global brands to local conditions to leverage upon the market power of the specific regions and countries. Further, marketers have obligations towards the consumers and hence must follow ethical norms. Finally, marketers must also be in compliance with the legal and regulatory rules and procedures in vogue in the specific markets that they operate.PricingPricing affects the marketing of a product as it determines the consumer segment that is likely to buy the product. For instance, it is common for marketers to segment the market according to the price range that they are selling the product in. There can be lower priced models for the lower end of the segment, medium priced models and finally, the premium or the upper end models for the upper crust of the market. Pricing is important because it determines the discovered value of the product and can be either undervalued or overvalued leading to the product getting sold in abundance or otherwise. Finally, pricing affects the bottom line of the company since it is the direct determinant of revenues. It is for these reasons that pricing is an important variable in the marketing mix (Blois, 2007, 42).PromotionThe way in which the product is promoted determines the extent to which the marketing campaign is successful in its scope and reach. For instance, targeted promotion at specific consumer segments means that the message that is intended to be sent because of the promotional campaign would be heard in the correct context or not. Successful advertising also impacts the bottom lines of companies since they determine the sales of the product. Finally, promotion is important because without advertising or word of mouth publicity coupled with point of sale promotions, it is difficult for marketers to get their message across and make sure that consumers absorb the message that is being conveyed. It is for these reasons that promotion is considered an important variable in the marketing mix (Egan & Johnson, 2008, 17).DistributionThis variable is usually not given the importance that it ought to be accorded by marketers. The point about distribution being important is that availability and accessibility of the product determine to a great extent how successful it would be in the real world market. For instance, when the latest version of the Apple iPhone 4S debuted recently, the outlets were not stocked with enough products leading to wait times by the consumers making them switch over to substitutes or alternatives. It is for this reason that many marketers design the distribution channels first and then plan their marketing strategies so as to leverage upon the synergies that would accrue from the combination of distribution channels and advertising. Further, many marketers test the products’ applicability and desirability in the market by rolling out test launches in select regions which would ensure that the products and their relevance to the market can be gauged by measuring the response (Kotler & Armstrong, 2010, 80).Marketing in International MarketsAmong the pricing, promotion and distribution elements to be considered for international markets, the following specific elements must be taken into consideration: The pricing must be done based on the local purchasing power determined according to the PPP or Purchasing Power Parity. Next, the promotion must be done in such a way that it is a combination of global brand appeal tailored to local conditions or “Glocal” in approach. Finally, the distribution must take into account the varying needs of the global supply chain and its success would depend on how well the company taps into the specifics of the local market. The point here is that when marketing to international markets, attention must be paid to the fact that there is a need to understand the local conditions and hence blind application of global strategies must be avoided. This means that a “Glocal” approach where the global strategies are adapted to local conditions must be followed so that the product is successful in the local markets.Ethical ConsiderationsThe primary ethical consideration that marketers ought to consider is whether the product being marketed or advertised is according to the normative rules of conduct like not targeting inappropriate advertising at children or using props or visuals that might be offensive to certain groups. The point here is that marketing by definition is all about winning the hearts and minds of consumers and to achieve this, the ethical norms must not be sacrificed. Given the fact that many marketers use messages that use stereotypes, they must be considerate towards minorities, disadvantaged sections and other groups when designing their marketing strategies (Constantinides, 2006, 418).Effect of Legal and Regulatory RequirementsThe legal or regulatory requirements that affect the marketing function include compliance with local labor laws and policies dealing with specific conditions under which the marketers operate in a given market. The fact that each country and region has separate laws for marketers to obey means that they should not only be cognizant of these laws and regulations but also be in compliance with them. It needs to be remembered that punitive action by the regulators impacts the product’s brand value apart from entailing costs that might have to be borne by the companies in marketing the product (Hassan & Submission, 2003, 140).ReferencesBlois, K. (2007). `Business Customers’ Behavior – A Challenge for the Relationship Marketing Concept?’ Journal of Business Market Management 1(1):41-58.Egan & John (2008). `A century of marketing’. The Marketing Review 8(1):3-23.Kotler, P. & Armstrong, G. (2010). Principles of Marketing (12th Edition) (Principles of Marketing). Prentice Hall.Hassan, S. S. & Submission, H. C. (2003). `Global marketing eviews’. Journal of Global Marketing 6(3):139-142.Constantinides, E. (2006). `The Marketing Mix Revisited: Towards the 21st Century Marketing’. Journal of Marketing Management 22(3):407-438.