A product’s lifecycle neither starts nor ends with development. For a product to thrive in the market, product teams must set a clear direction for all product-related activities, from development to marketing to customer communication. Effective product management will maximize a product’s value and ensure a successful product life cycle.
In a nutshell:
- Product management is an organizational function concerned with overseeing a product through its life cycle
- Areas of responsibility that fall under product management include product strategy, market research, team management, stakeholder communication, development management, product launch, pricing, and performance tracking
- Product management differs from project management in that it is an ongoing process concerned with maximizing the value of a product. Meanwhile, product development and product marketing are organizational functions that product management oversees
What is product management?
Product management is the process of strategically directing all activities involved in a successful product life cycle, including ideation, development, marketing, and launch. Product managers set the direction for a product’s development and launch and then ensure that the team completes all related tasks efficiently within set goals and constraints.
Successful product management ensures that released products align with customer needs and business objectives. By incorporating customer behaviors into product strategy, product managers give their products a stronger chance of capturing the market.
The 8 functions of product management
Product management encompasses multiple areas of responsibility, including strategy, research, team management, development, launch, pricing, performance tracking, and stakeholder communications. All functions must work in tandem to ensure a successful product life cycle.
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Product strategy
Product management sets the vision for an upcoming product by defining its main value proposition, key features, and the problems it aims to solve.
Product management also involves building a strategy that ensures successful development and launch. Part of this process is creating a product requirements document that identifies all tasks and resources required to complete the product.
After identifying all necessary requirements, product management teams would build product roadmaps to visualize product objectives and progress. They would sort tasks by priority and create timelines for development and release.
Market Research
Market research is a core part of product management. For a product to succeed, the product management team must establish a strong product-market fit. This involves gathering data on customers, competitors, and other market factors that might affect the product’s selling power.
Team management
Product management also involves managing teams. Product managers need to ensure that all team members are aligned on company and product objectives. They might also liaise between the engineers in charge of developing the product and the stakeholders or business people in charge of the product vision.
Stakeholder communication
The product management team must ensure that stakeholders are satisfied. They incorporate stakeholder objectives into product planning and regularly communicate progress.
Development management
Product managers must ensure that developed products are technically sound and align with company objectives. They must also ensure the development team appropriately allocates resources and releases deliverables on time.
The product management process also involves setting up tests to validate product concepts. They might gather stakeholder or customer feedback and incorporate findings into plans for future product iterations.
Pricing strategy
Determining how much a product should sell for is a product management responsibility. This area of responsibility encompasses non just a product’s initial price but also building strategies for discounts and promotions. Effective pricing strategies put the product in a solid position in the market while maximizing potential profits.
Product launch
Product launches also fall into the realm of product management. Product managers are in charge of building strategies for successful product launches. This involves figuring out how to introduce a product into the market, increasing scales, and scaling according to demand.
Performance tracking
Product management teams must ensure that products are continuously improved upon after launch. They might track KPIs set during the planning stage and gather customer feedback. They would also plan strategies for incorporating the information or feedback they receive.
Managing the 4 stages of a product life cycle
Once development is complete, products move through four stages: introduction, growth, maturity, and decline. Below, we discuss the specific ways product management provides guidance for each stage.
1. Introduction
This stage introduces the product to the market. Profits are typically smaller due to the initial lack of customers and the upfront costs of research, development, and marketing. The product management team’s main priority is raising awareness for the product and generating demand.
At the introduction stage, the team should dedicate its resources and attention to product marketing efforts. Because the target market is not yet aware of the product’s existence, getting the product off the ground requires heavier investment in promotional materials that effectively communicate the product’s value proposition.
The introduction stage is also the time to confirm product-market fit. Accurate assessments of demand early in the product’s lifecycle help teams reduce risk; if demand is lower than projected, they can pull products off shelves instead of spending on further development.
Conversely, spotting high demand early gives teams the time to better plan for growth.
A cost-conscious team might first introduce minimum viable products to validate the product concept. This strategy allows them to collect customer insights without spending too much on development.
For example, in its initial stages, the communication software Slack took a hands-on approach to product marketing. The organization reached out to individuals in their network and convinced their teams to try Slack in its beta release.
A core part of their marketing strategy was to prioritize customer complaints. They responded quickly to customer tickets, which achieved two things. First, it allowed Slack to gather data on how to improve the user experience. Second, it proved to customers that the company was concerned about their satisfaction.
Proactive listening at the introduction stage helped them build a loyal user base and a better product.
Understanding customer behaviors is a critical part of the introduction stage. Product teams must identify why customers buy their products, what benefits offer the most impact, and what aspects prevent smooth user experiences. This data helps product teams ideate improvements for future product interactions, enhancing customer satisfaction and boosting user retention.
2. Growth
During the growth stage, increased public awareness and decreased marketing and development spending lead to higher profit margins. However, competition is also heavier.
Once a product’s novelty wears off, early adopters might return to solutions they were familiar with. Having a hypothesis validated at the introduction stage might also invite copycat competitors to capitalize on the same market share.
Therefore, the product team should direct most of its attention to edging out competitors, accommodating increased demand, and maintaining growth.
For example, once Slack gained enough traction in the B2B SaaS market, it needed to differentiate itself from Microsoft. One of its strategies was to have the New York Times publish an open letter to Microsoft, highlighting the core selling points that made Slack unique, namely extensive third-party integrations and efficient and personalized customer support.
It also outlined the diversity of their clients' industries, proving the software’s flexibility.
Differentiating the product from competitors like this will reduce the likelihood of existing customers seeking alternatives. It will also make the product more attractive to potential buyers. Here are a few strategies product teams use to set products apart:
- Iterating product improvements that competitors lack
- Launching marketing efforts that highlight a product’s unique offerings
- Adjusting pricing strategies to undercut competitors
Other growth stage priorities include retaining customers and attracting untapped markets. Teams must study how their customers interact with the product to understand which features provide the most impact.
By continuously incorporating this feedback into new product iterations, they can keep existing customers satisfied. Satisfied customers, in turn, recommend the product to people in their circles.
Increased demand means an increased need for labor and resources. Product teams should closely monitor growth and scale production accordingly.
3. Maturity
Once your product reaches maturity, more competitors will have time to introduce new solutions and capture the product’s former market share. Demand plateaus in the now-saturated market. The product team’s prime focus should be retaining customers and reducing production costs. They might also attempt to reignite interest by adding high-impact innovations.
Retaining customers is about nurturing relationships. Again, understanding customer behavior is crucial; product teams must identify which product features drive customer usage. Improving these features takes priority when developing new iterations.
Product teams might also create new efforts to reward customer loyalty. This means adjusting prices or making promotions specific to existing customers. Because attracting new customers provides less return on investment, product teams can shift their attention to existing customers, increasing their satisfaction through preferential treatment.
To help you better visualize what might happen, let’s go back to Slack. At present, Slack is still in the growth stage. The company currently has 38 million daily active users and an 18% market share in the business communication software space. It shows steady growth and gains approximately 10 million new users per year.
Should Slack approach maturity, it would likely concentrate its efforts on making the app as easy to use as possible. They will continue prioritizing UX and customer service. Should alternatives encroach on its market share, it can try to adjust pricing strategies to convince users to stay.
Since profits can no longer increase through added revenue, product teams must focus on reducing production costs. This means trimming out any operational functions that provide little value.
4. Decline
Product sales decline once the market becomes overly saturated. At the decline stage, marketing efforts might produce little to no return on investment. Product teams must identify the main cause of sales tapering. Doing so allows them to determine the next course of action: innovate or abandon?
Like with the maturity stage, product teams in the decline stage can identify key features that resonate with customers and invest in further development. They might nurture relationships with existing customers or call on former customers by offering special deals.
However, if user retention is unlikely, product teams might analyze their existing technology and research suitable markets. They might restart the product management process entirely by building new ideas based on the old product.
Because Slack has yet to decline, we have to revisit the company’s past endeavors to provide an example of a product in decline.
Slack itself was a result of an abandoned product: the software’s skeleton was pulled from the internal chat system of a 2011 multiplayer Flash game called Glitch. The game struggled to grow a player base due to Flash’s falling popularity in the age of mobile games.
To transition their remaining players, the founders published a web post announcing the official closure date. The post contained instructions for getting refunds and a FAQ explaining the reasons for the shutdown. The founders also kept forums open for a limited time to let players find their friends outside the platform.
Finally, they studied what part of their product could be salvaged. They took the game’s internal chat system and repurposed it to create the business communication software now known as Slack.
However, know that if neither retention nor innovation is possible, the product team must cut their losses and abandon the product. The process involves reaching out to existing customers and making the transition seamless.
Product management vs. related concepts
Product management vs project management
Product management is a broad term that encompasses all activities related to ensuring a successful product life cycle. Meanwhile, project management is a discipline that aims to provide structure and guidance for executing a time-bound effort.
Product management is an ongoing process that is maintained as long as a product remains in the market, while project management ends after a designated closing period.
Not all projects are product-related. However, project management efforts can be used to provide structure for an objective within project management.
For example, overseeing the development and launch of a mobile application would fall under product management. Meanwhile, redesigning the mobile application’s user interface before a deadline would fall under project management.
Product management vs product development
Product development is a focused area of responsibility within product management. It is primarily concerned with building a functional product. Meanwhile, product management is concerned with maximizing the value of a product by ensuring that it sells, satisfies customers, and meets business objectives.
An example of a company with successful product development but unsuccessful product management was Kodak. The company produced a strong line of film cameras but failed to maintain relevance in a market that began to prefer digital.
Product management vs product marketing
Like product development, product marketing is a focused area of responsibility within product management that focuses solely on promoting the product to potential customers. Meanwhile, product management is also concerned with ensuring that the product aligns with customer needs and business objectives.
Product management follows a product through its entire life cycle, from inception to launch. Meanwhile, product marketing responsibilities only emerge once the product is built.
For example, conducting market research to identify customer pain points before building a product falls under product management. Meanwhile, creating promotional materials for an existing product would fall under product marketing.
Common project management tools
The following tools can aid the product management process.
Project management software
Project management tools help teams stay on the same page. They act as centralized locations for all company objectives, projects, and tasks. They also allow easier visualization of task prioritization and project progress.
Most project management tools offer the following:
- Planning visualization tools
- Task management systems
- Reporting tools
- In-app comments
- Progress reports
- File sharing
Shortcut’s project management software is highly suitable for product teams. It offers customizable project dashboards, product backlogs, real-time metrics and insights, and integrations with other product management tools. For more information, refer to our Shortcut for product teams page.
Cloud storage
Product teams rely on cloud storage to share files efficiently. Not only do cloud storage tools allow team members to send, receive, and organize files in real time, but they also make files easier to locate. They act as repositories for product-related files, including deliverables, assets, resources, and documentation.
Examples: Google Drive, Dropbox
Digital analytics software
Digital analytics software is helpful for product teams working on websites, apps, or software. They collect data on how customers interact with a digital product. Examples of metrics digital analytics software track include:
- Customer acquisition: number of new users
- Engagement: daily active users, session duration, and feature usage
- Retention: bounce rate, retention rate
- Monetization: average revenue per user
Product teams use this information to map out the user journey, understand how and why features resonate, and identify areas of improvement. The metrics are helpful for planning future iterations.
Examples: Google Analytics, Amplitude, Adobe Analytics
Survey platforms
Survey platforms are essential for product teams that value customer feedback. They can be used for market research at the product initiation stage or for gauging customer satisfaction after product launch.
Combined with digital analytics, surveys provide a clearer image of what customers feel about your product. If digital analytics tools show you what they do, survey tools tell you why they do it. Effective survey questions provide a clear direction for future product improvements.
Examples: Google Forms, Survey Monkey, Typeform
Communication apps
Product teams comprise a wide range of experts, including managers, engineers, designers, and marketers. A centralized communication app helps everyone stay on the same page and delivers messages in real time.
The best communication apps let teams organize communication channels. Dividing communication into channels, group chats, direct messages, and threaded discussions helps team members keep better track of any information exchanged.
Examples: Slack, Microsoft Teams, Discord
Summary
Building a product is one thing. Introducing it to the market and ensuring that it sells, satisfies customers, and achieves company goals is another. Effective product management ensures you get the most value from your product by ensuring that all product-related activities — including ideation, development, launch, and marketing — follow a strategic direction.
Shortcut is here to help you streamline product management. The project management software aligns company objectives with day-to-day tasks and gives you visibility on progress, health, and results.
Check out the Shortcut pricing page to see all available packages.
