What is product management?Product management is a process that focuses on bringing a new product to market or developing an existing one. It starts with an idea of a product that a customer will interact with and ends with the evaluation of the product’s success. Product management unites business, product development, marketing, and sales. Studies show that effective product management can increase profit by 34.2 percent proving the importance of its implementation.
One of the critical activities of product management is creating and documenting a product strategy, the process so broad and important that we described it in a separate article.
Here's our video explaining the main things in under eleven minutes:
Don't forget to subscribe, we'll keep on explainingProduct management is led by a... product manager. Don't confuse the role with a project manager. A project manager is responsible for a single part of a product life cycle - product development, while a product manager's responsibility is to lead a product from the germ of an idea to launch, focusing on features, business value, and the customer. Read our full comparison of product managers vs project managers in the dedicated article.
We’ll describe the role of a product manager in more detail further on, but now let’s look deeper into the product management life cycle.
Product management process and key activitiesTasks in product management cascade from strategic to tactical. The whole process of product management involves
- Vision development,
- Customer understanding,
- Strategy development,
- Product development,
- Marketing and sales, and
- Metrics tracking.
Inbound activities focus on product development and include defining vision and strategy, product development, testing, and launch.
Outbound activities are oriented toward the marketing of a product and its sales. This includes branding, sales, and analysis of customer feedback.
Inbound and outbound product management activitiesTo get a complete understanding of the process, let’s discuss each of the product management stages one by one.
Vision developmentProduct vision is a significant part of product management. If we were to compare product management to a road, the vision is both a road sign and a destination. It defines the final product and shows the direction towards achieving it. It’s not a strategy of product development yet, but this is where the strategy development starts with idea management when a team discusses a new product. The vision can be articulated during a brainstorm or may be based on a backlog of ideas.
When developing the vision, a product manager sets the goals for the product and defines specifications. A well-specified product vision answers the following questions:
- What is the user persona (personas) for the product?
- Which problems will the product solve?
- How can we measure the success of the product?
Product vision statement template. Source - ProdPadGeoffrey Moore also recommends keeping the vision short. As he puts it, “If one cannot test the product vision with an elevator pitch, then it is not ready yet.” For example, Amazon's vision is “to be Earth’s most customer-centric company, Earth’s best employer, and Earth’s safest place to work.”
Market research and customer understandingMarket research is a process of information collection and analysis of the market and its present or potential customers. It comprises comparing similar products that already exist, studying the competition, and identifying target customer groups.
Obviously, knowing your customer is a basis for creating a successful product. 76 percent of consumers expect companies to understand their needs. Moreover, 84 percent of companies that focused on improving customer experience reported a revenue increase.
As mentioned above, a product manager in cooperation with the product marketing manager conducts various research to get a deep understanding of potential product consumers. This process includes several perspectives:
Creating user personas means describing fictional characters that represent the user types that can have interest in the future product. In other words, a portrait of your ideal customer. User personas can include such information as age, gender, education level, average income, life goals, common problems, spending habits, etc.
Example of a user persona, source: CleverTapIdentifying customers’ needs is the only way to create and deliver the product that will be in demand. Besides defining specific problems and necessity for a specific product, customers can be classified into groups according to their 4 main needs: price, quality, choice, and convenience.
Studying customer behavior involves understanding your target customers’ psychology and motivations. That includes knowing how they reason and choose between different alternatives, how they conduct research, how they are influenced by their surroundings, how they react to marketing campaigns, and much more.
Market research can be made by a company (primary research) or taken from an external source (secondary research).
Secondary research involves already produced data that can be found in statistical databases, journals, online sources, etc.
Primary research is adapted to a company’s needs and can be either qualitative or quantitative. Qualitative research focuses on defining problems and relevant issues. This incorporates personal interviews, group surveys, and focus groups. Quantitative market research is based on data collection and statistical analysis. It allows a product manager to reach a larger audience and gather general information, while qualitative research provides insight into a problem, identifying wants and needs, as well as possible pitfalls.
Types of market research. Source: Product coalitionMarket research is important for new product development, both at the stage of execution and the stage of marketing and sales. With its help, a company can understand what customers want and develop a strategy that will allow for making a successful product.
Strategy developmentOnce you have the vision, know the market, and understand customers’ needs, a specific product strategy has to be formulated accordingly. While a vision defines the goals for a product, strategy describes a way to achieve them and sets main milestones. This must be a clear and realistic plan for the team that works on a product.
An effective product strategy defines the main features of a product, users and their needs, and key performance indicators (KPIs) that the product must meet.
Elements of the strategy. Source: RomanpichlerProduct strategy is typically documented in a written roadmap form that would allow a team to control the work at all stages. A roadmap is a tool that provides a framework for a team with a timeline and specific actions, illustrates the vision, goals, and the current state of product development.
Here, we explain a product roadmap in a nutshellOr you can read our dedicated article, if you want to learn more about strategic roadmaps, their types, and how to build one.
A good roadmap is clear and serves as a visual guideline for all members of the team. Regardless of the specific roadmap structure, it must depict the current state of things and the next steps. There are different roadmap templates and their formats depend on the number of products (a single or multiple product roadmap) and aspects of product development (goal- or feature-oriented). However, any roadmap must group the items by the sequence of their implementation. Roadmaps can also be internal or external.
Theme-based roadmap. Source: ProdpadInternal roadmap. An internal roadmap is used on a company level. It shows the vision, short- and long-term goals, as well as connected processes. Teams that work at different stages of product development can track the timeline and stay aware of the upcoming actions. A product manager and a CEO use an internal roadmap to control the progress.
External roadmap. An external product roadmap is usually less complicated and is created for stake- or shareholders, potential and existing customers, investors, etc.
Buffer public roadmap, source: TrelloPrioritization is an important responsibility of the product manager at the stage of roadmap preparation. The objectives, aims, and activities must range from the most to the least important.
When the strategy is ready, the product manager has to communicate it to the product team and the stakeholders. A product manager has to be focused on customers and stakeholders at the same time. And though a customer always must be a product manager's priority, maintaining efficient working relationships with stakeholders is also important.
Stakeholders have a large influence on product development, being able to cut the budget, or change the timeline. They can suggest implementing product features they find necessary and important, but which are completely useless to users. The product manager's task is to communicate strategy to stakeholders to ensure common understanding of the vision.
Execution and testingDuring the execution stage, a product team works on the product itself. They build a new product or add new features to an existing one. Main phases of this stage are product development, internal and external testing, and the application of feedback results. All along the execution stage, a product manager controls the implementation of the roadmap and participates in accompanying activities.
Product development. Product development starts with defining technical specifications, making first prototypes, and a mockup design. While these activities are normally covered by the UX team, a product manager can be involved in writing technical specifications. The product manager's main goal is to identify what the users want and communicate this information to the development team and project manager.
For this purpose, he or she conducts focus-groups and personal interviews with potential customers. Results of these activities allow a product manager to prioritize the necessary and unnecessary features. He/she writes product related documents, for example, a Product Requirement Document (PRD) and Functional Specifications Document (FSD). Learn more about software documentation practices in our dedicated article.
MVP release and external testing. One of the core responsibilities of a product manager is to define the minimum viable product (MVP) and make sure it serves its purpose. When the MVP is released, a product manager sets up a feedback collection mechanism, gathers the feedback, and alters product requirements based on user input. Actually, 60 percent of product managers admit that their best ideas came directly from customer feedback.
A/B testing is one of the most common evaluation techniques. The main idea behind the practice is to choose the product features that are more useful to the customers or enable higher customer engagement. A product manager defines testing scenarios in cooperation with a UX specialist, tracks results, and communicates the changes to the project manager and/or development team.
To test product usability, user acceptance testing (UAT) is conducted on different development stages. UAT helps analyze how users interact with the product, discover flaws, check for agreement with business requirements, and so on.
To conduct successful tests, a product manager sometimes develops a relationship with potential customers making sure that they will be honest about the usability of a product. While testing, the user reaction and the customers’ feedback are analyzed. When the results are ready, a product manager has to convey them to a project manager, so that the developers can prepare the software for launch or introduce changes to the existing product.
Marketing and SalesOnce the product is completed, it’s time for it to enter the market. At this stage, marketing and launch plans have to be finalized, and the sales teams trained to start distribution. The 3 important aspects of a successful product launch are
- building customer awareness with the help of various marketing campaigns and promotional activities;
- defining pricing strategy based on the product’s value and market competition; and
- choosing the most effective release timing considering customer readiness, performance of other existing products, competitors’ launches, etc.
Through the whole process, the product manager delivers an operating plan, which aims to track the growth of a product in the market. We are going to talk about this process and specific metrics in the next section.
In startups and smaller companies that don’t have the separate position of product marketing manager, the product manager may have more responsibilities at this stage. In this case, the product manager can be involved in the following processes:
- Writing business and use cases,
- Configuring the product launch plan and distribution models,
- Specifying the target market,
- Defining the pricing strategy, and
- Setting sales support and required tools.
Tracking product metricsAfter the product launch, the product manager monitors its progression and analyzes data to understand the success of a product. We have a detailed article about key product management metrics and KPIs if you want to learn more about them. These metrics can be organized into several main groups:
- the financial metrics for identifying revenue, such as monthly recurring revenue that shows the revenue related to the product in one month;
- metrics reflecting user engagement, like session duration that measures how long the product was used;
- metrics demonstrating user interest, i.e., retention rate that calculates the number of consumers who stayed loyal to the company after a certain period of time;
- metrics that measure the product popularity, like number of sessions per user showing how often the site is used; and
- metrics showing user satisfaction, such as net promoter score that defines the number of customers likely to recommend the product.
What is a product manager?A product manager is the person who creates internal and external product vision and leads product development from scratch. This individual defines customer needs, works with stakeholders and teams on creating the required product, and carries responsibility for overall product success.
Product manager's responsibilitiesMarty Cagan, the author of Inspired: How to Create Products Customers Love defines the goal of a product manager the following way: “to discover a product that is valuable, usable and feasible.” So, a product manager has to be knowledgeable in three main spheres: business, technologies, and user experience.
Who is a product manager?Identifying opportunities. The first thing that a product manager does is see the opportunity to develop a new successful product or improve an existing one, adding necessary features to it. The product manager must be aware of current trends and have a deep understanding of the market to make the right decisions when a company decides how to build or improve a product. This person is also responsible for the outcome of a product launch.
Product discovery, explainedDeveloping product vision and strategy. A product manager has to define the long-term mission of a project and build a clear, realistic plan of how to reach the desired result. A recent survey demonstrated that the key activity of most product managers (84 percent) is setting a product strategy. It’s closely followed by crafting a clear roadmap and overseeing its completion.
Team and stakeholders management. A product manager has to make sure that all members of a team work harmoniously to achieve the main goal. One of the most important functions of this person is to clearly communicate the requirements to the development team and organize the development process in the most efficient way. On the other hand, the product manager has to negotiate with stakeholders and balance their demands and expectations.
Marketing activities. Marketing is one of the main factors contributing to product success, so product managers collaborate with product marketing managers. That involves market research, observing current industry trends, collecting and analyzing customer feedback, defining pricing, and developing a marketing strategy.
Constant product improvement. While at first it seems like a product manager performs only administrative tasks rather than making something, that is not true. They are constantly working on the improvement of the existing product, testing it, analyzing data, and managing defects. Eventually, a product manager has to make the final decision on what the end-product should be like and the strategy for its development and launch.
While there’s no single set of KPIs and responsibilities for a product manager, they usually include monetization, user engagement, and the level of user satisfaction. The KPIs may vary depending on the company and industry. Some product managers focus mainly on development, writing specifications, and supervising development progression, while others display more focus on marketing and sales by developing a marketing plan and training a sales team.
Product manager's activities. Source: TheProductManager
Product manager deliverablesWe’ve already mentioned the main product manager’s deliverables when discussing the process, so here we’ll just briefly recap on the outputs that have to be created when working on the project – often through cooperation with other teams:
- product vision (often including mock-ups, demo, or walkthrough) to define the idea of what a product should be, why it has to be created, and for whom;
- marketing research report and user personas to analyze competition, describe the target consumers, and define the product/market fit hypotheses;
- product strategy and roadmaps to outline the development process, roles, milestones, and KPIs;
- product requirements that list essential features;
- execution metrics dashboards to monitor the development process;
- testing reports that help discover flaws and improvement opportunities;
- marketing and pricing strategy to plan the product launch and sales; and
- product metrics dashboard to monitor product success.
Product manager toolsJust like project manager’s tools, product manager’s digital helpers should assist with planning and monitoring resources, managing workflows, tracking productivity, collaborating, and exchanging information. However, since product managers have a wider range of responsibilities, they often use more diverse software in their daily routine:
- communication tools, including email, messaging, and web conferencing software (e.g., Outlook, Gmail, Zoom, Skype, Slack, etc.);
- roadmapping software (e.g., Wrike, ProductPlan, Aha!, etc.);
- issue-tracking tools (e.g., Jira, Bug Tracker, Bugzilla, etc.);
- customer feedback and survey software (e.g., SurveyMonkey, Typeform, Usersnap, etc.);
- business intelligence tools (e.g., Power BI, Tableau, Qlik, etc.), and so on.
Roles in a product teamDepending on the size of the company and its stage of maturity, the role of a product manager can vary greatly. In a small startup, this position can be substituted by a project manager or a product owner that we discuss below. In small companies, the product manager is likely to be a jack-of-all-trades with a broad range of responsibilities, including marketing, pricing, and even sales.
The roles in a bigger and more mature company, however, are usually more distinctly defined and have a narrower function scope. Also, as the business grows and starts developing multiple products, the need for a chief product officer arises to oversee the entire product portfolio.
The product manager is part of the product team that consists of several players, including those at the management level. Usually, there are three: a product manager, a project manager, and a product marketing manager. Product development can also be influenced by stakeholders and, besides that, there’s also a business analyst – someone who translates stakeholders’ business requests into development tasks for the tech team.
Roles in product management teamEach manager has one’s own responsibilities, limited to his or her sphere of concern. The product manager’s role is much wider and includes activities on every level. Let’s define the functional scope of the other positions to understand a product manager’s role better.
Project managers and product managersA project manager organizes the internal process of product development making sure that the project follows a timeline and fits a budget. This person tracks progress and coordinates all internal resources and members of the team (engineers and designers) to deliver the product on time.
Meanwhile, the product manager’s responsibilities are more high-level as he or she sets the overall vision, develops the strategy, and identifies and prioritizes the requirements -- with the project manager then following this vision and strategy to fulfill the preset requirements by assigning tasks, planning timelines, and allocating project resources. In other words, the product manager’s role is more strategic while the project manager’s is more tactical.
The product managers also cooperate closely with other departments such as marketing and sales. Project managers don’t do that, placing most of their focus on working with the development team.
So, these roles, being clearly distinct as they are responsible for different aspects of product development, are still complementary and have a number of overlapping functions.
Shared responsibilities with project manager:
- working on project documentation,
- controlling the development process,
- communicating with stakeholders and clients, and
- reporting the stages of the work to the clients and/or stakeholders.
Product marketing managers and product managersProduct marketing managers are responsible for commercialization, branding, and positioning of the product. They conduct market research, packaging, sales team training, and planning of promotional activities and events. Typically, they are responsible for
- defining user persona and learning about the customers,
- creating the product’s marketing strategy,
- communicating the product’s value to the market, and
- developing sales tools for a product.
Some shared responsibilities with product marketing manager:
- customer feedback collection,
- market research,
- development of sales tools, and
- analysis of sales data.
Stakeholders and product managersAs we mentioned earlier, stakeholders are the people who have an interest in the final product, can influence the process of product management and development, and are involved in decision-making. In product management, stakeholders can be clients, investors, even developers and users of a product -- or all of them combined.
Their responsibilities are to
- Provide feedback on product ideas,
- Describe the requirements in details,
- Contribute new features to the product development,
- Approve or disapprove product features,
- Influence decision making and timeline,
- Identify potential risks and issues in product management, and
- Provide necessary resources for product development.
One way or another, having stakeholders’ support is vital for a smooth and successful product development process so product managers have to encourage strong working relationships built on trust and cooperation.
Product owners and product managersWhile these two terms are often used interchangeably, there is a difference. The concept of product owner comes from Scrum -- an Agile framework for developing solutions for complex problems. According to the Scrum Guide, the product owner “is accountable for maximizing the value of the product resulting from the work of the Scrum Team.”
The product owners work internally, are deeply involved in the technical process, and collaborate closely with tech teams. They define iterations, create acceptance criteria, lead backlog grooming, accept stories and make sure they are “ready.” However, they work together with the product manager on release planning, feature definition, and defect management. So, the product owner’s role is more tactical and focused on short-term tasks than the product manager’s role.
This position can seem more similar to that of the project manager’s, since both of them oversee the development teams, but the product owner is more detail-oriented and only exists as part of Scrum teams. The project manager is needed to coordinate multiple teams working on complex or risky projects, manage the documentation, and sometimes track team progress.
How to become a good product managerA product manager frequently doesn’t have a degree in product management. Often, it’s someone with a background in marketing, user experience design, or software engineering. Typically, it’s a person who became an expert in one area and eventually acquired expertise in other disciplines. The main element here is not the experience per se, but the domain knowledge – the more you know about a particular market and customers within it, the better you can lead your product to success.
Product manager backgroundHere are our recommendations for people of different backgrounds that will help you close the gap and transition to a product manager role.
If you’re a techie. A PM is a leadership position, so in order to become one, lead – engage in fateful decisions about a product. Suggest new features and the means to implement them. Support your ideas with research using focus groups. Start your side project or startup. It doesn’t have to succeed to provide valuable practice for your positioning skills and understanding KPIs. Besides, any project can be a case study to show your future employees or current manager.
If you’re coming from marketing. Although the activities of product managers and marketing managers often coincide, note this big difference -- a PM is heavily involved in product development. Your main objectives will be learning to understand development workflows, technology, and successful communication with the engineering team. Since on many projects marketing professionals aren’t expected to directly engage with the tech side, you’ll have to initiate conversations and apply the skills you already have. Having knowledge of issues customers face every day, you can offer your own solutions and estimate how much time and engineering effort solving them will take.
If you’re a designer. Besides having to acquire the necessary technical and marketing skills, you would probably experience a notable change in your daily schedule, diversity of tasks, and overall work rhythm. Suelyn Yu, a UX designer who became a PM, notes that as a designer, she had a “maker’s schedule” – most of her work was unscheduled and she was free to plan her tasks independently. If you’re in a similar position, use this opportunity to understand what decisions lie behind the changes you’re asked to create. Ask questions and request access to client feedback and user interviews if you don’t already have it.
Product manager soft skillsIt’s obvious that product managers need a broad range of various skills to perform successfully. They have to be business savvy, have technical knowledge, and be proficient in design and marketing. However, not everybody realizes the importance of soft skills and emotional intelligence for this position.
Product manager’s skillset. Source: ProductplanA big part of a product manager’s responsibilities are related to communication, i.e., coordinating the development team, interviewing customers, informing executives, connecting with stakeholders, etc. So, excellent relationship management skills are a must-have for this role. Product managers have to be able to inspire people, resolve inevitable conflicts, and balance between interests and demands of all stakeholders, keeping everyone motivated and satisfied.
Some specific character traits that make best product managers are
- empathy -- to understand customers and team members better,
- self-awareness -- to stay objective and avoid involving their own interests in business,
- self-management -- to be disciplined and organized and organize others, and
- stress-tolerance -- to manage emotions and stay calm under constant pressure.
Product manager certificationIf you feel that you have the necessary skill set to become a product manager but lack theoretical knowledge or just want to add some value to your resume, you can pass a certification course. This way, you’ll get in-depth industry comprehension and develop your expertise.
Industry-recognized product management certifications can be obtained from AIPMM, Product HQ, Product School, Pragmatic Institute, or other renowned institutions.