Ok, I’ll say it one more time: times are tough all over. If you are a Product Manager who’s product is, how shall I say this nicely, priced on the high side then what are you to do in these troubling times?
Sure you can mess around with your product’s pricing and you could even consider launching another lower priced product line if you were so inclined. However, sometimes that’s just not possible. What then product manager?
Creatively Offering Less Expensive Products
This is one of those discussions that if we don’t get grounded real quick we’re going to end up flying off into the either and I’ll just be talking toÃ‚Â myself. So just for a minute, let’s pretend that you are the product manager who is responsible for Ferrari cars at an auto dealership – no you don’t make ’em, but you do control the marketing mix.
Right now there are three new “hot” Ferrari models: F430, 599, and 612 Scaglietti. But of course it is a down economy Mr. Ferrari dealership product manager. What are you going to do?
The F430 is going to put your customers back about $218,000, the 599 will cost them roughly $320,000, and the 612 will put them back $313,000. Let’s not even talk about tax, tags, and dealer prep costs!
Hopefully it goes without saying that the Ferrari F430 is your bargain product here. In troubling times, when people go out to buy a Ferrari it sure seems like they’ll be picking up more F430s than other models. This is an important fact for any product manager to realize.
Only Make What You Can Sell
What our Ferrrari example is designed to help us understand is that one additional tool that a product manager has in his / her pocket is the ability to control your mix of products that you offer to your customers. If you were controlling what Ferraris a dealership presented to its customers you’d start stocking more F430’s and fewer 599’s and 612’s.
Now a small point of subtlety is required here. At our fictitious Ferrari dealership, we WILL be having some folks come in who are flush with cash and will want to buy an upper end 599 or 612. Fantastic! Let’s make sure that we’ve got a couple of those on hand so that we can take care of them and then stock the rest of the dealership with F430s.
I’m not a product manager responsible for stocking a Ferrari dealership; however, how cool would that be? Even if we are responsible for less glamorous products right now, the lessons learned apply to us also.
Right now most of our customers are trying to conserve money so they will be looking for lower priced products. If you are responsible for controlling the mix of products (or product configurations) presented to your customers, then you need to increase the low end and minimize the high end for now. At the same time, you need to realize that you’ll always have the occasional high end buyer and so you need to be ready to service them when they show up. This is how great product managers make their product(s) fantastically successful.
Questions For You
If you are responsible for multiple products / configurations have you been seen customers go cheap on you? How are you reacting to this shift in demand? Have you increased the quantity of low end products that you have ready to sell? Are you still ready to sell to a customer who wants your high end product? Leave me a comment and let me know what you are thinking.
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What We’ll Be Talking About Next Time
In the world of product managers there are a few stories that the old hands talk about when they get together. The product failures, the flubs, and the downright fiascos that have grown into legends that are now only mentioned in hushed tones when aÃ‚Â product manger is trying to kill a product idea that he / she knows will doom a product. One such story is the tale of New Coke.