Is it possible that you are managing too many products? Sure, as product managers we actually like it when we have multiple products to manage. Sure, we’ll complain to everyone, but deep down inside we really like the assurance of having multiple products belong to us because then we’re confidant that at least one of them will always be doing ok. It turns out that not only is this thinking wrong, it might actually be bad for our company also…
The Problem With Brand Extensions
Dr. Barry Berman has been researching how we get ourselves into these situations. It turns out that we product managers like success. In fact, it might not be too far off to say that we’re addicted to success. If we are in charge of one product, we are happy when it’s doing well and unhappy when it’s not doing well. That’s why it’s so easy for us to decide to extend our brands – create a product that is very similar to our existing product (think “jumbo size”); however, just a bit different in order to appeal to some customers that we’re currently not reaching.
The problem with this strategy is that at least in the beginning, it can end up working just a bit too well. We see how this additional product can be up when our other product is down and we decide to make another similar product so that it will potentially be up with the other two are down. And so on.
We can quickly end up in a situation in which we have a lot of products – too many in fact. Presenting our customers with too many choices is never a good idea and in fact can end up boosting our costs and lowering our revenue. Clearly something needs to be done here.
Why You Need To Limit Your Customer’s Choices
The big question is what can a product manager do about the situation in which they find that they have too many varieties of their product on the market. One of the simplest ways to deal with this situation is to prevent it from happening in the first place.
In order to make sure that you don’t end up introducing too many products, you need to establish (and enforce) a clear set of rules. This means that as a product manager you need to implement a “tough love” program. If your product is not, as they say “pulling its own weight” in generating sales, you need to pull it. You can replace it with a redesigned product, but you can’t have both products in the market at the same time.
Mass Customization Is A Real Solution
The attraction of creating brand extensions can be a powerful one for product managers. Finding a way to resist the siren song of this product sprawl technique can be very challenging. What you need to do is to find an alternative.
One good way to avoid needlessly extending your product line is to instead implement a system by which you offer your customers customized versions of your existing product. This type of mass customization allows you to meet the individual needs of more types of customers while at the same time minimizing the number of products that you need to support.
Not all products are well suited to this approach. The ones that seem to be best suited are those that are already built out of a set of components. The ability to change the configuration of how these components go together is what will give you the ability to offer your customers mass customization services.
What All Of This Means For You
Providing our customers with too many choices is never a good idea. All too often, product managers can discover that by extending their brands, they’ve ended up with too many products. Clearly some trimming is called for.
There are different ways to solve this problem. One of the simplest is to prevent it from happening in the first place. To do this, product managers can take the step of placing absolute limits on the number of products that you offer. Alternatively, if you want to be able to still offer your customers choices while limiting the number of products that you are managing, then develop ways to customize every one of the products that you deliver.
Product managers realize that in order to minimize costs while boosting profits at the same time, they need to slim down their bloated product lines. Using the techniques that we’ve just discussed, it is possible to do this while still retaining your customers. Once you’ve trimmed your product line, you’ll wonder why you waited so long to do it!
Question For You: What do you think is the maximum number of products that a single product line should support?
P.S.: Free subscriptions to The Accidental Product Manager Newsletter are now available. It’s your product – it’s your career. Subscribe now: Click Here!
What We’ll Be Talking About Next Time
Of the past 20 years or so, one of the best product management jobs to have in the United States had to be a product manager who was responsible for one of Toyota’s Lexus’ brand’s cars. These cars have been selling very well for a long time and have been very respected in the marketplace. However, it looks like things are starting to change and the big question is what should the Lexus product managers do now…?