By Hannah Whittenly
At the heart of the success of many businesses is product management. Product management can perhaps best be defined as the life cycle of a product within a company. It includes the stages of market research, product development and product release.
While product management is integral to the operation of many businesses, costs can get out of hand and become a big issue. With that in mind, here are a few tips a small business can use to save money on product management.
Perform Proper Market Research
Perhaps the best cost saving feature of any product is actually being popular with consumers. High revenue tends to the do the job of mitigating the overhead required to get that product out on the market.
This is why market research is very important. Performing the proper research can tell you if there is demand for your product as well as exactly what demographics would be interested in purchasing it. Without this research, releasing a flop is far more likely. In regards to product management, market research comes in the form of market viability research and individual interest research. Market viability research involves examining the performance of similar products in the market. Individual interest research can include research methods like focus groups and surveys.
Test Your Product Fully
The development phase is just as important to helping make the product profitable and lowering the overall expense for the company. A proper development phase with plenty of testing allows you to spot product defects and other issues that would become a problem after release. It allows you to solve these issues before the large investment is made into putting the product into production.
Not properly developing and testing a product can produce devastating results for a company. When customers encounter the defect, they will likely be irritated. Your online reviews and word of mouth will suffer as a result. Even worse, your product may not be safe. This could result in lawsuits as well as product recalls. Either of these can certainly end a small business that may not have the kind of financial resources to deal with such issues. According to Forbes, up to 53 percent of small businesses are sued during the year.
One important part of product management is designing, testing and producing packaging. Packaging of course is a very important part of a product. In some cases, like food and drink, it is one of the most important elements. However, it can also be a great source of expense. Creating and testing packaging in-house can sometimes be just as expensive as doing the same for the product itself.
Thankfully, there are supply chain services out there that act as packaging outsourcers. Such companies can design your packaging to fit your marketing needs. They can also manufacture the packaging and package you products for you. This can be a significant advantage in that it lowers costs and allows your employees to focus on parts of product management more directly related to the core product itself.
Base Production on Demand
Another way small businesses get into trouble is by producing too much stock. In some cases, the excess stock of products is never sold at all. Instead, you need to focus more on the actual demand that exists in the market. For certain products, you may be able to create an on-demand production process. In that case, the product is only manufactured after it has been sold instead of the other way around. This can create far more efficiency than simply forecasting the amount of stock you need.
Product management is at the core of many successful companies. However, if you aren’t careful, costs can get out of control. Instead, design your product management processes with cost savings for the company in mind.
Hannah Whittenly is a freelance writer from Sacramento, CA. Most of the time she loves to write about business and family. She regularly interviews small business owners from around the world about their business practices, products, and services.