IN THIS CHAPTER
- Understanding the product life cycle and how it integrates with various development methods
- Spelling out the seven-phase product life cycle
- Digging into the Optimal Product Process and its nine core documents
Every product or service goes through seven distinct phases in what’s called the product
life cycle. Understanding the life cycle and knowing what phase your products are in
allows you to know what the right next step is in order to ensure success. This chapter
guides you through all seven phases. Different information is needed during each phase.
Nine core documents are used at specific phases to store and pass on what you have
learned, record a decision that has been taken and signed off , track what needs to be
completed, and crystalize the thinking behind each key activity .
Defining the Product Life Cycle: What
It Is and Isn’t
A product begins life as a small thought: a “what-if ” spark that captures the imagination. But before a product sees the light of day or reaches the customer’s hands, it must go through a series of phases that involves all the departments within a company
These seven phases capture everything that happens with a product throughout its entire life and all critical decisions that must be made. Following the product life cycle gives product managers a road map on what to do for their product as it gets closer to being released. Here are the benefits of using this process:
- Clear decision making. The appropriate information needed to make a decision is available at the right time and presented to the people who have authority to make that decision.
- Information delivery is consistent and complete. Everyone knows what to expect and where to look for it, and the information available is sufficient for the next phase to start off well.
- Each phase is accounted for and completed correctly . Creating products is stressful.In the rush to get a product out the door , it’s tempting to skip a phase. A good process ensures that you don’t miss doing something and make a mistake that will be hard to recover from later on.
- Product management and product marketing know their role in each phase.These roles participate fully and appropriately during each phase. They know what they need to complete to ensure a great product. Both roles support delivering a complete product using the whole product concept as defined in Chapter 1 .
HOW DO YOU KNOW YOUR PROCESS ISN’T
Finding what doesn’t work is sometimes easier that knowing what is working well. If you see the following symptoms, most likely your process isn’t very effective.
- Decision making is extended. Every decision is hard fought and can be arbitrarily reversed at any time. And once you are allowed to start the next phase, you’re often in a rush to complete your product.
- No one really says yes. If you’re not sure that your project is funded or can’t find someone in authority to agree to proceed with a product idea, then your company may not actually have a product life cycle process at all.
- Different departments deliver information in different ways. In this situation , management can’t consistently make decisions on the same basis and in the same way . Or they have to keep asking for different kinds of information which one department doesn’t routinely provide.
- Some phases are ignored or shortchanged regardless of the negative impacton overall product success. You can tell that this is your failure point if you have just completed a product and your sales people don’t know who to sell it to, and the first customers who look at it can’t tell why they’d want to buy it.
- Product management doesn’t routinely participate in parts of the product life cycle. Product management and product marketing are restricted to just a few of the phases and participate in developing and defining only part of the whole product. Chapter 1 discusses the whole-product concept in more detail.
Phases and gates
The seven-phase model uses a phase-gate approach. Each phase consists of standard tasks that must be accomplished. Different departments and functions are aware of their work during the phase and the deliverable they bring to the party when the decision is made at the end of that phase.
To complete a phase and move on to the next one, the product must be scrutinized at a
gate. The gate is a decision based on the work in the phase. Figure 3-1 shows the phases and gates of the product life cycle. At the gate meeting or approval session, the company can decide to move forward with the concept or product, put it to one side, cancel it, or ask for more information. Critically , the information for a gate decision ensures management can correctly evaluate the risk and opportunity of investing significant money or resources.
Mapping phase-gate to Agile methodologies
A phase-gate process is well known and commonly used in the development methodology called waterfall. In waterfall development, product management describes a product and then hands it off for product development to create. When the development folks are finished, they hand it off to quality assurance. There’s no explicit review loop during the develop or qualify phase that allows teams to catch mistakes or misinterpretation. In reality , there are continuous reviews during each phase between project team members to make sure that the product is still on track and to deal with out-of -bounds issues as they arise.
Phase-gate processes are great for making sure that the right thinking is done at the right time with the result that products are more successful. In software development, many companies have shifted to Agile development processes. There are different versions called scrum, Lean, and kanban. They are described in more detail in Chapter 12 . And Figure 3-2 compares what product managers and product development are doing when under both waterfall and Agile.
Here’s how to use Agile with a phase-gate process. Agile is great at managing the
uncertainty and risks of software development. It isn’t great at keeping track of the long-term direction your product is headed during development. The strategic context provided by the conceive and plan phases keep projects on track as the focus is on a longer time horizon.
The big difference between Agile and waterfall development methods is in the level of
product detail defined in the plan phase. Under waterfall, every detail is supposed to be
defined before the engineers start. In Agile, the high-level market needs and the problem that the product should solve are defined during the plan phase. The actual
implementation details are left for product development and the product manager or
product owner to flesh out as the work proceeds. Figure 3-2 shows that under Agile in the develop phase, the product manager is still refining requirements. They then work with product development to plan the next small chunk of work (called a sprint). And then the development team proceeds to design, code, and test before coming back to define the next sprint.
WORKING WITH A FOUR-PHASE PRODUCT LIFE
You may also know of another commonly used product life cycle. This one starts from the premise that a product is in the market. It has four phases:
- Introduction: The goal in this phase is to build market awareness for the product.The job here is to educate customers as to the value of the product.
- Growth: During the growth phase, the company is guiding market share and creating brand preference in the eyes of the customer .
- Maturity: Strong growth slows, and the product may encounter much more competition. If your product has good market share, you need to defend it. If your product is new in this market, your chances of success are diminished unless your product is vastly better . Even then, the cost of marketing a new product from a new provider in a mature market is expensive. Products can remain in the mature phase for a long time. Arguably , lightbulbs have been in a mature market for over 100 years . As new technology arrives, customers need to understand only the difference in technology and pricing to buy the new products; they already understand why they need lightbulbs in general. The actual companies that play in this market are remarkably stable
- Decline: As sales decline, companies have a limited set of choices. One is to maintain the existing product and sell what they can. Another alternative is to reduce costs and focus sales to a loyal niche segment. And another option is that the company decides to discontinue the product or sell it to another company who is interested in remaining in the market. Review Chapter 16 for a detailed discussion of your options.
The four-phase cycle is a useful tool for understanding what works best in gaining ground for your product at particular points in time. In fact, another name for this life cycle is the industry life cycle or market life cycle. The four-phase life cycle doesn’t have decision points between each phase. Instead, you emphasize different aspects of marketing and sales activities at each phase.
It’s Just a Phase: Breaking Down the
Product Life Cycle
The deliberate execution of the appropriate tasks during each step in the seven-phase
product life cycle maximizes your company’s chances at delighting its customers and
increasing company profits.
Phase I: Conceive
During the conceive phase a company or team generates new ideas and evaluates and
prioritizes them to determine whether to move forward with them and spend time and
resources. Anyone can come up with new ideas: executives, engineers, product managers, salespeople — even customers may propose new ideas.
Tip: One key difference between companies that do the conceive process well and ones
where success is more hit and miss is whether the work of observing customers and
identifying currently unmet (latent) needs is intentional or accidental. The best
companies spend a lot of time and effort on researching and observing customers to
make sure what’s created has value.
The key role of the product manager in this phase is to articulate the customers’ needs and the solvable problems in such a way that the potential solution to the problem can be accurately validated with customers. By applying ideation exercises and using
prioritization techniques discussed in Chapter 4 , product managers can lead the company to identify and focus on new and innovative ideas that can become the engine for future company growth and success.
Keep the following in mind:
- Key tasks: Discover product opportunities, validate product-market fit, develop preliminary strategic documents listed in key deliverables.
- Key deliverables: Preliminary versions of the business plan, market needs, and market strategy documents.
- Decision at the gate: Will the company agree to provide the funding and resources to proceed to the plan phase and gain a deeper understanding of the key parameters of proceeding with the project?
WHAT IF YOU HA VE MORE THAN ONE GREAT IDEA?
In an ideal world, only one idea would move to the plan phase. If you have more than one great idea, more work needs to be done to decide which idea(s) to proceed with. T o do this, rank or prioritize each idea against the others. One way to rank them is to look at the company’s core competencies. A great opportunity and fit for one company may not be worth the time and effort for another .
Core competencies can include the following:
- Technological expertise: What technologies does your company have unique expertise in? Does the new product idea leverage this? Is it a brand new area that you have to invest time and money to become good at?
- Business expertise: What types of businesses do you run? Is it fast or slow moving?Will you be likely to be competing with startups or established companies, and is your company capable of doing so?
- Channel experience: Do you already do business with a distribution channel that is appropriate for the new opportunity , or do you have to work with a new channel that you don’t have experience with?
- Brand : What brand values are associated with your company? Does this new opportunity match with these values?
Phase II: Plan
After a new idea seems to have some potential, you can spend more time to actually decide whether the investment of time and energy is worth the estimated financial gain. During the plan phase, product managers conduct more detailed and specific market research and competitive analysis to determine whether the opportunity is large and profitable enough to be viable. They determine the market need (what problems customers have) at a deeper level. (Many companies use the term market requirements , but we prefer the term market needs because it more accurately states the information being captured.) And they finalize the business case to justify spending the money to develop the product. Once the market needs are delivered to engineering, they then create a product description document that shows what they would build in order to meet the customer needs and solve the problems the customer is having.
It’s not enough to just determine that you have a market need and that your company can put the product in place in the market. Taking a product into market successfully requires additional information — and a different document: the market strategy document.
This piece, completed by the product marketing manager , describes exactly how , strategically , the company can take the product to market. It identifies any issues that may get in the way of a successful introduction. Additionally , a road map showing the future of the product is often created to give an idea of the longer-term strategy and viability as the product develops over time. Road maps are driven by product management with input primarily from product development, executives, operations, and sales.
Key tasks: Create market and product strategy and corresponding road map. Product
manager completes the business plan and market needs documents. Product marketing
completes the market strategy document. Engineering completes the product description document.
Key deliverables : Business plan, market needs document, product description document, market strategy document, and road maps. Chapters 9 , 10 , and 11 have more detail on all these deliverables.
Decision at the gate: The company agrees to fund actual product development.
Phase III: Develop
Once the key deliverables from the plan phase are approved, the product moves into the
develop phase. In the final stages of planning, feature and schedule trade-offs are made so that at approval, the actual work can begin. The team moves forward with creating a
product that is above the bar in terms of what it must deliver to customers. Most of the
development money is spent during the develop phase. The role of the product manager
during develop is to make sure that the customer problem is solved by what the engineers actually create. Chapter 12 has more detail about the develop phase.
Key tasks: Solidify any development plans that remain uncertain. Develop a final feature
list, finish the beta testing plan, and adjust plan as issues arise in development to make
sure that a valuable, customer-oriented product is the outcome.
Key deliverables: Product manager: beta plan. Engineering, quality assurance, support,
service, operations, marketing, and other departments have a long list of deliverables that are provided to the rest of the company so that everyone is ready to support and sell the product at launch.
Decision at the gate : Agree that the product is ready for beta testing with real
Phase IV : Qualify
As the end of development nears, the team decides whether the product is ready to go into its official final qualification phase before it is released to the general public. Engineering will generally decide whether the product is ready for this, but product management and quality assurance can be gatekeepers to make sure that a product is good enough to undergo field testing in the qualify phase. Don’t confuse this stage with making sure that the product is perfect and is fully ready to ship to customers. At this point, the product needs to be good enough so that you can confirm with a select group of customers that the product functionality actually meets customer needs. Does it have the required level of quality and features to fulfill the overall product objectives? Chapter 13 goes into the details of the goals and execution of the qualify phase through running a beta program.
Warning Unfortunately , many companies either minimize or rush this phase. In a rush to ship, they don’t really try the product in real-world scenarios. This move can cause a
major catastrophe for the product and/or company if the quality level turns out to be
subpar for its brand image. Imagine spending significant amounts of money launching
and marketing a product without ever having verified that the quality and customer
satisfaction levels are adequate to drive sales.
For example, consider the Microsoft Kin phone. After shelling out hundreds of millions of
dollars (perhaps billions including acquisitions) developing the Kin phone, Microsoft then
spent a huge amount to launch the product and even had a launch party at its campus —
before canceling the product after less than six weeks because sales were so anemic. Had Microsoft tested with real users in addition to internal quality testing, it could’ve avoided serious embarrassment.
Key tasks: Run the beta program, complete the beta report, finish the launch plan, and
begin preparing launch deliverables. T est marketing messages and position the beta
Key deliverables: Launch plan, completed beta plan with customer feedback that the
customers find the product to be valuable.
Decision at the gate: Does the decision-making team agree that the product is ready to
Phase V : Launch
Great news! Y ou qualified the product with your customers to make sure they feel it’s a
worthwhile product and an investment they’re willing to make to resolve a current
problem. For a revision to an existing product, your customers are likely already primed to embrace and accept this new offering. For a brand new market offering, you have
confirmation that the product has its first customers interested, and you have a plan to get more of them interested during the launch phase. F antastic! Y our company is ready to officially launch your product. What you’ve been working on for a long time is now going to become visible in the marketplace.
Once again, this process has many pitfalls. First, recognize that at launch the company can generate interest in the new product — provided the product is actually available. If a product isn’t ready to ship or look at, it rapidly becomes old news, and no one is interested in reviewing it or seeks it out. Y our work during and even before the launch phase is to prepare your channel and other partners (the people that actually sell your products to customers) to successfully introduce, sell, and support the product. Your company has the opportunity to set the competitive argument against other companies and products.
During the launch phase, your task is to communicate, communicate, communicate. You brief every internal and external audience that you can think of . Your marketing
department rolls out electronic and physical communications to a long list of people who will go on to sell the product to potential customers. Launches are an amazing amount of work and if done successfully generate excitement and initial sales. Chapter 14 has more details on the inner workings of a launch.
Key tasks: Release product, gather feedback, finish the on-going marketing plan for your product as part of overall company activities, and perform launch review .
Key deliverables: Ongoing marketing plan, launch review document.
Decision at the gate: Is the company ready to begin the maximize phase and spend
additional dollars and resources to achieve the revenue, profit and strategic goals for the
product? What worked and didn’t during the launch? Were projected sales results
achieved? If not, why? What changes need to be made to the marketing plan? What
product changes should be fed back to the product development team?
Phase VI: Maximize
Launch is such an exciting phase. Product managers are able to talk to anyone about their new shiny toy of a product. T o support ongoing sales, however , the product requires ongoing marketing. And the marketing department typically takes over at this point. The marketing activities and plans they define include a vast array of activities that encompass demand generation, public relations, and enabling sales to do their job. This all links tightly in execution, messaging, and timing. Product managers don’t stop, though. They track how successful the marketing is. They look at competitive responses and continue gathering customer feedback to ensure the voice of the customer is included in the next revision of the product. If appropriate, they participate critical support for the sales force and channel as sales becomes better and better at selling the product. Chapter 15 has more details on ongoing marketing that maximizes sales.
Some companies have dedicated product marketers who ensure the product gets what it needs to keep sales going and achieve revenue goals. In other companies, the product
manager may have this task in addition to full-time responsibilities of planning and
working on new products.
Key tasks: Product managers: Continue support of sales on an exception basis and look
for product adjustments or additional product opportunities. When sales drop, plan end-of -life activities. Marketing: Develop marketing plan and integrate new product into ongoing marketing activities. Measure, review , and adjust activities to maximize sales.
Key deliverables: End-of -life plan.
Decision at the gate: Is the product ready to be retired from the market?
Phase VII: Retire
Product managers and salespeople really want a product to continue to be sold forever . For that to happen, they may revise the product, meaning a new version comes to market. A company may also sell a product on an ongoing basis without putting much effort into it, simply retiring it at some point. For some products, this process isn’t much of an issue: The company sells off the inventory or removes the product from a website or price list. For other products, sales decrease to the point that the company may intentionally discontinue it.
For some types of products, such as enterprise software or products being sold in the
financial, government, or medical fields, planning for the end of life is a critical operation
with many specific and public steps along the way . Even in the consumer space, the retire phase can be critical to the value of the brand and the company .
Consider what would happen to a large consumer oriented company if it didn’t carefully
plan the retirement of a product when coming out with a new version. It could end up with millions or billions of dollars of useless inventory and corresponding financial losses.Making the wrong step during the retire phase has been known to kill off companies. One all-too-common example is companies that pre-announce the new product too early and then create a situation where the old product won’t sell. That’s why the retire phase is a carefully considered necessity for product success. And at this stage, the product manager typically drives this process to conclusion by delicately balancing the competing needs to the entire company in achieving a graceful end of life for a product.
Key tasks: Product manager: Investigate fully the impact of retiring a product on all parts of the business; sales, operations, and service are primary departments to check with.
Key deliverables: An executed end-of -life plan.
Decision at the gate: There is often no gate at the end of retire. If you are diligent,
review and document what went well and what didn’t go so well.
A LITTLE HISTORY LESSON
The Association of International Product Marketing and Management (AIPMM) created the seven-phase product life cycle in conjunction with a group of experts worldwide, including the 280 Group CEO and team of consultants and trainers. In 2012, AIPMM created the Product Management Body of knowledge (ProdBOK), a foundation for defining the seven phases and corresponding gates, roles, and
responsibilities for product management and product marketing. The 280 Group expanded upon the ProdBOK to create a complete framework called the Optimal Product Process, which includes, training, templates, methodology , and clarity on roles, responsibilities, and governance.
Detailing the Optimal Product Process
Building on the seven-phase model from AIPMM, the 280 Group team created the Optimal Product Process (OPP). This process is a comprehensive method covering everything a company or team needs to manage products successfully — from start to finish — without skipping any important steps.
The OPP further defines the same seven phases we discuss in the earlier section “It’s Just a Phase: Breaking Down the Product Life Cycle ” to include corresponding activities for each particular phase. The gates are key decision points to ensure that moving to the next phase is worthwhile. The OPP also includes nine core documents to help guide team members in their activities as their product proceeds through the life cycle.
Taking a look at how the process works
To set the process in motion, clear and crisp product management and product marketing roles and responsibilities are identified and agreed upon. Product management focuses primarily on the internal planning of great new products. Product marketing focuses primarily on outbound marketing, ensuring the messaging, positioning, pricing, launch, and marketing motivate customers to purchase. T o make sure that all tasks are completed, companies rely on project managers or program managers to ensure that each critical task is assigned and clear records are kept of what each participant must do and at what phase.
The Optimal Product Process expands on the AIPMM model to capture the following:
- Roles and responsibilities
- Decision-making criteria for each phase and gate
- Common activities for product managers and product marketers
- T ools to work through the challenges of each phase successfully
The result is a more precise view of the realities of bringing successful products to market.
See Figure 3-3 for a complete look at the OPP .
The OPP shown in Figure 3-3 has the seven phases across the bottom and shows the major activities that are performed most often by product managers or product marketing managers during each phase. For example, during the conceive phase, product managers discover opportunities, validate the product and market fit, and develop preliminary documents.
The exit criteria (gates) shown in the figure show what decision needs to be made in order to move to the next phase. For example, in order to move from conceive to plan you have to obtain approval to fund the business planning.
Shown above the exit criteria are the nine core documents used in the OPP to keep the
product idea moving forward. Each document has an assigned role and is either strategic or tactical. Product marketing is generally responsible for writing the market strategy document, launch plan, and end-of -life plan as well as writing or contributing to the marketing plan. Product management is responsible for the business case, market needs, product description, road map, and beta plan.
The documents listed under “Strategy” are strategic documents that represent the critical thinking and decision making that should happen up front. The documents listed under
“Execution” are tactical and outline the goals and specific tasks and steps that must
happen in order to successfully move your product through the corresponding phase.
Understanding the nine core documents
The Optimal Product Process identifies nine key documents associated with the seven
phases of a product life cycle. T emplates for these documents are included in the 280
Group Product Management LifeCycle T oolkit (included as a free download with this book; see the Introduction, page 4, for details). Each of these documents (see Figure 3-4 ) includes the critical questions, issues, decisions, and considerations you must address in order to ensure a product’s success. They represent a comprehensive way of ensuring that nothing falls through the cracks and that everything is thought through thoroughly and effectively .
The list of nine key documents provides enough information to guide the core work of a
project while you bring the product to market. Though you may generate many other
documents along the way , think of these core nine as the guardrails of the project to make sure that it stays on track.
The nine documents are intended to be guidelines. In some cases, filling them out,
writing comprehensive documents in every phase, and getting sign-off from the
appropriate parties in your company makes sense so that everyone is on the same
page. In other cases, such as a start-up that’s moving fast, you can simply use the
templates and documents as a checklist to make sure the team has thought out all the
critical success factors as early as possible. The level and formality of documentation
is up to you based on what your company requires for success.
In Parts 2 and 3 of this book, there are detailed instructions on how to generate content for the documents and the overall outline. The 280 Group Product Management LifeCycle Toolkit (included as a free download with this book; see the Introduction, page 4, for details) also includes completed sample versions of the templates for you to look at to get an idea of what a good document looks like.