Product Management In 5 minutes (Part 4)

We all can agree that the core of product management is the overall success of the product, and the most important aspect of this is making sure that the target market you are attempting to address as a product manager is large enough to make it worth going into.
So I put together four steps to ensure that the product is market-ready as well as the market is ready for the product.

01. Identify

At this stage as a product manager, we have to identify and know the opportunity in the target market and the relative importance of the focused opportunities versus other potential opportunities by making market research and market sizing on the target market.

There are several methods to market sizing but I make use of the two best, namely the Top-Down analysis approach and Bottom-Up analysis approach.

Top-Down

This analysis approach is calculated by finding the total market and then estimating which of its share suits the product, with this approach assumption is king, you would make assumptions on market penetration and sales.

Bottom-Up

This analysis approach is calculated based on sales of current similar products in the target market then estimating how much of its sales can be captured this is much more accurate compare to the initial because it is based on pre-existing patterns of similar product sales in the target market and not assumptions on the total market.

02. Compare

We have identified and sized up our target market, what’s next?

Finding and comparing competitors! yes, and to do this we need to recognize different market circumstances that could occur with regard to competitors and the probability of a big or small market, then after would collect information on our competitors and make an objective judgment related to our product.

Study shows that 9 out of 10 target market has a slew of different competitors doing exactly what your product proposes or even better and 1 out of 10 where it has no competition, as a product manager we must have information about this before engaging the product team and using organization resources in tackling the opportunity, we need to be able to make crucial and important decisions.

This can be accomplished using a method known as the Target feature triage which is being able to know which potential opportunity, feature, product, or project is most likely capable of Getting more users/clients, Making users/clients happy, and Enhancing the brand this way it would be more reassuring which opportunity, feature, product or project would yield the most preferable returns.

The target feature triage can not be accomplished without knowing What the competitor looks like, What they are doing, and What they offer this is where the next step comes to play.

03. Determine Differences

Sculpting the market intelligence of potential competitors to get the perfect statue (preferred returns).
This can be accomplished by following these processes

Capture

This is a study record of your competitors the known and unknown broken down into four major categories namely direct, indirect, potential, and substitute.

Direct competition has a similar or exact solution your product proposes.

Indirect competition solves the same problem but generally with a different solution/approach and probably has a target audience (either bigger or smaller than yours).

The Potential competition offers an entirely different product to your target market but they don’t address the same problem as your product.

While Substitute competition solves the core problem of your core target market but their solution is not angled or delivered in even remotely the same way and doesn’t generally target your target audience.

Understanding

There are five crucial criteria to ensure we deeply understand the capture as a product manager in order to be able to differentiate and also have a deeper sense of their capabilities, we have;

The product core — this is the main product team behind the competition, we should be able to weigh how good they are this way you reduce the risk of being out engineered or executed and would be able to define which aspect of the product to wade into.

User base size —size does matter in product development so ensure you know the size of the competitor's user/customer base so as to avoid dominance in the market.

Design — a very essential aspect, as product managers we need to be aware of our competition's ability or inability to make products that are aesthetically pleasing or more beautiful than your product, why? Because in general people (the target market) are inclined to use products that are well thought out and well-designed.

The Brand — this is a major quality to look out for because it is abstract and can allow the product to either be effective or restricted, now the perception people (the target market) have of you (the corporation/organization) and the product or the competitions can determine the capabilities of the product in the future. A strong brand demands a much higher level of customer loyalty when launching a new product and also has the advantage of being able to charge higher prices, so be aware of the relative position between your brand and that of the competition.

Speed — how quickly can your competitors build, turn around, and ship a product or feature needs to be taken into consideration because of its relevance in every situation of your product, take notes of situations where your corporation/organization or that of your competition is significantly larger, why? Because the larger an organization the more hierarchies/bureaucracies they have within which would typically slow down the rate of productivity. This way you would be able to scale faster.

04. Specify Analysis

The last stage of conquering the competitive & market analysis, now you have identified, compared, and determined differences of your competitor's, what's next is to put that market intelligence against your product through analysis for everyone in your product team to understand, there are various methods to doing this but I make use of the Feature table.

Feature Table By Yasir Gaji

This is a comparison chart that helps you figure out what is cutting edge and what is competitive in your target market before you launch your product/feature. It is best if it is based on your initial capture study and the usage of your competition's product.

Feature tables are not only used for comparison they can as well serve as case studies for what to work on, improve, or deprioritize in your product which is very important for a product manager because you would constantly be in this loop.

Conclusion

Now that you have made a full orbit around the four stages of competitive & market analysis, what’s next? You repeat the process this is called the monitoring stage.
You keep monitoring because competitors would always be there, if not forever, at least for a while. And like every other concept in life your competitors would change, and as a great product manager, you want to keep tabs on them so you can adjust and redirect.

It is not realistic to beat every single competitor in every single category that’s why product management is all about making decisions between opportunities so as to not launch products that are worse than whats is probably out there, to avoid failure.

Your product vision is how you plan to win the market so brainstorm your best and do extensive research so you can at least be prepared for the target market.
I expect questions for clarification. In the next part, we would learn about Customer Development.

Notes

The top-down approach might be optimistic and reasonable but it is not the most respectable way of estimating market potential.

The bottom-up approach is realistic and conservative but takes more time to put together but it is advised for effectiveness.

Finding and comparing competitors is very crucial and can be cumbersome so I advise you to focus more on direct competitors.

The 1 out of 10 cases is a double-edged sword it’s either the idea/product is genius or it has no customer demand, be careful.

Potential competitors are also known as prereferral competitors.

Ensure to always keep constant tabs on competitors by always jockeying.

You necessarily don't need to make feature tables because in most cases you can’t always keep track of every single thing your competitor does.

You can use either google sheets or excel to create your feature table.

What you prioritize as important might be different from what your competitors prioritize.