To be competitive in any B2B market, you must efficiently manage your products and services. The goal of product service management (PSM) is to continually improve a product or service as the market situation (needs and problems) changes. Therefore, factors affecting product service management require a continuous review to enhance or adjust the strategy as necessary.
What is product service management?
Product service management definition refers to a general (B2C and B2B) marketing strategy whose major objective is to update and improve products or services regarding market changes.
The role product service management plays in B2B marketing is vital. It is critical for any B2B organization always to guarantee that its products and services are adaptable to changing market trends.
The majority of businesses accomplish this through periodical evaluations. The company provides a forum for customers to share their opinions about the offered solutions. They then use the input to their products (services and goods) to improve their quality.
A product service manager is responsible for product management and is constantly informed on the state of the business environment. They develop systems that make it simple to communicate with clients and take their preferences and behavior into account.
Advantages of product service management
Managing products and services in today’s environment includes organizing a slew of sophisticated marketing tasks, including product selection and evaluation, technology testing, market analysis, trial sales, and advertisement sales assistance. As a result, you may improve your company’s value by employing effective marketing strategies, and you can profit from the following benefits:
More customer loyalty
Customer retention is a critical objective for every business. It is typically accomplished through the development of strong relationships with customers. Product service management focuses on strategies to develop long-term connections with customers by providing personalized services tailored to their unique needs. Additionally, it designs items that satisfy their quality criteria across a range of price points.
More revenue and profit
Successful businesses rely on high-quality products. Implementing a product service management guarantees that the company develops high-quality products while adhering to the company’s goal, competing advantageously, and increasing productivity.
To ensure the business’s overall success, the product service management department concentrates on developing a small number of high-quality items. In addition, qualitative products and services encourage many potential customers to acquire the products at a higher price, resulting in increased earnings for the business.
The modification of mature products and the launch of new ones to accommodate customer requirements results in a rise in the acquisition of new customers.
Product service professionals analyze products (goods or services) based on customer feedback. They then use this feedback to improve the product’s quality to better suit the needs and wants of customers.
A manufacturing company with a product service management division will always have something new and different to offer its customers while improving existing products. Any organization must survive in today’s B2B market and remain relevant in the future by always introducing new products and solutions while maintaining existing ones.
The product service management department ensures that the product is more oriented toward the customer’s specific requirements. They accomplish this by constantly watching the supply and demand of items in order to determine which products customers prefer over inferior products.
Management of products and services provides a company with the strategy necessary to adapt to changing market conditions. Without incurring a financial loss, the business can add new resources to meet the customer’s wants or modify their products effectively.
Duties of the product service management team
B2B organizations need to make several efforts to achieve successful product service management. First, these businesses integrate the production process, marketing activities, and sales functions, enabling them to provide their customers what they need.
Today, not every B2B company has a “product manager” position. Despite this, practically every organization has a “brand manager” to oversee the products or a set of closely linked items. This always looks weird to me, especially for industrial companies.
Good feedback and communication among all divisions within a business are critical for successful marketing management. Therefore, it comes as no surprise that managing products need interaction skills.
However, who is ultimately responsible for product management? In a small company, a company owner or a director is the person in control. But on the other hand, in larger and more sophisticated organizations, a full department may be dedicated to handling products and services.
Having a joint team of industry experts, designers, manufacturing engineers, sales reps, etc., is essential and effective for a successful marketing strategy.
So, What exactly are they doing? Depending on the product market realities, they continually track products, hunt for current innovations and functionalities, modify products, maintain existing ones, or delete them.
Steps of product service management
1. New product development process
B2B organizations spend significant resources, time, and effort inventing new items to offer their customers. The term new products refer to items or services that:
- Haven’t been offered previously in the industry
- Have undergone some form of modification
- Will be reintroduced or re-distributed in a novel way
As you can see, while some products are completely new to the market, even older and current products can be classified as new in the product management procedure.
Businesses might acquire new goods or services in a variety of methods. For example, they may acquire them from another individual or business, license them from another individual or business (they receive approval to sell a product line but do not really own it), acquire them through the acquisition of another business, or develop them themselves.
At this point, service product management determines the exact right choice.
2. Supervising existing products
Existing products are your items that are already on the market. Therefore, product managers must keep a close eye on existing goods or services and carefully watch their revenue, profit margin, market dominance, and compliance with company standards and objectives.
Additionally, executives may determine that an existing product is sufficient in its current form and does not require modification. Then, they may choose to make improvements or alter the configuration in either way. Most product improvements follow the same stages as designing new ones.
Managers may decide to alter their marketing strategy in order to reposition mature products. Or, they could opt to discontinue it outright. This decision depends on the product’s life.
3. Retirement of weak products
This phase is also referred to as product discontinuation. Weak products (undesirable or low-quality products) experience a fall in revenue and profitability. On the other hand, product withdrawal must be planned properly to avoid jeopardizing the company’s professional image. Certain items can be withdrawn from the market immediately, while others must be moved out over time.
Some B2B companies gradually phase out a weak product to provide customers time to find alternatives, or they may continue to provide service for a retired product for a specified amount of time to keep customers satisfied.
The company executives must eliminate any substandard items due to the associated expenses. Bear in mind that product service management is really all about determining the most profitable combination feasible.
Final Words on product service management
Product management is a B2B marketing technique that comprises acquiring, developing, sustaining, and improving product-service mix in response to market possibilities.
Factors such as customer demands, management strategies, costs, financial situation, competitors, product quality, government regulations, the stages of the product life cycle, and market trends all have an impact on product management.
Product service management is critical to marketing because it affects brand positioning, boosts the company’s success, provides the product a personality, and enhances its reputation.