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Product Managers At Garmin Need To Find Ways To Sell More GPS Products

How do you find your way around these days? If you are like most of us, you probable own one of those pocket sized GPS receivers that show you a map of where you are and how to get to where you want to go to. Lots of companies make these, but Garmin was one of the first and still holds a big chunk of this market. How are their product managers doing this?

Why Selling Directions Is Hard To Do

If you haven’t seen one of these GPS units, then what rock have you been living under? You may not be able to make a phone call on them, but they are pretty much the coolest thing since the cell phone. I own the Nuvi 200 unit and I like it so much that when I travel for business I take it along and use it in the rental car.

Now you do need to feel some sympathy for the Garmin product managers. Nowhere on their product manager job description did it ever say that their job was to produce the perfect product. In fact, nobody would want to do that because then every customer would be a one-time buyer. “Thanks for the product, I’ll see you, like, never”.

Selling GPS map units requires a bit of strategic management on the part of the Garmin product managers. I’m sure that it wasn’t long after they introduced these products that at least one Garmin account manager and business development manager dropped by the product manager’s office and complained that there was no way to get repeat business.

It turns out that they were wrong. For you see, maps are constantly changing. Maybe not a lot, but new roads are always being built and old roads are going away. This means that the map database in that little US$200 GPS navigation unit might have been correct when you bought it, but over time it’s going to get out of wack with the real world.

This is when the Garmin product manager had a great idea: why not sell map database updates to their existing customers. This is the kind of breakthrough idea that can go onto a product manager resume. This is exactly what Garmin (and all of the other GPS manufactures) does today.

How To Put A Price On Accurate Directions

If you want your customers to come back to you and purchase upgrades to the products that they already own, the trick is to get your pricing right. This means that your price for the “refresh” needs to be not too high and not too low.

In the case of Garmin, here’s how they do it. The actual Garmin GPS unit costs about US$200. They’ve priced a single map upgrade at US$48 and a lifetime upgrade for a single device at US$120. Can you see what they are doing here?

If you are getting ready to go on a trip and you remember that you purchased your GPS unit over a year ago, you might be thinking that those maps might not be accurate any more. That US$48 update price is probably right on the border of being reasonable: if it was any more you might as well go get a new GPS receiver, at that price you’ll probably just purchase the map update.

I would suspect that very few people buy the US$120 lifetime option – but the product managers need to offer it just to catch the few people who will want it. This pricing is a delicate thing: get it right and you’ll have a nice revenue stream, get it wrong and your competition will have your customers.

What The Future Holds For Garmin’s Product Managers

The world is changing and the Garmin product managers need to adjust with it. Those cell phones are getting smarter and are coming with more sophisticated mapping tools. Garmin needs to adapt to this changing world.

It’s once again time for some strategic management. A stand-along navigation device probably won’t last for long. Creating a Garmin app that runs on the popular cell phones might do the job. Alternatively, creating the ability to run apps on the Garmin device would allow the GPS receiver to become more of an optimized local search tool – something that customers would probably desire and be willing to pay for.

What All Of This Means For You

As product managers we need to take the time to learn from other product managers so that we’ll know how to handle the challenges that our products will eventually encounter.

The Garmin product managers have created a great product with one problem: customers don’t have to buy another one. They’ve solved this problem by offering their existing customers map database updates. The key to doing this successfully is to get your pricing right: not too much, not too little.

The future holds many challenges for GPS receiver product managers. Their product is going to undergo many changes and they need to be able to adapt to all of these changes. We need to keep our eyes on them, learn how they adapt, and we can all become better product managers.

- Dr. Jim Anderson
Blue Elephant Consulting –
Your Source For Real World Product Management Skills™

Question For You: How much longer do you think that there will be a market for stand-alone GPS receivers?

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What We’ll Be Talking About Next Time

Come with me while we travel back in time, not far, just 5 years or so. Now that we’re here, take a look around. What do you see? I bet you see just about all of those corporate folks using their Blackberries to make calls and check email. Poof! Now we’re back in current times. Something has gone horribly wrong at the Blackberry parent company, RIM, and is it the fault of RIM’s product managers?

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Product Innovation Is Like Building A Pyramid

What’s your plan for making your product a success going forward? Hoping some magic fairy shows up and makes your competition go away overnight? Well good luck with that! I suspect that your management is probably pressing you and your product team to do some of that “innovation” stuff. Got any ideas on how to make it happen?

The Two Flavors Of Innovation

We all think that we know what innovation is, but do we really? We view innovation as being the process by which successful products get invented like the iPhone, the Kindle, etc. However, those product teams have access to some sort of magic pixy dust that the rest of us can’t touch. How are we supposed to use innovation to make our products better?

Really smart people, like Dr. Rosabeth Moss Kanter, have taken a close look at this innovation thing and they’ve discovered that not all innovation is created the same.

What they’ve found is that there are actually two different types of innovation. The first is what we’re all familiar with: the blockbuster breakthrough thought. This is the kind of thinking that produced the iPad. Not bad – if only product managers could have these types of thoughts every day!

Thankfully there is another type of innovation. This is the incremental change type of innovation. It’s a much smaller type of breakthrough, but we have a lot more of them and they turn out to be just as important.

For you see, the blockbuster breakthroughs are built on top of a whole bunch of incremental breakthroughs. In fact, the researchers have discovered that you really can’t have a blockbuster breakthrough if you don’t have a bunch of incremental breakthroughs in order to support the blockbuster.

How To Innovate With Your Product

I can almost hear you saying, “oh great, so now not only do I have to have blockbuster innovations, but now I also have a bunch of incremental innovations…” Well, yes and no.

Instead of getting all tied up in knots about what you do or don’t have to do in order to innovate with your product, it might be simpler to implement a framework for allowing innovation to happen.

One way to do this is to look at innovations as they relate to your product as being organized in a pyramid fashion. At the base of the pyramid are all of the little ideas that are always popping up about how the product can be improved. These can come from anywhere: internally or from customers.

The ideas that are “no-brainers” need to be implemented right away. The ones that will require some time and investment, but which look promising should be thought of as moving to the next layer of the innovation pyramid.

At this level, investments are made, changes happen, and innovation starts to become apparent in different parts of the product if you look at it hard enough. Nothing revolutionary, but the product does keep getting better.

The final stage of the pyramid is the top. This is where the big ideas get kicked up to. These ideas require the product manager and the firm to make a big bet on where the world is headed. If your senior management agrees, these ideas are the ones that will create the breakthrough innovations for your product that everyone will be talking about.

What All Of This Means For You

Since you are responsible for the success of your product, you need to make sure that both you and your team keep innovating and making the product better and better. That means that you’re going to have to find ways to make innovation happen.

It turns out that there are more than one type of innovation. There are the big innovations that get all of the press and then there are the incremental innovations that are needed to allow the big innovations happen.

Product managers need to implement a framework that allows innovative ideas to be collected into a pyramid of innovation that will allow good ideas to be implemented no matter if they are small, medium, or breakthrough in size.

Innovation is a core requirement for every product – every product has a half-life and you need to be adding value to it in order to ensure its success. Use this deeper understanding of innovation to show your management and the market that your product is the most innovative.

- Dr. Jim Anderson
Blue Elephant Consulting –
Your Source For Real World Product Management Skills™

Question For You: Should a product manager be responsible for picking what innovative features to implement or should it be someone else?

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What We’ll Be Talking About Next Time

I find myself telling the product managers that I’m working with that they need to understand that one of a product manager’s most important jobs is to give good direction to their sales teams: who will buy your product. You may think that you know the answer, but like the product managers for 5-Hour Energy Shots you might be wrong…

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Sometimes The Copy IS Better Than The Original

Every product manager dreams of his / her product turning into the next iPhone, or Google search engine, or some other runaway success like that. However, as we all too well know, the odds of that ever happening are actually pretty slim. However, maybe there’s another way to become successful and famous. Maybe the key to Product Management stardom is not in being an innovator, but rather in being a really, really good copycat?

You Mean I’m Allowed To Copy Off Of Others?

Would you like to know an ugly little secret? Dr. Oded Shenkar has been studying this area and he’s discovered that roughly 97.8% of the ultimate value that an innovation creates will end up going to the imitator firms, not the inventor firm.

Dr. Shenkar also points out that the world of copycats is moving even faster these days. In the old days it took a long time to copy someone else’s product, now not so long. A case in point is the mini-van that was invented by Chrysler back in the 1980′s. It was another 10 years before another car company came out with an imitation. On the other hand, CD players were imitated after only 3 years.

Just Making A Copy Isn’t Enough

Before you run off to go buy a copy of whatever your competition is making so that you can start to stamp out clones of it, you might want to wait for just a minute. Making exact copies of someone else’s product is going to get you in trouble with the patent office and it’s not going to help you to be successful.

What a copycat product manager needs to realize is that it’s not enough to copy another product, you actually need to improve on it. This is where things get difficult.

In order to find the right products to copy, a product manager needs to be constantly searching for the next candidate to copy. Where this product is going to be found is never clear – you may have to search far and wide in multiple industries to find what you are looking for.

Once you find a product that would be a good fit for your company to copy, your work as a product manager is just beginning. What needs to be done now is to understand what the core essence of the product to be copied is: why do people like it / use it / want it? What you are going to need to do is to create a way to make it cheaper, better, or faster than the original firm.

Why Aren’t More Product Managers Copycats?

Given that all of the evidence points to the simple fact that product managers who are good at copying what others have done end up being more successful leads to a simple question: why don’t more of us do this?

It turns out that the answer to this question is pretty simple: we’ve been conditioned to think of being a copycat as being “wrong”. Most firms like to think of themselves as being innovators, not as being imitators.

Too often we view the process of creating a copy of an existing product as being in some way undignified. What we’re missing is that if you are taking an original idea and then improving on it, you are well on your way to product success.

What All Of This Means For You

Apple is a great company that comes up with really innovative products such as the iPad. However, time will show that most of the value of the iPad won’t go to Apple – instead it will go to firms that create and deploy copycat products that do a better job than the iPad does.

Although most firms don’t like to think of themselves as being imitators instead of innovators, this is where the real value is. The secret is to make sure that you don’t just create a copy of a product, but rather that you improve on the original in a way that will make it even more attractive to potential customers.

The key to being a successful imitator product manager is to learn to keep your eyes open. Where the next product that you can improve on will be found is always a mystery. To win the race to deliver a successful product, you don’t have to be first, you just have to be the best.

- Dr. Jim Anderson
Blue Elephant Consulting –
Your Source For Real World Product Management Skills™

Question For You: How close to the original product do you think you can come before your product will get into legal trouble?

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What We’ll Be Talking About Next Time

Every product manager dreams of his / her product turning into the next iPhone, or Google search engine, or some other runaway success like that. However, as we all too well know, the odds of that ever happening are actually pretty slim. However, maybe there’s another way to become successful and famous…

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Altria Product Managers Have A Difficult Job To Do…

How times have changed! As little as 10 years ago, cigarette smoking was no big deal – lots of people did it. Since then a lot has changed and a lot of people have very strongly held views on the topic. No matter which side of the fence you fall on, it’s important to realize that just like every other product out there, there are product managers for cigarettes (remember: there are also product managers for things like bullets). The interesting question for us is how do you go about managing a product that creates such strong for / against emotions in your potential customers…?

A New Direction

Pity the poor cigarette product manager. They’ve basically got their hands tied. They can’t target new groups of customers (underage smokers), they’ve got huge health warnings stamped all over the front of their products, and “stop smoking” ads are being run everywhere. What’s a product manager to do?

Over at Altria, one of the biggest manufactures of cigarettes (can anyone say “Marlboro”?), the product managers are trying a different approach.

Altia is in the process of doing some test marketing of a new type of tobacco product: Snus. This is basically a smokeless form of tobacco which will allow their customers to still use tobacco in situations in which they can’t light a cigarette.

As with all things having to do with cigarettes, this marketing approach has caused a great deal of controversy. A number of people have spoken up and said that the product managers are just rolling out this new type of product in order to cause the FDA to focus on it and stop their efforts to restrict traditional cigarette smoking.

Just How Do You Go About Getting People To Smoke More?

Altria is the biggest producer of tobacco products out there. It turns out that they already own about 50% of the cigarette market and about 55% of the smokeless market.

Even as the Altria product managers work to roll out new products, the brand managers have to face a harsh reality: cigarettes are where the money is. Last year they brought in $14.4B (yes, that’s Billion) in revenue while the smokeless products only brought in $1.2B.

No matter what you think about smoking or tobacco companies, deep down in your product management heart just like the rest of us you secretly wish that your customers just couldn’t get enough of your product. Well, cigarette product managers have had this wish come true: 40% of smokers try to quit every year, but only 2.5% succeed.

Past cigarette product manager attempts to roll out new products have had mixed success. The so-called “light” cigarettes have captured about 90% of the U.S. market; however, studies have shown that customers tend to inhale these cigarettes more deeply.

How Can You Make Smokeless Tobacco A Successful Product?

Let’s play a game and pretend that you were the product manager for a new smokeless tobacco product? What would you do to make it a success. Remember that there have been precious few new tobacco products introduced over the past few decades that have been a success.

One thing that might work for you is to look for a way to differentiate your product. One way to do this is to add flavors to them. Over at Altria the product managers are doing this very thing. It’s been quite successful: flavored versions of the Snus product now make up about 56% of their sales.

This approach comes with some problems. If you are too successful, critics are going to point out that you may be trying to attract the wrong audience: kids.

What All Of This Means For You

Being a product manager is a difficult job. Being a product manager at a cigarette company is especially difficult. The selling of cigarettes is becoming more and more difficult and so product managers are looking for new tobacco products to sell.

Just like product managers everywhere, cigarette product managers are looking for new products to introduce to their customers. Smokeless products appear to be one way to do this. Adding flavors to these products boost their popularity; however, they may start to make them attractive to the wrong types of customers.

If you were offered the job of being a cigarette product manager would you take it? If times were tight enough, yes you probably would. Would you be able to successfully introduce a new smokeless product? Only time will tell…

- Dr. Jim Anderson
Blue Elephant Consulting –
Your Source For Real World Product Management Help

Question For You: If using different flavorings for smokeless products gets banned, what do you think the product manager’s next step should be?

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What We’ll Be Talking About Next Time

When it comes time for you to go looking for your next Product Management job you’ll be facing a major decision. I’m not talking about if you should use online resume services or go with a headhunter. I’m talking about something even bigger – the question of whether or not you should create a cover letter when you send someone your resume.

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How To Capture Innovation Without Making Your Product Too Expensive

How are you at walking and chewing gum at the same time? It’s sorta a classic challenge – do two different things simultaneously and do them well. Product managers are facing the challenge today – cut the cost of their product and simultaneously use innovation in order to make their product more competitive. How hard can that be?

Say Hello To Six Sigma

If you are like me, you are always on the lookout for the “next big thing” in product management techniques. I do most of my research at the bookstore. If you’ve been to a book store recently and looked at any of the books in the business section, you may have been overwhelmed by the number of titles that had the words “Six Sigma” in them. Six Sigma is an approach to business that makes use of constant measurement and analysis in order to continue to optimize business operations.

Dr. Sara Beckman has researched this technique and points out that Six Sigma was invented at Motorola and popularized by Jack Welch at GE. If you can get your product teams to apply it to how your product gets built, it can be a great way to drive out costs and boost quality. However, it will do nothing to boost innovation.

Say Hello To Design Thinking

Innovation is not something that you often hear about when people are talking about product managers. However, since we are the CEOs of our products we are the ones that are responsible for making sure that our products remain attractive to our customers.

Innovation is how this will happen. One way for product managers to work innovation into their products is to use the “design thinking” technique.

Design thinking is a new set of skills that are designed to drive innovative thinking. The starting point for design thinking is for solution designers (who else?) to start by focusing on what problems their customers are having on a daily basis. Once they understand the problems, the next step is to consider the wide universe of possible ways to change your product to solve these problems.

The Problem

Here in lies the problem. If you go out and talk to today’s product managers you’ll find that their companies may have implemented one of these two different solutions (Six Sigma is more popular because it’s easier to understand and measure).

This causes problems. It is possible to focus too much on driving out costs and then lose your way and not be able to provide the innovation that is needed to keep your product competitive – this is the problem that HP is currently facing.

Likewise, if a product team is too innovative and doesn’t watch the bottom line closely enough, then they can quickly drive themselves and the company out of business. The dot.com fiasco was a great example of this.

What’s The Correct Solution To This Problem?

You may have already guessed it, but the right way to solve this challenge is for product managers to take the time to find a way to incorporate both the design thinking and the Six Sigma approaches into how they manage their products.

The design thinking technique allows a product manager to find ways to explore new approaches to solving the problems that the business is facing. Six Sigma techniques allow an product team to find ways to improve how they are currently doing things.

Final Thoughts

Product Managers  can’t allow their product teams to become too focused on just one approach or they risk failing. Design thinking tries to find out what product features will provide a good solution to a problem is while Six Sigma assumes that a product is good and then goes about trying to make it an even better product.

Product managers who can find ways to use both cost cutting and innovation capturing techniques at the same time will have have found yet another way that great product managers make their product(s) fantastically successful.

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What We’ll Be Talking About Next Time

Just how many ads for products do you get hit with each day? 10? 100? 500? No matter what the number is, the end result is the same – you shut down. Something in your brain switches off and you stop “seeing” ads because you are in overload…

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Video Game Product Managers Need To Score Big To Survive

So I can only speak for myself, but back in the day I used to be quite good at video games – you know, the big stand alone game units that you could only find in arcades. Since then, I’ve tried to keep up with the home game consoles, but I must confess to having lost my skills.

These days I have to confine myself to an occasional run at Half-Life just to reassure myself that I still have it. Which brings up an interesting point, wouldn’t be be great to be a product manger at a video game company?

The Video Game Industry

If you are the type of person who is easily impressed by big numbers, then try this one out for size. The video game Grand Theft Auto IV brought in over $300M in a single day when it was released. That was double what the most recent Batman movie brought in the day that it opened.

The video game industry and its product managers do have their challenges – things are getting tougher. The cost and complexity of developing video games are rising with every new release. Oh, and you can imagine just how fickle video game customers are – one bad release and your product line could be done for.

What Does It Take To Have A Successful Video Game Product?

Success in the video game industry depends on a combination of solid risk management and savvy research and development. This part of the business will never change. However, the way that video games are sold and how they are being distributed is undergoing a fundamental change that is affecting all product managers.

One new model for video game manufacturers involves subscription online offerings. In this product offering, users can download the game code for free and then they pay a monthly charge to be allowed to connect to servers that generate the game playing environment where all subscribers can play at the same time.

One of the largest video game manufactures, Activision Blizzard, already generates more than $1B in revenue and more than $500M in profit from its World of Warcraft subscription business. Clearly this is the wave of the future.

Another new focus is what gaming experts are calling the “casual” market. This is how video game product managers are trying to expand their potential customer base – they are trying to create products that appeal to game players who don’t have a lot of time to learn complicated rules. One of the better examples of a popular casual game is Guitar Hero.

Another key decision that video game product managers need to make is to pick which game console they will develop games for. For example. games made for the Nintendo DS can be developed more cheaply than those for consoles, manufactures can experiment far more cheaply in ways that they can’t do for the Playstation or the Wii.

The Future Of Video Game Products

The video game business is a rough business to be a product manger in. Publishers need to sell about one million copies of a game on the PS3 or Xbox 360 just to break even. This constant pressure to be successful is generating creative new ideas for product managers.

One new idea that has only just reciently started to show up in video games is the idea of in-game advertising. Sponsered ads can show up on billboards, on character’s clothing, or even as shopfronts in the environment. Because so many of these games are online, ads can be changed over time – nothing is fixed.

An additional way to make money that is just starting to be implemented is that the game is free for gamers to play, but they must pay for extra items such as new gear for their players. With certain market sectors, e.g. teen girls, this can produce rich rewards.

Final Thoughts

Every product manager yearns for the opportunity to be responsible for a product that is truly popular and video games sure seem to fit that description. However, the video game industry is a rough and tumble battlefield that punishes products that fall behind and insists on constant innovation.

Even if you are not working in the video game industry, you can still learn from what they are doing. Moving as much of your product support and update process online to reduce costs and boost customer interaction is one innovation that we can all explore doing.

If product mangers can find ways to work innovations from the video game into how they are managing their products, then they will have have found yet another way that great product managers make their product(s) fantastically successful.

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What We’ll Be Talking About Next Time

Product managers know that how they price their products can be the difference between runaway success and total failure for their products. There is often a great deal of outside pressure on product mangers to change their product’s price all the time. When should a product manger do this, and when should they not?

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If you’ve even come close to a business book in the last 5 years or so, you have probably discovered that “innovation” is what every IT organization is desperately trying to capture, grow, encourage, enhance, etc. Although this sounds like a great idea, and IT product management is one area that would directly benefit from this, it turns out that it’s actually quite hard to do consistently over time. What gives?

One of the key skills that an IT organization needs in order to be innovative and to develop better IT products, is the ability to brainstorm as a team well. We all THINK that we know what it means to brainstorm; however, it turns out that more often than not we are wrong. Too often we think of brainstorming as being a solitary task where we go off an think about a problem until an apple drops on our head and the answer emerges. Matt Bowen who is the CEO of Aloft Group spends a lot of time teaching his marketing firm’s employees how to brainstorm as a group — a much more powerful form of brainstorming. Here are his suggestions for how you can learn to use this powerful tool:

• Creativity Starts With The Hiring Process: When you are inviting people to join your team, you need to make sure that they will be able to contribute to the group’s ability to innovate. This means that you need to understand how they think. A great way to do this is to ask them to tell you stories about jobs that they’ve had. If their storys revolve around creating new solutions than you know that you have a creative type. If instead, they focus on incremental improvements in the way that things are done, then you’re probably talking with an operations person.

• How To Prepare To Brainstorm In A Group: The best way to learn to do this is to jump in and just do it. You will need to have a designated facilitator to lead the process. The first thing that the facilitator needs to help the group do is to very clearly lay out a single sentence that clearly describes what the goal of the brainstorming session is. Distribute this sentence a day or two before the meeting to everyone who will be attending so that they can start to think about it. Also, the facilitator needs to spend some time establishing criteria for how he/she thinks the resulting ideas need to be rated. What’s are the most important characteristics of a solution and how should you rank them?
• Group Brainstorming Rules: Never have the meeting last more than an hour. Limit the size of the meeting to no more than 5-7 people (less if the facilitator is new to this). Try to make sure that the participants come from different departments because this will help to ensure that you get multiple perspectives. Normal brainstorming rules apply: no critiquing, no editing, no such thing as a bad idea, and always try to build on other people’s ideas.

The real key to successful brainstorming lies in what you do AFTER the meeting. The facilitator needs to assemble a group of people to rate the ideas generated by the brainstorming based on the criteria that was established before the meeting. This group can be different from the group that created the ideas.

Finally, don’t you let the resulting ideas die! In order for brainstorming to catch on in any IT department the staff need to see changes occurring that they can clearly relate back to brainstorming sessions. Do this and you’ll have an innovative IT department that will be the envy of the rest of the firm.

Tags: innovation, innovation, program managers, IT products

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