Standards

Certification

Education & Training

Publishing

Conferences & Exhibits

Economics for Product Managers: It’s Not Just for Professors and BankersMike Boudreaux

Product Manager

Emerson Process Management

“The question isn't what are we going to do. The question is what aren't we going to do." – Ferris Bueller

3http://www.flickr.com/photos/livenature/4034863015/

4http://en.wikipedia.org/wiki/Microeconomics

5http://en.wikipedia.org/wiki/Home_economics

http://www.flickr.com/photos/trackrecord/54515014

7http://www.flickr.com/photos/francesco_veronesi/3566479837

8

“A strategy is a plan of action designed to achieve a particular goal.” – Wikipedia

http://www.flickr.com/photos/ollesvensson/4252196844

9

a

Market Conditions

Technology

Resource scarcity

Objectives ConstraintsPlan to

optimize results

10

“Strategy is making trade-offs in competing. The essence of strategy is choosing what not to do." – Michael Porter

http://en.wikipedia.org/wiki/File:Southwest_Airlines_Cabin.jpg

11http://www.flickr.com/photos/robie06/4394748067

12http://www.flickr.com/photos/fotoosvanrobin/2545857883

13

Quality

Time

Cost

Size

14

Secure

Usable Cheap

15

Use

r E

xper

ienc

e

Number of Features

Flexibility

Ease of Use

http://www.flickr.com/photos/pauldcocker/3003668632

17http://www.flickr.com/photos/ableman/534155207

“It would appear, Hopkins, that your gut feel was only indigestion.”

Source: Product Manager’s Desk Reference, Artist Timo Elliot

19http://www.flickr.com/photos/acaben/541334636/

20

http://www.ansi.org/

22

23http://www.flickr.com/photos/adstream/1495683304

Effort

Va

lue

24

Keep the lights on

High value enhancement

Breakthroughproduct

Waste ofeffort

25

Cost (C)

CustomerSurplus(B – P)

Profit(P – C)

Benefit (B)

Price(P)

Cost(C)

Value(B – C)

26

Benefit (B)

Price(P)

Cost(C)

Product A Product B Product C

Consumer Surplus (B - P)

Profit (P - C)

Cost (C)

Effort

Va

lue

27

20%

60% 20%

0%

28

Effort

Va

lue

Effort Value

Poor fitUtility / main-tenanceNew productEnhancement

29

Effort

Va

lue

30

31

Effort

Va

lue

Effort Value

Poor fitUtility / main-tenanceNew productEnhancement

32

Effort Value

Poor fitUtility / main-tenanceNew productEnhancement

33

Project 1 Project 2 Project 3 Project 4 Project 5 PriorityMeet standards/specsImprove User experienceImprove Ease of useImprove Speed of useImprove reliability

EffortValue

Priority RatingRank 1 2 3 3 5

34

35

Project 1 Project 2 Project 3 Project 4 Project 5 PriorityMeet standards/specsImprove User experienceImprove Ease of useImprove Speed of useImprove reliability

EffortValue

Priority RatingRank 3 4 2 1 4

36

Project 1 Project 2 Project 3 Project 4 Project 5 PriorityMeet standards/specsImprove User experienceImprove Ease of useImprove Speed of useImprove reliability

EffortValue

Priority RatingRank 3 2 4 4 1

37

Project 1 Project 2 Project 3 Project 4 Project 5Meet standards/specsImprove User experienceImprove Ease of useImprove Speed of useImprove reliability

Effort

BalancedUsabilityReliability

38

Price

Mee

t spe

cs

Suppo

rt

Reliab

le

Prove

n te

chno

logy

Easy t

o lea

rn

Easy t

o us

e

Flexibl

e

New te

chno

logy

0123456789

10

Price Buyer

Visionary

Conservative

Industry

Application

BuyerType

39

Industry

Application

BuyerType

40

Industry

Application

BuyerType

41

Industry

Application

BuyerType

42

Industry

Application

BuyerType

43

http://www.npd-solutions.com/serverppm.html

45Used with permission from http://www.pragmaticmarketing.com/

46

47http://www.flickr.com/photos/uggboy/4593866108

48

49http://en.wikipedia.org/wiki/Ideal_firm_size

50Used with permission from http://www.pragmaticmarketing.com/