Some companies believe that under the functional approach, responsibility for results on both new products and established products is not clearly fixed, but rather tends to be diffused throughout the whole organization. There is lack of accountability for product development and other critical management responsibilities on individual product lines. Although product management originally was developed for manufacturing businesses, the same principles can be applied effectively in many life companies. It is simply an organizational concept which enables a company to concentrate marketing and business management efforts on a given product or product category. The need for it generally arises when a company has a number of products to promote and senior management finds it difficult to devote sufficient attention to each one.
Product management fixes responsibility and encourages initiative and entrepreneurial thinking.
It increases focus on the market and facilitates development of effective marketing strategy. Product management takes the approach the chief executive officer uses at the corporate level and brings it down, with appropriate modifications, to the individual product line level. It permits the company to manage each product line as a separate business. Product Management Evaluation Study William Wichman Associates, Inc. uses two principal tools to assist management in developing the product management function. The first is an evaluation study designed to determine if product management should be established.