Frameworks for Product Management Interviews
Frameworks to keep in mind to ace your product management interviews
Product Design Frameworks
Question -
How will you design X for Y?
How will you improve Y?
Circles Method - Lewis C. Lin
Comprehend the situation(Goals and constraints)
Use 5W and H?
What is it?
Who is it for?
Why do they need it?
When is it available?
Where is it available?
How does it work?
Identify the customer
User Persona - Demographics, Needs, and goals
Report the customer's needs
Use cases - As a user...I want...so that...
Cut through prioritization
Cost-benefit analysis
revenue, cost, customer satisfaction
List solutions
Evaluate tradeoffs
Summarize your recommendation
Customer purchase decision making
Context - Useful in discussing how would you market a new product
AIDA(Pre-purchase behavior)
Attention - Everything starts with gaining attention. A snappy email heading, A sneezy ads
Interest - Get them interested in your product. Talk about benefits. Make the differentiation clear.
Desire - Build the want within your customer.
Action - Customer purchase the product
REAN(Post-purchase behavior)
Reach - The customer is aware of your product.
Engage - The customer is engaged and considering your product.
Activate - Customer takes action to purchase your product.
Nurture - The customer has purchased your product. Now is the time to nurture the relationship
Marketing Mix(4 P)
Context - Understand the different aspects of a product's approach to marketing. Useful when discussing the different elements of a marketing plan for a new or an existing product
Product - Value, Customer wants and needs
Price - see pricing frameworks
Place - distribution(online sales through Amazon, distribution in a retail store)
Promotion - Advertising, PR, WOM
SWOT Analysis
Context - How to strategically analyze companies and products. Useful when deciding whether a company should pursue an opportunity and what strategies would further that pursue.
Strength - Internal factors - costs, product feature, company culture, reputation, infrastructure
Weaknesses - Internal factor
Opportunity - External factors - Market growth, Tech changes, competition, legal regulations
Threats - External factors - Regulatory changes
Situational analysis(5 C's)
Context - Overview of the environment for a product or service. Useful when deciding whether a customer should launch a product and what the company strategy should be.
Company - Products, Culture, Brand reputation, Strengths, Weaknesses, Infrastructure
Competition - Direct or indirect, substitutes,
Customers - demographics, purchase behaviors, market size, distribution channels, customer needs and wants
Collaborators - supplier, distributors, partnerships
Climate - Regulation, Technology changes, Economic environment, cultural trends.
Porter's 5 Forces
Context - Framework for industry analysis. Industry analysis can be used when answering market entry questions - Should a company enter a new market and why?
Rivalry among existing competitors
Market growth
No of competition
Strategic stakes(Family business and MNCs react differently)
Cost of exit
Buyer power
Pricing sensitivity
Switching cost - Technical, Emotional
Ability to do backward integration
Supplier power
Switching cost?
Ability to forward integration
How important we are to them
Threat of substitutes
Direct or indirect
The threat of new entrants
Capital requirement
Economies of scale
Learning effects
Brand
Three elements of evaluating a company strategy
Context - When trying to understand the strategic fit of a company
Internal fit - Positioning, Activities, Capabilities, Incentives, Org Structure
External fit - Industry, Competition, Regulatory
Dynamic fit - Competitor reaction, Demand changes, Technology changes
Strategy Audit
Industry-level - Industry analysis(Porter 5 forces) (20% effect)
Positioning-level - Drivers of cost, Strategic positioning, Market positioning (60% effect)
Firm-Level - Value chain, Activity Systems (20% effect)
What is Value?
Willingness to pay = Current price + Cost savings(non-price) - switching cost
How to determine WTP?
Conjoint analysis
Focus group
Auction
Survey
What is a Competitive advantage
CA = Firm's (WTP - Cost) - Competitor's(WTP - cost)
Therefore, to sustain a competitive advantage, the firm has to decide on the strategy(Porter's generic strategy) -
Higher WTP(Differentiation) - Apple
Lower cost(Cost) - Amazon
or both(Focus) - Blue ocean
Some potential strategies that a company typically employ-
Diversifying revenue source - Getting into a new market, or a new category
Building barriers to entry - Facebook acquiring Instagram
Being the one-stop-shop for something/everything - Amazon
Being a low-cost leader - Amazon
Reducing reliance on key buyer or supplier - Google entering a cell phone market
Testing a new market - Google fiber
Pricing Framework
Cost-plus pricing - Examine the product's cost and add a mark-up to decide the price for the product.
Value pricing - Determine the Willingness to pay. How much money users are willing to pay for the product or service.
Competitive pricing - Explore the pricing from competition for a similar product or service. Then decide the pricing based on your product’s positioning.
Experimental pricing - Experiment with different price points and correlate price with the sales volume. But remember, fluctuating pricing may frustrate the customer.
Pricing Strategy
Offensive Strategies
Be the price leader—when the market is mature, there are fewer differentiations, and you decide whether to compete solely on price (mature market).
Price low to penetrate and grow market share (growing market).
Price below cost to discourage competition (growing market).
Compete by price/performance ratio (growing to mature market).
Use promotional discounts to accelerate purchases (growing to mature market).
Defensive Strategies
Use price to segment the market.
Use premium pricing (skim the market) to maximize profit.
Use value-based pricing to price at the highest customer perceived value (only works when there are no competitors yet or when the product is highly differentiated).
Use bait-and-switch pricing to draw attention to a lower price offering and later upgrade customers to a higher-priced offering.
Different pricing models -
Free, Ad-supported - Facebook, Instagram, Spotify, Google
Freemium - Linkedin
Tiered - CAST
A' La Carte - Restaurant pricing
Subscriptions - AWS
Free Trial - Netflix
Razorblade model - Microsoft x-box
Loss leaders - A loss leader (also leader) is a pricing strategy where a product is sold at a price below its market cost to stimulate other sales of more profitable goods or services. With this sales promotion/marketing strategy, a "leader" is any popular article, i.e., sold at a normal price.
Online Advertising
Click-Through Rate(CTR) - No of clicks/No of impression * 100%
Advertising pricing -
Cost-per-click(CPC)/ Cost-per-impression(CPI)/ Cost-per-action(CPA)
Conversion rate - could be per click, per impression, or action.
CPM(To calculate how much to pay to show an ad 1000 times) = CPC * CTR *1000
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