Image Credit: Amazon
The Christmas season has always been the time that home owners take the time to decorate the outside of their homes to celebrate the season. What this generally involved was going into either the attic or the basement in order to drag out box after box that contain outside lights and decorations. Once this had been done, next came the physical challenge of putting up all of the lights and finding enough extension cords to connect them to outlets so that they could be turned on. This was a strenuous undertaking that nobody ever looked forward to. This was all before lasers got involved.
Say Hello To The Christmas Lasers
I believe that it was last year when I was walking my dogs around neighborhood at Christmas time that I first encountered Christmas lasers. A few of the homeowners had purchased small laser projectors that looked like a normal flood light and had positioned them so that they pointed towards the house. When it got dark out, these laser projectors displayed a brilliant collection of red and green laser dots on the house.
The appearance was very nice. The time that it took to stick one laser projector in the ground and turn it on was fantastic – this took much less time than crawling along your roof and hanging traditional Christmas lights took. However, last year the problem was, as told to me by one of my neighbors, was that the laser projection system was so popular that the stores were all running out of them – they were nowhere to be found. This problem is not going to look good on someone’s product manager resume.
This year the supply problem seems to have been solved. A large number of the houses in my neighborhood were lit up by laser display systems this time around. What made things even more interesting is that the systems had been improved over what was available last year. This time around the laser lights had the ability to move and this caused the lights to dance over the face of the house and points of light could come together to make stars and then break up again. The resulting images were very nice and very Christmas.
The Challenge Of Keeping Your Channels Happy At Christmas
As nice as all of these Christmas laser lights were, there were some serious product manager issues going on behind the scenes. The manufacturer of the Star Shower Motion laser projection system, Telebrands Corporation has been both surprised and pleased at how popular their product has become. A part of every product manager job description is to try to sell as many copies of our product as possible. What this meant for Telebrands is that this year they were selling their product through standard retailers (Walmart, Target, etc.) as well as online through Amazon. This is where the problems started.
Amazon wants “… customers to come to Amazon and find the lowest prices.” What this means is they have an impressive array of technology deployed to watch what other retailers are selling a product for so that Amazon can sell the same product at a lower price. After Thanksgiving and before Christmas, Telebrands watched their product shoot up Amazon’s sales rankings list. This was great news, but their product had become the object of an online price war between the different retailers who were all offering the same product.
Telebrands offered their product to all retailers for the same wholesale price: US$30. Traditional retailers provide the bulk of Telebrands sales and Amazon only really contributes about 2% of sales. It turns out that Amazon’s frequent online price changes are challenging retailers. The Amazon product managers have shown that they are willing to give up profits on one item in order to attract customers whom they hope will purchase multiple items all at the same time. Amazon will lower their prices to grab more market share. What this means is that Telebrands is going to have to find ways to keep all of their channel partners happy next year.
What All Of This Means For You
It is the dream of every product manager that we create a product that has such a great product development definition that everyone wants to get their hands on it. The product managers at Telebrands seems to have done this when they created their Star Shower Mobile Christmas laser product. Now all they have to do is to find a way to manage their product’s explosive growth.
When this product first became available last year, it was in short supply because of the overwhelming demand for it. However, this year they have enough product that they are able to sell it through traditional retailers like Walmart, Target, and Bed Bath & Beyond. This year they also started to sell the product online through Amazon. This is when they started to run into problems. Amazon was able to offer the product at a lower price than other retailers because they were willing to generate lower profits in order to capture more customers. This made life very difficult for the traditional retailers and they complained to Telebrands.
All product managers want to find a way to sell more of their product. The Telebrands product managers clearly have a hit on their hands right now. Next year Telebrands is going to have to find a way to very carefully balance their different types of channels against each other.
– Dr. Jim Anderson
Blue Elephant Consulting –
Your Source For Real World Product Management Skills™
Question For You: Do you think that Telebrands made a good decision when they selected Amazon to sell their product online?
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What We’ll Be Talking About Next Time
Product managers for bar code scanners have it pretty good these days. Their products are in high demand by companies such as Amazon who operate the large warehouses that contain thousands of items, each identified by a unique bar code. These scanners, often called a “brick on a stick”, are used thousands of times each day by workers as they locate and select items from storage to be shipped. However, this is not good enough and the product managers are planning some radical transformations for their product’s product development definition.