Blackblot PMTK Methodology™ Product Management Glossary

Many perspectives abound as to what the marketing and product management disciplines are responsible for and how to define them. These interpretations vary significantly to a point where job titles and their associated responsibilities are interpreted very differently by different companies. This diversity also influences the professional terminology that shapes corporate processes.

It is therefore useful to have a set of clear definitions that help establish a common understanding. The following are Blackblot's definitions as they are used throughout the Blackblot Strategic Product Management™ training program, Blackblot Product Management Professional™ certification program, and the Blackblot Product Manager's Toolkit® (PMTK) methodology.

Blackblot views product management as an occupational domain that holds two professional disciplines: product planning and product marketing. Product management, product planning, and product marketing are three key terms defined by Blackblot as follows:

  • Product Management - occupational domain which contains two professional disciplines: product planning and product marketing.
  • Product Planning - ongoing process of identifying and articulating market requirements that define a product's feature set.
  • Product Marketing - outbound activities aimed at generating product awareness, differentiation and demand.


Based on the premise of the above key terms and their definitions, Blackblot has developed a list terms that it uses in its training programs and material. For a comprehensive list of Blackblot's product management terms and their definitions, please view the scroll box below.

Download the Blackblot Product Management Glossary in PDF format.

BLACKBLOT TERM

BLACKBLOT PMTK METHODOLOGY™ DEFINITION

Actual Relative Value

The ratio of benefits and costs[customer] the product factually delivers to customers.

Actual Resultant Value

A fixed combination of gains in time, cost, and status the product factually delivers to customers.

Actual Value

The measured and validated worth that the customer or similar customers factually obtain from owning and using the product.

Actual Value Formula

Actual value = actual resultant value + actual relative value

Advertising

Non-personal communication from an identified sponsor using mass media.

Allowances (Pricing)

A conditional refund in form of a deduction from the list price in exchange for customer action.  Allowances are often accomplished in two forms: Trade-in (pricing) – an item of property given in part payment upon purchase; Rebate (pricing) – customer receives reimbursement for a portion of the purchase price, in exchange for customer information.

Analyst Relations

The bi-directional information exchange with financial analysts and industry analysts to inform and favorably influence them.

Bait Pricing

Pricing that aims to attract customers with low prices with intent to sell higher-priced items.

Base Price

The initial price of a product before any alteration.

BDM Buyer

Business Decision Maker buyer.  The person who has the ultimate decision-making power to purchase a product or not.

Benefits

Product features that are desirable to the customer.

Blackblot Product Frames Model

A descriptive model that demonstrates how product functionality is built and how, in total, the product solves the market problem.

Blackblot Product Manager's Toolkit® (PMTK)

PMTK is a comprehensive set of tools and accompanying methodology that illustrates notable best practices and processes which help create successful market-driven products.

Brand

An identity, made of symbols and ideas, which portrays a specific offering from a known source.

Business Case

Examination of a potential market opportunity on a product level.

Business Competence

The set of professional skills and knowledge that relate directly to performing product management.

Business Development

Actions that improve the performance of the enterprise, its access to markets, and its ability to compete by creating strategic relationships with logistical, content, and technological partners.

Business Plan

Examination of a potential business opportunity on a company level.

Business Products

Products intended for resale, for use in producing other products, or for providing services in an organization.  Business products are used for making money.

Business Strategy

Decisions that support being a leader, follower, or innovator in a specific line of business.

Business To Business

The transaction of goods or services between businesses (B2B).

Business To Consumer

The transaction of goods or services between businesses and private individuals (B2C).

Buyer

The entity that decides to obtain the product.

Captive Product (Pricing Tactic)

An imbalanced price ratio between a product's components which are sold separately.  The main system component is underpriced and the consumables or support services are overpriced.  The captive product pricing tactic can be quickly and easily accomplished via product system decoupling.

Client

The entity that is the receiver of goods or services.

Company Core Competency

A company's unique ability to deliver value, while differentiating itself from the competition.

Competitive Advantage

A depiction that the company or its products are each doing something better than their competition in a way that could benefit the customer.

Competitive Advantage Formula

Competitive advantage = corporate quality + product quality

Conditional License

Expiring ownership and usage rights to a product.  Can be renewable and non-renewable.

Consumer

An individual or household that buys and uses goods and services created by industries.

Consumer Problem

A marketplace situation in which consumer needs remain unsatisfied (B2C).  The solution is a whole product.

Consumer Products

Products intended for use by household consumers for non-business purposes.  Consumer Products are used for personal gain.

Corporate Branding

The process of building and maintaining a brand at the institutional level.

Corporate Marketing

An outbound activity aimed at generating awareness and differentiation to the company.

Corporate Mission Statement

A formal statement that a company makes about its reason for existing briefly describing the company's general business direction and the value customers should expect to receive.

Corporate Quality

A state in which the company delivers a relationship more rewarding than customers expected.

Corporate Vision Statement

A message that summarizes the company's purpose and intent and describes how, in the future, its products and activities shall affect the world.

Costs[Customer]

The aggregate expenses incurred by the customer from buying and using the product (essentially Total Cost of Ownership or TCO).

Credibility

The quality of being believable or trustworthy.

Credit Terms

Schedule for delayed payment(s).

Customer

The entity (consumer or company) that takes (financial) responsibility for purchasing the product.  Often the realm to which the buyer and user belong.

Customers' Expectations

The hopes for deriving benefits from the product and establishing a rewarding relationship with the vendor.

Demand (Economics)

Quantity of a product that will be bought in the market at various prices for a specified period.

Demand (Marketing)

Wants for specific products coupled by an ability to pay for them.  The demand formula is Demand = want + buying power.

Demand-based Pricing (Pricing Tactic)

Rapidly adjusting prices per customer according to market characteristics.

Derived Price

Price that is determined based on attributed benefit.

Disclaimer

Denial of responsibility to events occurring during product ownership to discourage current or future legal action.

Discrimination (Pricing Tactic)

Charging different market segments different prices for same product.  There are several levels of discrimination: First Level – price discrimination that is based on the ability to pay (charge per income).  Second level – price discrimination that is based on artificial obstacles (same price yet coupons, advance purchase, restricted use).  Third level – price discrimination that is based on external factors (gender, age, geography, or profession).

Diversification (Pricing Tactic)

Creating product variants with distributed price points.

Domain Expertise

Knowledge in the technical and business aspects of the product, industry, market, and technology.

Durability (Product)

How long the product maintains a level of performance without degradation.

Dynamic Pricing (Pricing Tactic)

Rapidly adjusting prices per customer according to customer characteristics.

End-user License Agreement (EULA)

Perimeters of usage and ownership rights granted to the customer.

Expert User

A user that has considerable experience with the product and utilizes many advanced features (power user).

Functional Expertise

Knowledge in processes, tools, and techniques to plan/market products.

Global Discount

Universal, non-discriminatory, non-conditional deduction from the list price, for enticement purposes.

Goods

Tangible products we can possess.  Segmented to durable and non-durable.

Graphic Arts

The conception and copywriting of all collateral material.

High-tech Company

A business entity that either develops technology that is incorporated in a product or is used in the assembly or manufacturing of a product, or manufactures a product that contains technology and that same product relies on that technology to perform its core function.

Impact

A positive or negative consequence that will most likely occur when embarking on a product development and delivery project.

Industry

A group of companies which produce and sell a particular product type.

Innovation

The introduction of a product that is new or substantially improved.  Innovation is the process of converting and commercializing an invention into a product.

Innovation (Formula)

Innovation = invention + utilization

Invention

An idea which represents a revolutionary or evolutionary change.  Invention improves an existing solution or offers a conceptually new solution to a problem.

Licensing

A method of providing rights to usage and ownership to a product, for a specified price and/or term.

Licensing Mix

A combination of perpetual and term licenses relative to a particular product.

Longevity (Product)

How long a product lasts.

Loss Leader

A product that is priced below cost to attract consumers to buy other items.

Management By Objectives (MBO)

A systematic approach for instilling flow and structure in one's work by setting clear, achievable, measurable, and challenging goals.

Manufacturer

The entity that produces the product or service.

Margins

Direct financial gains by selling.

Market Intelligence

An ongoing real-time market data collection and analysis process.  Market intelligence builds a body of knowledge.

Market Opportunity

A lucrative, lasting, and sizable market problem.  Market opportunity = market problem + volume + duration + earning potential

Market Plan

A description of the long-term goals and messages delivered to the target market relative to a particular company or product.

Market Problem

A consumer, product, or technology problem in the target market.

Market Requirement

An aggregate unit of information which represents with sufficient detail the functionality that is sought to address a specific facet of a particular market problem.

Market Requirements Document (MRD)

A written representation of the overall functionality that users seek in order to address a particular market problem.

Market Segmentation

A division of the overall market for a product into groups of common characteristics.

Market Strategy

Decisions that define target markets, set marketing objectives, and outline how to build a corporate competitive advantage.

Market-driven

A product delivery strategy that is based on producing and delivering products that the market needs.

Marketing

An instructive business domain that serves to inform and educate target markets about the value and competitive advantage of a company and its products.

Marketing Communications

The employment of a mix of media vehicles that support marketing objectives.

Marketing Mix

A combination of product, price, place [distribution], and promotion activities that are applied to a particular target market.

Marketing Plan

A description of the selection and application of marketing mixes in the target market.

Marketing Program

A short-term marketplace effort designed to obtain a specific marketing goal.

Marketing Strategy

The decisions that determine how to achieve marketing's goal in a particular target market, through the selection and application of marketing mixes.

MSRP

Manufacturer's Suggested Retail Price.  The price the manufacturer recommends that the seller offers the product for. 

Need

A state of felt deprivation (condition or motivation in which something is sought after to effect a change).

Niche Market

A small overall market or small market segment.

Novice User

A user that is new to the product (newbie).

Odd/Even Pricing

Ending the price with certain numbers to influence buyers' perceptions of the price or product.

One-time Fee (Licensing)

A one-time fixed charge that enables constant use of the product.

Overall Market

All customers who share a common need.

Payment

The actual economic sacrifice a customer makes to acquire certain rights to a product.

Payment Forms

Means of payment such as cash, credit card, check, or wire transfer.

Payment Terms

Payment conditions such as currency type, letter of credit and purchase prerequisites.

Penetration (Pricing Tactic)

Briefly charging a relatively low price upon product launch.

Perceived Value

An unsubstantiated estimation of worth that the customer obtains or could potentially obtain from owning and using the product.

Perceived Value Formula

Perceived value = resultant value proposition + relative value proposition

Perpetual License

Non-expiring ownership and usage rights to a product.

Personal Competence

The set of individual personality traits which enable individuals to manage themselves independently and capably.

PMTK MVP Model

A market-value centric pricing process which guides sets of managerial decisions that help determine a product's price.  The Blackblot PMTK MVP Model™ is comprised of three distinct components that effectively act as sequential stages in the pricing process: pricing scheme, pricing formula, and price mix.

Positioning

The customer's unique psychological placement of the relative qualities of a product or company with respect to its competitors.

Price

A specification of what a seller wants in exchange for granting right of ownership or use to a product.  The price formula is Price = costs + margins.

Price Discounts

Deductions from the list price.

Price Elasticity of Demand

Percentage change in quantity demanded that occurs in response to a percentage change in price.

Price Lining

Pricing of products in a product family with corresponding price points.

Price Mix

A price-related aggregate of information and conditions that the customer is presented with.

Price Modifiers

Conditional deduction from the list price.

Price Psychology

Dynamic human reasoning process which infers from a product's price, price comparisons, and price changes, diverse messages about the product and company, and accordingly influences buying decisions.

Price Reductions

Universal, non-discriminatory, and non-conditional official list price decreases.

Price Variables

Price changes based on product characteristics.

Pricing

The act of setting a price.

Pricing Formula

A calculative structure that allows the application of pricing changes to specific markets or competitive regions.

Pricing Objectives

A description of what a company wants to achieve through pricing its products.

Pricing Scheme

An outline of the overall pricing approach which encompasses the principles for pricing the specific product.

Pricing Strategy

The primary method to pricing that relies on a particular pricing decision factor.

Pricing Tactics

Pricing actions which are dependent on the particular life cycle stage of the product that is being priced.

Problem

A difficulty.  A situation that requires change.

Product

Any offering that satisfies needs.  Represents a collection of tangible and intangible assets.

Product Attribute

A real characteristic or property of the product.

Product Branding

The process of building and maintaining a brand at the product level.

Product Bundling

An aggregate of products sold collectively at a price that is lower than the sum of their prices.  The price of the set of products is lower than the total of individual products.  Bundling is often accomplished in two forms: Direct bundling – customer must buy the entire package.  Indirect bundling – customer cannot buy product X without also buying Y, in fixed proportions.

Product Category or Class(ification)

A term synonymous with product line in the context of competing products.

Product Family

A set of derived products that share the same technological foundation.  Members of a product family are called product variants.

Product Feature

A product capability that satisfies a specific user/buyer need.

Product Group

A set of products coupled or packaged together to form a new unified offering.  Members of a product group are called product members.

Product Line

A set of products that are technologically different yet provide similar functionality that serve the same target market needs.

Product Management

An occupational domain which contains two professional disciplines: product planning and product marketing.  Expanded definition: An occupational domain that is based on general management techniques that are focused on product planning and product marketing activities.

Product Marketing

Outbound activities aimed at generating product awareness, differentiation, and demand.

Product Mix

An entire set of products offered by a company.  A collection of product units, product lines, product families, and product groups.

Product Planning

The ongoing process of identifying and articulating market requirements that define a product's feature set.

Product Portfolio

A product line in which the products are properly diversified and balanced along the timeline and stages of the product life cycle model.

Product Problem

An industry situation in which product requirements are unmet (B2B).  The solution is a product component.

Product Quality

The market's perception of the degree to which the product can consistently meet or exceed customers' expectations.

Product Requirements Document (PRD)

A high-level description of the solution, intended use, and the set of features it provides that address the market problem and satisfy needs.

Product Review

An independent inspection, analysis, and evaluation of a product by a trusted industry thought leader (often a journalist).

Product Roadmap

A high-level schedule of future product releases with brief descriptions of market requirements and features for those releases.

Product Strategy

Decisions that build and enhance products to fit market needs, and outline how to build a product competitive advantage.

Product Type

A set of products that serve the same specific target market needs, which are technologically and functionally similar.

Product Unit

An individual product that may be offered separately from any other product.

Productivity (Product)

The product's scope of useful features.

Professionalism

The characteristic of being a skilled practitioner; an expert.

Project Documents

The basic documents for managing the development project, including schedules, project milestone criteria, test plans, development plans, and resources.

Public Relations

The actions that promote and distribute information for a company.  Focused on encouraging media coverage of the company and its products, and building a virtual relationship between the company and its target audience.

Quality (Marketing)

The market's perception of the degree to which the company or product can consistently meet or exceed customers' expectations.

Quality (Technological)

The highest MTBF (mean time between failures) and lowest MTTR (mean time to repair) of a product.

Recurring Fee (Licensing)

A fixed charge that enables limited time use of the product, but is renewed periodically at regular intervals.

Relative Value Proposition

An implicit promise a product holds for customers to deliver a desired ratio of benefits and costs[customer].

Reliability (Product)

How long before the product malfunctions.

Reliability (Service)

The company's record of promising and delivering.

Resultant Value Proposition

An implicit promise a product holds for customers to deliver a fixed combination of gains in time, cost, and status.

Risk

A factor or event that may jeopardize the product/project from achieving the anticipated benefits or increase the cost and/or schedule of the product/project.

Risk Contingency

Actions and incurring cost to be used in the future should the risk occur, thereby ceasing to be a risk and becoming a fact (after damage occurs).

Risk Mitigation

Actions and incurring cost to proactively change exposure to a risk while it is still a risk (before damage occurs).

Sales

The act of interacting with and persuading potential customers to buy the product.

Sales-driven

A product delivery strategy that is based on producing and delivering products that a customer wants.

Scenario

A succession of uses cases.

Seller

The entity that sells the product or service.

Services

Intangible products that we pay for and use but can never own.

Site License Discount

Discount provided to a large quantity purchase.  The number of product licenses acquired is estimated.

Skilled User

A user that is comfortable using the product to perform job tasks (average user).

Skimming (Pricing Tactic)

Briefly charging a relatively high price upon product launch.

Social Competence

The set of human interaction skills which relate directly to communicating and managing relationships with others in a professional environment's social structure.

Soft Skills

Non-technical, communicative, and personal abilities used in business.

Solution

An answer which removes or controls the problem.

Strategic Aptitude

The long-term planning and decision-making abilities that help achieve corporate objectives.

Strategy

A coordinated set of long-term decisions that help achieve corporate objectives.  Two common goals of any strategy are to: (1) provide more value than the competition, (2) help build a sustainable competitive advantage.

Subscription Fee (Licensing)

A one-time fixed charge that enables limited time use of the product.

Superior Perceived Value

A state where customers perceive the product gives a net value more positive than its alternatives.

Superior Perceived Value Formula

Superior perceived value = competitive advantage + value

Supply

Quantity of a product that will be offered to the market by suppliers at various prices for a specific period.

Tactical Activities

Assignments, usually self-contained and specific that fulfill short-term business needs.

Tactics

A set of actions taken to fulfill a strategy.

Target Market(s)

The group or groups of customers selected by a firm to sell to.

TDM Buyer

Technology Decision Maker buyer.  The person who has the authority to decide what technology will be used by the company to do work or to develop products.

Technical Specification (Tech. Spec.)

A highly detailed description of the solution's design, attributes, and standards.

Technology Problem

Challenges in applied science.  The solution is scientific research.

Technology-driven

A product delivery strategy that is based on producing and delivering products that we conceive.

Unique Selling Proposition (USP)

A key statement that describes the distinct and compelling value of the product, which sets the product apart from other competing products.

Usability

Ease of operation.

Usage Fee (Licensing)

A charge per unit of measure that is tallied at regular intervals.

Use Case

A specific way of using the product by performing some part of its functionality. 

User

The entity that interacts with the product.

Value

The worth derived by the customer from owning and using the product.

Value Formula

Value = benefits - costs[customer]

Voice Of The Customer (VOC)

The process for eliciting needs from customers.  It embodies a market-driven approach that involves spending time with current and future customers to determine past, present, and future market problems that customers need to solve in order to meet their business goals and objectives.

Volume Price (Discount)

Discount provided to a large quantity purchase.  The exact number of product licenses acquired is stated.

Want

A request for specific objects that might satisfy the need.