Tuesday, September 7, 2010

Book Review: "Product Management: Value, Quality, Cost, Price, Profit and Organization" by H.E. Cook

5 Stars (out of 5)

The following is a book review of "Product Management: Value, Quality, Cost, Price, Profit and Organization" by Harry Cook. The book was first published in 1997 by Chapman & Hall.

"Product Management" is the result of  an academic collaboration with industry which strove to provide tools to guide product managers through decisions that involve both technical and commercial feasibility. The book is written for the scientifically minded and mathematically inclined audience and is a seminal work for other "Value Driven Product Management" books. The specific contributions to the domain of product management include: (1) explains the role of product value in product management decisions, (2) offers analytical models for calculating product value, (3) offers analytical models for calculating the value of continuous product attributes, (4) offers analytical models for calculating the value of qualitative product attributes, and (5) provides rigorous support for models based in economics, econometrics, game theory, and psychology. The book is clearly written, has an excellent bibliography, and uses real-world examples to illustrate main points.

The models that Cook offers have been criticized for requiring large amounts of data. This is not the case however, as what makes the models so powerful is that they can be initially parameterized using best guesses and continuously
refined by investing in market research to reduce risk. The organization not only benefits from the model's predictive power, but also by going through the process of model parameterization as it focuses the team on the important variables and assumptions.

One area where the book is particularly unique is Cook's chapters on quality improvement. The product management models are tied together with concepts such as Taguchi's methods and Statistical Process Control (SPC) to show how value can be included in the product management decision calculus (traditionally the focus is on cost reduction in quality). 

In summary, "Product Management" is an excellent contribution to the area of Value Driven Management and is highly recommended for marketing and general managers of products with either high price tags (auto, computers, etc.) or high volume who compete in highly competitive markets. This book would also be a good addition to the library of quality managers because of the attention given to the link between product value and quality.

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