Drucker on Product | The Basic Function of Product Management

"The most productive innovation is a different product or service creating a new potential of satisfaction, rather than an improvement. Typically this new and different product costs more—yet its overall effect is to make the economy more productive."— Peter Drucker, Management: Tasks, Responsibilities, Practices

So the Marketing function is the part of Product Management that is responsible to help the organization know and understand the customer so well, and the Innovation function is the part of product management that helps create a product that delivers new value.

The two functions (as per Drucker) that are part of Product Management are the basic functions of an enterprise.

"Because its purpose is to create a customer, the business enterprise has two—and only these two—basic functions: marketing and innovation."


As such product management is the ultimate cross-functional role, in both understanding the customer (marketing) and in helping create new value (innovation).

Another way to look at these roles is Drucker's marketing is Problem Discovery, and his innovation is Product Discovery.