Product Planning is the procedure of identifying and articulating market requirements that define a product’s benefits or features. Product planning works as the basis for decision-making about price, distribution and promotion. Product planning is the process of creating a product idea and following the idea until the product is introduced to the market.
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Definition of product Planning
Product planning is the evaluation of the range, specification, and pricing of new and existing products according to the present and future market requirements and competition.
Planning of product is to satisfy the company objectives and to specify the required research, design, and development support. Product planning mean managing the product throughout its life using various marketing strategies, including product extensions or improvements, increased distribution, price changes and promotions.
Concept of Product Planning
In the planning activity, both existing and new products must be included and it follows the activity itself should deal with the proper balance between old and new products.
Product planning usually represents the activity that links the company with its market which is directly concerned with the development of the company.
Product planning can be done by top management or by line management but successful product planning can only occur within a clear framework of goals and objectives laid down by the board of directors.
Objectives of Product planning
- To meet the customer needs, It is product planning that identifies the customer needs, requirements, aspirations, likes and preferences and guides the firm’s resources and efforts towards the accomplishment
- To spot-light firm’s strengths and weaknesses, so that firm can work on the weakness and improve the product.
- To fortify better resource utilization, product planning helps to develop new product and modify existing ones in a way better utilization of resources can be achieved, it reduces the cost of the product.
- To guarantee a firm’s survival, product planning predicts what likely to changes in products, technologies, product ideas, inputs so that the latest can be given to the consumers.
Product planning needs for current deficiencies, which are stimulated as a result of some deficiency occurring in the product today and the solution achieved through the development, production, and use of new processes.
Step by step Process of Product Planning
1. Define the product concept
Define the concept is the most important step in your planning process that pivots and defines the product you are trying to build. Write this stage and ensure your idea for the product is effective and realistic. Another part of the product concept is making sure you have unshakable knowledge of the upcoming problems based on your strong understanding of the solutions needed.
2. Market research
A small company should consider doing marketing research before planning a new product. Market researchers use quantitative and qualitative research to gain a better and more complete perspective about a market potential or possibility.
Qualitative researchers target to collect an in-depth understanding of human behaviour and the reasons that govern such behaviour. The methods of qualitative research can be departed into observation and focus groups. The focus groups allowed companies to ask their consumers about their likes and dislike about a product in a small group.
Qualitative research involves thinking and analysis that are non-numerical in nature, which includes questions of “how” and “what”. Qualitative research is suited to solve the problem areas of basic market exploratory studies, product development and diagnostic studies.
Quantitative research refers to the systematic experiential investigation of social phenomena via statistical, mathematical or numerical data or computational techniques. The objective of quantitative research is to develop and employ mathematical models, theories and hypotheses concern with fact.
Quantitative research is about understanding aspects of a market or what kinds of customers making up the market. And it can be split into soft and hard parts. The soft part means phenomena like customer behaviour and the hard part is market size, brand shares, etc.
3. Plan your product testing process
If the results of the surveys prove favourable, the company may decide to launch the new product on a small scale or regional basis. During this time, the company will distribute the products in one or more cities. The company will run advertisements and sales promotions to spread awareness of the product, tracking sales results to determine the products potential success.
4. Product life cycle
Product planning must also include managing the product through several stages of its product life cycle. These stages include the introduction stage, growth stage, maturity stage and decline stage. The product life cycle can be viewed as an important source of investment choice for the company. If a company wants to make sure that it’s products are going to successful, it needs to study the product life cycle to analyze market attractiveness and supplement the conclusion before launch a new product or enters into a new market.
The first stage is Introduction which means it is time for a company or brand to launch and promote its new products. Sales are usually strong during the growth phase, while competition is low. In the introduction stage company want to attract customer’s attention as much as possible and confirm the product’s initial distribution, the company does not need to worry about the competition generally as the products are new.
In the Growth stage, the new products have been accepted in the market and their sales and profits have just begun to increase, the competition has happened so that the company will promote their quality to stay competitive. There will have second communication as the manufacturer can start to receive consumer’s feedback and then make improvements.
The third is the maturity stage where the sales and profit have grown slowly and will reach their peak. The firm will face tremendous competition in terms of creating high-quality products.
The last is the Decline stage where the product is going to end and will be discontinued. The sales of the product will reduce until it is no longer in demand as it has become saturated, customers who want to buy this product has already got that. Then the company or brand will stop making the old products and pays attention to designing and developing the new products to gain back the customer base, stay in the markets.
Elements of product planning
- Marketing and Market analysis.
- The performance of feasibility studies.
- Advanced product planning.
1.Marketing and Market analysis
2. Performance of feasibility studies
- A detailed requirement analysis.
- Identification of alternative configurations.
- Screening and evaluation of available alternatives. And,
- Selection of preferred approach.
system operational concept consists of the following information-
- Identification of the ultimate mission of the system.
- Determination of the size, weight, accuracy, capacity, rate of output, etc characteristics of the system.
- Identification of quantity of equipment, employees, facilities etc.
- Determine the time needed to complete the process or how many hours per day, operation cycle per month, etc.
- Anticipate how efficiently the production system will perform, the effectiveness of the logistics support, the time between two consecutive maintenance, maintenance downtime, failure rate, etc.
- Details of the environmental condition at which the system expected to operate. (eg: temperature, humidity, mountain or flat terrain, etc).
System maintenance concept –
- The system maintenance concepts determine how the maintenance support will be there throughout the product life cycle, repair policy, maintenance manpower required, time and cost needed, etc.
- It provides the basis to establish the requirement for total logistic support. Give an assumed design configuration of the main functional equipment, it is then necessary to consider how it should be supported. The maintenance concept is completed by logistic analysis, which leads to the identification of maintenance tasks, frequency of the tasks, skill level of the maintenance worker, facilities and data, etc.
- The level of maintenance includes- organizational maintenance, intermediate maintenance and depot maintenance.
- Organizational maintenance is performed at the operational site. Maintainance at this level limited to a periodic check of the equipment’s performance, cleaning of equipment, visual inspection, repair if needed, replace some old components with new ones, etc.
- Intermediate maintenance is performed in mobile or semi-mobile organizations at the customer’s locations. At this level item, is removed or replaced. Intermediate maintenance workers are more skilled and better than those at the organisational maintenance, and they are responsible for performing more effective and detailed maintenance.
- Depot maintenance is the highest type of maintenance and supports the accomplishment of tasks above and beyond the capabilities of the Intermediate maintenance level. Deport maintenance is a specialized system, used for maintenance of complex and bulky equipment, large spares, environmental control provision, etc.
3. Advanced Product planning
2. Product specification and plans– specification covers the technical requirements for the product and planning documentation consider all management related activity. The combination of specification and plan along with the associated cost data comprise the proposal for all subsequent research, design, production, testing, logistic support activity.
3. Product acquisition plan refers to a process of acquiring a product or system commencing with the identification of the need and extending through the delivery of the product to customers. it may involve research, design, production, and evaluation activities. Materials under the product acquisition plan must include-
- Details of tusks which covers all acquisition functions,
- Scheduling tasks using a bar chart, PERT, Gantt chart, line of balancing, etc.
- The organisation of tasks. Identified work packages classified by the standpoint of task type, the complexity of the task, and completion schedule.
- Cost, schedule, performance, effectiveness measurement and control. this may take in the form of a range of values with both upper and lower limit, or a set of maximum and minimum criteria.
- Point out the problem area and those potential areas where the problem likely to occur and take corrective action.
4. Product evaluation plan indicates requirements of the product in terms of range, accuracy, capacity, power, availability, reliability, maintainability, etc must be evaluated to ensure completion.
- Test and evaluation requirements.
- Categories of test and evaluation.
- Test preparation phase.
- Test and evaluation procedure.
- Data collection, analysis and corrective action methods.
- System network, modification and retest procedure.
- Test and evaluation reporting.
- Plan technical data to include system maintenance procedure.
- Supply a support plan to cover the acquisition of spares and repair parts.
- Transportation and handling plan to cover the packing, use of containers and shipment of material.
- The training includes system operator training, maintenance training and equipment training.
- Internal Proposal is generated within the factory and directed for approval to the management of the company to generate a scope of work.
- External proposal generated within the company and directed to an outside agency.
Advantages of product planning
- Improved the system of the organization for regular and timely delivery,
- Better supplier communication for raw materials procurement,
- Product planning reduced investment in inventory,
- Reduced production cost by increasing efficiency,
- Smooth flow of all production processes,
- Proper production planning reduced waste of resources,
- Production cost savings that improve the bottom line.