PRODUCT PLANNING AND DEVELOPMENT PROCESS

Once idea emerges from idea sources or creative problem solving, they need
further development and
refinement in to final product or service to be offered. This refining process- the
product planning and
development process is divided in to five major stages. Idea stage, concept stage,
product development
stage, test marketing stage and commercializing; it result in the product life cycle.
Establishing evaluation criteria
At each stage of product planning and development process, criteria for evaluation
need to be established.
These criteria should be broad, yet quantitative enough to screen the product
carefully in the particular
stage of development. Criteria should be developed to evaluate the new product in
terms of market
opportunity, competition the marketing system, financial factors and production
factors. A market
opportunity and adequate market demand must exist. Current competing
producers, prices, and policies
should be evaluated in their impact on market share.
The new product should be compatible with existing management capabilities. The
product should be able
to be supported by and contribute to the companys financial structure. The
compatibility of new products
production requirements with existing plant, machinery, and personnel should be
determined.
Entrepreneurs should formally evaluate an idea throughout its evolution.
Idea Stage
Promising new product ideas should be identified and impractical ones eliminated
in the idea stage allowing
maximum use of companys resources. In the systematic market evaluation
checklist method, each new
product idea is expressed in terms of its chief values, merits, and benefits. This
technique can be used to
determine which new products should be pursued.
The company should also determine the need for the new product and its value to
the company. Need
determination should focus on the type of need, its timing, the users involved, the
importance of marketing
variables, and the overall market structure and characteristics. In determining the
products value to the
firm, financial scheduling should be evaluated.
Concept Stage
In the concept stage the refined idea is tested to determine consumer acceptance
without manufacturing it.
One method of testing is the conversational interview in which respondents are
exposed to statements that
reflect attributes of the product. Features, price, and promotion should be
evaluated in comparison to

major competitors to indicate deficiencies or benefits. The relative advantages of

the new product versus
competitors should be determined.
Product Development Stage
In this stage, consumer reaction is determined, often through a consumer panel.
The panel can be given
samples of the product and competitors products to determine consumer
preference. Participants keep
the record of their use of product and comment on its virtues and deficiencies.
The panel of consumers is also given a sample of product and one or more
competitive product
simultaneously. One test product may already be on the market, whereas the other
test product is new.
Test Marketing Stage
Although the results of product development stage provide the basis of the final
marketing plan, the
market test can be done to increase the certainty of successful commercialization.
The last step in the
evaluation process, the test marketing stage, provides actual sales results which
indicate the acceptance level