Product Planning

What is Product ?
• A product is anything that can be offered to a market that might that
might satisfy a want or need.
• It's more than physical products (include services, places, persons,
and ideas).
• To create successful new products, the company must :
 understand it's customers, markets and competitors.
 develop products that deliver superior value to customers.
• Product planning involves making decisions about production and sale
of a businesses products.
Why Product Fail ?
• Doesn't match current company objectives
• Make room for other products
• Overestimating market size
• Poor marketing research
• Obsolete
• Lost its appeal
• No longer profitable
• Conflicts with other products in the same product line
• Design problems
• Excessive development costs
• Incorrectly positioned, priced, or advertised
• Competitive reaction
 NEW PRODUCT DEVELOPMENT
STRATEGY

Quality Brand
Growth Productivity
Improvement Maintenance

• Conformance
Reduce Cost : • Special
• New Products • Formulas situations
Quality of Design
• New Packages • Packages • Regulatory
• Manufacturing • Environmental
• Specifications
New Product Development Process
1. Idea Generation and Screening
2. Concept Development and Testing'
3. Marketing Strategy
4. Business Analysis
5. Product Development
6. Test Marketing
7. Commercialization
Ideas Generation and Screening
Ideas Generation Ideas Screening
1. Internal Sources • this process involves shifting
• company employees at all levels through the ideas generated
2. External Sources above and selecting ones which
are feasible and workable to
• customers develop.
• competitors • pursing non feasible ideas can
• distributors clearly be costly for the
• suppliers company.
• outsourcing
Concept Development and Testing
• Done by marketing and/or advertising agency
• Conducting “focus on group”
Objectives :
• judge whether the concept fits the opportunity area, and contraints
• refine and/or describe the product concept :
 what it is ?
 what benefit(s) will it deliver to the user ?
 key information about size, varieties, package and price
Market Strategy
Qualitative Quantitative
• depth interviews 1. Pre-Prototype
• focus groups • surveys
• conceptual tests
• expert judgment
• perceptual maps
• conjoint analysis
2. Post-Prototype
• product use test
• lab test market
• test market
Business Analysis
Evaluate the marketing plan will special emphasis on sales, cost, profit
estimates. Must pass the business test criteria for further development.
Product Development
1. Initial stages with broad design parameters
• produce early prototypes
• show and obtain feedback from end users
• refine design
2. Fine tune & finalise design
• vary formulations on key ingredients
• conduct product testing amongst end users
• experimental designs offer most powerful learning
• optimise final design and packaging
Test Marketing
1. Simulated Test Market
 similar to concept test but with product
 provide samples to consumers who are
 interested in the concept
 measure both trial potential and reaction to product
 reaction to product is used to forecast repeat rate
 volume is forecasted on basis of both the trial forecast and the repeat forecast
2. Live Test Market
 to measure actual sales volume
 controlled : behavior scan
 conventional : normal channels
 track sales rate, trial, and repeat
 compare to goals and identify gaps
 investigate and close gaps
Commercialization
1. National expansion of product
 develop market rollout plan
2. Can involve significant capital investment
 brick & mortar : equipment
3. Can involve distribution costs
 slotting fees : sales incentives
4. Build product into a platform
 maintain growth and sustain competitive advantage