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What Is Product Planning?

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  • Written By: Mary McMahon
  • Edited By: Kristen Osborne
  • Last Modified Date: 29 August 2014
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Product planning is a process used to identify and develop new products. The purpose of planning is to make choices about which product ideas a company should invest in. Companies can approach product planning from a number of different perspectives. Having a system in place before planning begins is important as it helps to avoid wasted time and creates a framework for decision making. Consultants who specialize in marketing and corporate decision making can be involved in the development of a product planning system for a company, which will accommodate the company's approach to business while helping it avoid expensive dead ends.

At any given time, a company should have numerous ideas for new products and services circulating. These ideas come from customers, distributors, people within the company, and research conducted by the company. This research can include surveys, research on competitors, and study of the market to identify emerging needs. A company must be able to act quickly on time-sensitive product ideas while also stopping bad ideas in their tracks.

People responsible for product planning can come from diverse departments within a company. This is designed to ensure that many different perspectives are incorporated from the start. A group can describe a proposed product, explain why it would be valuable to start selling, and demonstrate what kinds of costs would be associated with development and production. Reports from individual product planning groups can be evaluated to single out candidates for further development.

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This process can become extremely complicated. There may be cases in which executives push through their own pet products, for example, ignoring the problems with their proposals or the recommendations of people involved in product planning. Companies can also be too slow with their development, resulting is missing out on a potential new market. They can also act too fast and end up with an unsellable product. For companies involved in the manufacturing of products associated with rapidly evolving trends, being able to act quickly and efficiently is critical.

One important aspect of product planning involves recognizing that it may be necessary to abandon or temporarily halt development of a new product. Having checklists in place for various steps of the planning process allows companies to constantly review products in development. If a product appears to be falling short, the project can be stopped before the company loses any more money. Companies determined to bring every single product proposal all the way through development and onto the market can wind up with costly failures.

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jewdore
Post 4

With Clinique we would often provide free samples of the product along with substantial television and print media advertising.

With this testing phase a market research company may ask respondents what they like or disliked about the product.

If the sales are strong in that initial market then the product gets launched.

sunshine31
Post 3

Comfyshoes -I have been involved in new product launches they are quite exciting. I know that in my experience a product launch also included significant promotions across the country.

With Clinique we would often provide free samples of the product along with substantial television and print media advertising.

I know that many grocery items are sampled at the supermarket and the customers are offered coupons as an incentive to try the product.

Since the coupons offer an expiration date, the companies can measure the success of the promotion. Future sales beyond the promotion help the company know how well the product is being received in the product market.

comfyshoes
Post 2

Cafe41 -I wanted to say that a great deal of strategic product planning takes place.

Not only are there customer surveys, but companies do an analysis of their competitors to see how their potential new product fits in to their current product assortment and their competitors as well.

After this phase a complete product gets tested again with a targeted focus group to try out the product and provide feedback.

If the feedback is good then the product launch planning stage begins. Usually the product will be launched in a single city in order to determine if the product is ready for a full national release.

If the sales are strong in that initial market then the product gets launched nationwide.

cafe41
Post 1

A new product development plan begins with developing various ideas. These ideas then get filtered down and a testing phase begins.

With this testing phase a market research company may ask respondents what they like or disliked about the product.

I was involved in a study like this and the company asked if I would buy the product and if I could find it in the store, where would I find the item.

They also asked how much of the product I would buy and they also wanted to know if I felt that the pricing made the item a good value. At this phase the product is still an idea and has not been fully developed yet.

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