What is Product Planning?
A product plan is a description of the benefits, features, functions and performance expected of an item or system. It is usually performed before the development process to allow for comparison with the final result. The development phase can then be more accurately planned by taking into account the limitations imposed by the requirements specified in the product plan. The written plan can also act as an agreement between all parties to assure that everyone has an understanding of what is required for success. This will later be referred to as product specifications which are often relied upon during prototype testing and production stages of development.
Product planning is the process of defining and managing product features, functions, costs and schedule. The task can either be handled by a an in-house product planning expert or an external Product Planning Consultant or a Product Development Consultant the likes of which are available for hire on Fintalent, the hiring and collaboration platform for tier-1 Strategy and M&A professionals. Many businesses plan their product development with a relatively short-term view of the future. A strategy or definition which typically includes:
- Feature list with prioritized order and functionality
- Product scope
- Risk assessment;
- Resource allocation;
- Value proposition;
- Competitive analysis.
The strategic approach to product planning is also used in complex business situations such as globalization, innovation or new-market entry strategies. It involves an organization’s management plans for global expansion plans, entering new markets, technology disruption and change in customer demands. Any enterprise that delivers products or services of any kind must maintain a level of flexibility in their business processes that enables them to respond quickly to new customer requirements.
Product planning is critical to service-based organisations (including professional services) since the intangible nature of the products on offer means that making changes tends to be more expensive than in manufacturing organisations. A product planner will need to be able to define the qualities and features required by customers, while also ensuring that the product is produced economically and on time. The desirability (and cost) of specific features will often change over time, while some others might remain constant or even be made obsolete.
Every organization has their own data collection strategy for determining the needs of their customers. In this context, customer needs can be defined as what the customer requires from a product or service to perform a task or complete a project.
The Five Stages in the Cycle of Data Collection for Product Planning
- Information gathering. The information gathering stage could include information from multiple sources such as company records, manuals, and calculations based on profitability and growth. Information is gathered through a variety of ways including: interviews with internal and external users, brainstorming- where participants write down ideas without judgment from others present in the room, surveys, focus groups, observation studies and other methods which have been proven to be effective for each individual situation.
- Analysis of information. The analysis of information is the process of making sense out of the information gathered. The analysis includes evaluation, interpretation and categorization of the information. This stage is critical because it is where filters are placed on how to gather data and what will be used to determine solutions for a product or service. The outcome from this stage will inform the direction a team takes when gathering additional information during subsequent stages in the process.
- Product planning requirements. The product planning requirements stage identifies all relevant needs from the market research gathered from sources such as direct surveys, interviews with customers, competitors and suppliers, past performance records, financial reports and profit margins etc. It is during this stage that the team will determine the value proposition for the product, product plans and costs.
- Product planning analysis. The analysis is where the team will evaluate the previously collected information to determine which features are fundamental to solving customer problems. The analysis includes categorizing customer problems into objectives, critical success factors and functional requirements for an effective solution. It also includes evaluating if any of the effort put into gathering information between stages 3 and 4 was wasted or not by using an iterative process that allows for continuous feedback.
- Product design construction. Once all relevant information has been analyzed, a detailed design is created with all necessary features needed to ensure successful implementation of a solution for customers’ needs. The detailed design can be created by keeping track of all the decisions, changes made to the product design, any changes needed in future plans for project management, construction and testing etc.
Throughout product planning there are 3 steps that are critical for successful implementation of products or service based solutions –
1) Strategic Planning
2) Action Planning — The Action Plan must focus on results rather than activities which leads to successful implementation within the constraints of time and cost.
3) Implementation Planning — The Action Plan must be developed in a way that the required resources are allocated and the required architecture is developed to support the implementation of solution.
In product planning, it is essential to have a complete understanding of the needs of customers, their ultimate goals and how they expect to be satisfied in a measurable way by a product or service. It is important to understand customer needs for any solution in order to identify ways to structure a business plan in terms of value creation for customers. In product planning, it is important to have a complete understanding of the market as well as the competition within that market. It is important to have an understanding of your product or service as well as its competitors.
This is due to the fact that both companies may be seeking the same customers and therefore, the better you understand your product, the more able you are to gain a competitive advantage at a level of variety and volume of customer satisfaction. By knowing your competition, you will be able to analyze your current offerings for strengths and weaknesses thus creating better products/ services which will lead to gaining more competitive advantages over time.
In product planning, its important to have a good understanding of the team that is working on the project. In order to have a successful project, the Product Manager must ensure that they have a strong team that is capable of delivering on time and on budget. In addition, having a strong team with experienced members will help to reduce any organisational risk during the process which is key for any company looking for successful product plans.
Product plans are developed at all stages of new product development and throughout the life cycle of an organization’s existing products or services. A product plan can be developed as early as initial market research and through many iterations of research depending on what customers’ needs may change from year to year , quarter to quarter etc.
Product planning is an important part of the overall brand development strategy to help create brand strategies in each product category, including new products (such as fragrance, skin care), lines (shampoo, colour cosmetics), business units (pharmaceuticals) and specific brands. The process begins with investigating the strengths and weaknesses of company’s current products in regard to current market needs. Product planners strive to create new products that will fit into pre-set profit goals (based on past experience) and sales goals. During this stage of development, marketers must consider how much money they are willing to invest in order to achieve these goals.
In order to plan a product, one must have a thorough understanding of the market, customer needs and their challenges as well as the competition. In determining these elements, marketers study what competitors are doing as well as how they are able to meet customer needs. In doing this, marketers can determine which markets they can better penetrate and gain greater sales results for their company.
There are a few questions Fintalent’s Product Planning Consultants ask when planning a product. For example, if you are about to release a new product into the market or market your existing products in a new way, does the product plan adequately address the following?
1) Does it provide adequate information for understanding current and future sales potential of the product? — Understanding sales potential is essential for meeting goals (profit or volume) and for deciding which markets or customers to target.
2) Does it identify ways to meet customers’ needs? — The product plan should be able to help you understand the customers’ expectations in order to determine if their needs are being met.
3) Does it provide data for evaluating the performance of the product in the marketplace? — Evaluating performance in the marketplace will let you know if any changes need to be made in your strategy for this particular product. Product changes such as adding new products to your line, changing your advertising strategies and/or improving the quality of the actual product itself can be implemented when you know that the current ones are not working.
4) Does it provide enough data for tracking and measuring performance? — This will enable you to measure changes and determine whether or not they were effective in meeting customer needs and in achieving sales goals.
Product planning is an ongoing activity for an organization. The business environment is constantly changing, which requires organizations to review their products or services on a regular basis. Prioritization is one of the most important steps that must be taken with any Product Plan. It must be done in a way that ensures these 3 elements are met: – Customers’ Needs, – Current Sales Results, and – Current Products’ Functional Capabilities. A product planning expert is an essential part of a company’s Product Development and implementation programme. Fintalent presents an opportunity for forms to hire expert Product Planning Consultants to implement all of their Product Development and implementation goals.