Product planning

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Product Planning, or product discovery, is the ongoing process of identifying and articulating market requirements that define a product's feature set. [1] It serves as the basis for decision-making about price, distribution and promotion. Product planning is also the means by which companies and businesses can respond to long-term challenges within the business environment, [2] often achieved by managing the product throughout its life cycle using various marketing strategies, including product extensions or improvements, increased distribution, price changes and promotions. It involves understanding the needs and wants of core customer groups so products can target key customer desires [3] and allows a firm to predict how a product will be received within a market upon launch.

Contents

The product planning process

Double Diamond Product Discovery Double Diamond Product Discovery.png
Double Diamond Product Discovery

Developing the product concept

In the product concept phase, managers generate ideas for new products by identifying certain problems that consumers face or various customers needs. [4] For example, a small computer retailer may see the need to create a computer repair division for the products it sells. After idea conception, managers may plan the dimensions and features of the product and develop a trial product.

Studying the market

The next step is engaging in a competitor analysis. Secondary research usually provides details on key competitors and their market share, which is the percent of total sales that they hold in the marketplace. [5] The business can then determine places in which it has an advantage over the competition to identify areas of opportunity.

Market research

Market research is one stage of product planning and is regarded as the way to accomplish the activity though designing questions, preparing the samples, collecting data and analysing them. It provides significant insight into customers wants, needs, buying habits and behaviours and is a key tool used in the product planning process. [6] For example, customer satisfaction information can be obtained through surveys and market research. The process consists of 4 components: definition, collection, analysis and interpretation. [7]

Qualitative and Quantitative Research

Both qualitative and quantitative marketing research techniques can be used within marketing research. [7] The aim of qualitative research is to gather an in-depth understanding of human behavior and the reasons that govern such behaviour. [7] The qualitative method investigates the why and how of decision making, not just what, where, when. [8] Hence, smaller but focused samples are more often used than large samples. Quantitative research refers to the systematic empirical investigation of social phenomena via statistical, mathematical or numerical data or computational techniques. [9] The objective of quantitative research is to develop and employ mathematical models, theories and/or hypotheses pertaining to phenomena.

Market researchers use quantitative and qualitative research to gain better and more complete perspectives about a market segment or hypothesis. [10] Qualitative research involves consideration 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. [7] In market exploratory studies, the research findings can be used to define consumer segmentations in relation to a product brand or understand the dimensions which differentiate between brands. In new product development, product, packaging, positioning and advertising information can be collected through researching to confirm a new product proposition. In diagnostic studies, qualitative research is used to determine how the brand image has changed since the start of an advertising campaign.

Research Methods

The methods of qualitative research can be departed into observation and focus groups. Recently, observation is used in observation-based researches, in which people may not articulate correctly and clearly of their thoughts. A particular example is the application in in-store shopping surveys, which regularly allow customers to try the products and gather feedback. Focus group is a tool on the basis of psychotherapy where it has found that if people are divided into small groups and asked to share their opinions suggestions, and open up. [7] Because there will generate a brainstorming effect in the groups so that a comment from one person can stimulate another one's ideas. In general, there are always need four groups to cover a single respondent type. The outcomes of group discussions rely on the group leaders’ abilities of structuring the discussion, conducting the meeting and analysing and understanding the results.

Quantitative research is about understanding aspects of a market or what kinds of customers make up the market. [11] It can be split into soft and hard parts. Soft parts refer to phenomena like customer attitudes and hard part is market size, brand shares and so on. Quantitative researchers are different from qualitative researchers, they pay more attention to asking 'What' questions. [12] Quantitative research often provides three aims: description, forecasting and decision-making. [13] Quantitative market research means getting relevant information or measures from each single customer or shopper who are carrying out a census in the market. It is based on the strict sampling methods so that its data or results have levels of accuracy and can be taken to represent and stand for the population or to projecting.

If the survey results prove favorable, the company may decide to sell 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 for the product, tracking sales results to determine the products potential success.

Product life cycle

Four stages of the product life cycle Product Life Cycle Management.png
Four stages of the product life cycle

Product planning must also include managing the product through various stages of its product life cycle. These stages include the introduction, growth, maturity and decline stages. [14] Sales are usually strong during the growth phase, while competition is low. However, continued success of the product will pique the interest of competitors, which will develop products of their own. The introduction of these competitive products may force a small company to lower its price. This low pricing strategy may help prevent the small company from losing market share. The company may also decide to better differentiate its product to keep its prices steady. For example, a small cell phone company may develop new, useful features on its cell phones that competitors do not have. Product life cycle can be viewed as an important source of investment decision for the company.

If a company or brand wants to make sure that its products are successful, it needs to study the product life cycle to analyze market attractiveness and supplement the conclusion before it launches a new product or enters a new market. [15] Product life cycle plays an important role in marketing. The first reason is that the managers will follow the four stages to make product plans for pushing out new products. Secondly, the level and growth of sales will change a lot during the four stages so the managers need to adjust the product plan appropriately and timely. The last one is that the prices and costs will decrease markedly in the early stages of the product life cycle. [16]

Introduction

The first stage is the introduction (or market development), when a product is first brought to market. [17] The goal in this stage is to attract customers’ attention as much as possible and confirm the products’ initial distribution. In this stage will be the first communication between marketers and customers relating to this product and will be the first time the consumer is aware of the product. In addition, the cost of the things will be high like research, testing and development and the sales are low as the customer base is small. [17]

Growth

The second stage is growth. In this stage, the new products have been accepted in the market and their sales and profits has begun to increase, the competition has happened so that the company will promote their quality to stay competitive. The products also have basic consumers’ attention and can develop their loyal customers. There will have second communication as marketers can start to receive customers’ feedback and then make improvements.

Maturity

The third stage is maturity where the sales and profit have grown slowly and will reach their peak. The firm will face fierce competition in terms of providing high quality products.

Decline

The last stage is decline which means the product is going to end and be discontinued. The sales of product will decrease until it is no longer in demand as it has become saturated, all the customers who want to buy this product has already got that. Then the company or brand will cut down the old products and pays attention to designing and developing the new products to gain back the customer base, stay in the markets and make profits.

Related Research Articles

Marketing Study and process of exploring, creating, and delivering value to customers

Marketing is the process of exploring, creating, and delivering value to meet the needs of a target market in terms of goods and services; potentially including selection of a target audience; selection of certain attributes or themes to emphasize in advertising; operation of advertising campaigns; attendance at trade shows and public events; design of products and packaging attractive to buyers; defining the terms of sale, such as price, discounts, warranty, and return policy; product placement in media or with people believed to influence the buying habits of others; agreements with retailers, wholesale distributors, or resellers; and attempts to create awareness of, loyalty to, and positive feelings about a brand. Marketing is typically done by the seller, typically a retailer or manufacturer. Sometimes tasks are contracted to a dedicated marketing firm or advertising agency. More rarely, a trade association or government agency advertises on behalf of an entire industry or locality, often a specific type of food, food from a specific area, or a city or region as a tourism destination.

Marketing research is the systematic gathering, recording, and analysis of qualitative and quantitative data about issues relating to marketing products and services. The goal is to identify and assess how changing elements of the marketing mix impacts customer behavior.

Brand equity, in marketing, is the worth of a brand in and of itself — i.e., the social value of a well-known brand name. The owner of a well-known brand name can generate more revenue simply from brand recognition, as consumers perceive the products of well-known brands as better than those of lesser-known brands.

Product life-cycle management (PLM) is the succession of strategies by business management as a product goes through its life-cycle. The conditions in which a product is sold changes over time and must be managed as it moves through its succession of stages.

Market research is an organized effort to gather information about target markets and customers: know about them, starting with who they are. It is an important component of business strategy and a major factor in maintaining competitiveness. Market research helps to identify and analyze the needs of the market, the market size and the competition. Its techniques encompass both qualitative techniques such as focus groups, in-depth interviews, and ethnography, as well as quantitative techniques such as customer surveys, and analysis of secondary data.

Marketing management is the organizational discipline which focuses on the practical application of marketing orientation, techniques and methods inside enterprises and organizations and on the management of a firm's marketing resources and activities.

Qualitative marketing research involves a natural or observational examination of the philosophies that govern consumer behavior. The direction and framework of the research is often revised as new information is gained, allowing the researcher to evaluate issues and subjects in an in-depth manner. The quality of the research produced is heavily dependent on the skills of the researcher and is influenced by researcher bias.

Marketing strategy is a process that can allow an organization to concentrate its limited resources on the greatest opportunities to increase sales and achieve a sustainable competitive advantage.

Market penetration refers to the successful selling of a product or service in a specific market. It is measured by the amount of sales volume of an existing good or service compared to the total target market for that product or service. Market penetration is the key for a business growth strategy stemming from the Ansoff Matrix (Richardson, M., & Evans, C.. H. Igor Ansoff first devised and published the Ansoff Matrix in the Harvard Business Review in 1957, within an article titled "Strategies for Diversification". The grid/matrix is utilized across businesses to help evaluate and determine the next stages the company must take in order to grow and the risks associated with the chosen strategy. With numerous options available, this matrix helps narrow down the best fit for an organization.

Consumer behaviour Study of individuals, groups, or organizations and all the activities associated with consuming

Consumer behavior is the study of individuals, groups, or organizations and all the activities associated with the purchase, use and disposal of goods and services. Consumer behaviour consists of how the consumer's emotions, attitudes and preferences affect buying behaviour. Consumer behaviour emerged in the 1940–1950s as a distinct sub-discipline of marketing, but has become an interdisciplinary social science that blends elements from psychology, sociology, social anthropology, anthropology, ethnography, marketing and economics.

Advertising campaign Series of advertisements centered around a particular theme or character

An advertising campaign is a series of advertisement messages that share a single idea and theme which make up an integrated marketing communication (IMC). An IMC is a platform in which a group of people can group their ideas, beliefs, and concepts into one large media base. Advertising campaigns utilize diverse media channels over a particular time frame and target identified audiences.

Product innovation is the creation and subsequent introduction of a good or service that is either new, or an improved version of previous goods or services. This is broader than the normally accepted definition of innovation that includes the invention of new products which, in this context, are still considered innovative.

Business marketing is a marketing practice of individuals or organizations. It allows them to sell products or services to other companies or organizations that resell them, use them in their products or services or use them to support their works. It is a way to promote business and improve profit too.

A target audience is the intended audience or readership of a publication, advertisement, or other message catered specifically to said intended audience. In marketing and advertising, it is a particular group of consumers within the predetermined target market, identified as the targets or recipients for a particular advertisement or message. Businesses that have a wide target market will focus on a specific target audience for certain messages to send, such as The Body Shops Mother's Day advertisements, which were aimed at the children and spouses of women, rather than the whole market which would have included the women themselves.

Advertising research is a systematic process of marketing research conducted to improve the efficiency of advertising. Advertising research is a detailed study conducted to know how customers respond to a particular ad or advertising campaign.

The following outline is provided as an overview of and topical guide to marketing:

A value proposition is a promise of value to be delivered, communicated, and acknowledged. It is also a belief from the customer about how value (benefit) will be delivered, experienced and acquired.

A target market is a group of customers within a business's serviceable available market at which a business aims its marketing efforts and resources. A target market is a subset of the total market for a product or service.

Product strategy The plan for how a company will create, develop, and market its products.

Product strategy defines the high-level plan for developing and marketing a product, how the product supports the business strategy and goals, and is brought to life through product roadmaps. A product strategy describes a vision of the future with this product, the ideal customer profile and market to serve, go-to-market and positioning (marketing), thematic areas of investment, and measures of success. A product strategy sets the direction for new product development. Companies utilize the product strategy in strategic planning and marketing to set the direction of the company's activities. The product strategy is composed of a variety of sequential process in order for the vision to be effectively achieved. The strategy must be clear in terms of the target customer and market of the product in order to plan the roadmap needed to achieve strategic goals.

Customer foresight is a new field of applied research. It aims to understand future consumer preferences and wishes with regard to tomorrow's products and services. It does so by combining customer research and foresight research elements. Customer foresight can be conceived as an interaction with projected future markets through selected customers by understanding their wishes and attitudes, ideas and visions as well as their perception of signals and drivers of change. Even though the concept cannot predict the future, it enables companies to prepare for different future scenarios and thus improves strategy and decision-making processes.

References

  1. ↑ Kahn, Kenneth (2014-12-18). "Product Planning Essentials". doi:10.4324/9781315701516.{{cite journal}}: Cite journal requires |journal= (help)
  2. ↑ Feldman, L; Page, A (1984). "Principles vs. practice in new product planning". Journal of Product Innovation Management. 1 (1): 43–55. doi:10.1016/s0737-6782(84)80042-9. ISSN   0737-6782.
  3. ↑ Mazumdar, Tridib (1993-01-01). "A value based orientation to new product planning". Journal of Consumer Marketing. 10 (1): 28–41. doi:10.1108/07363769310026557. ISSN   0736-3761.
  4. ↑ Pessemier, Edgar A.; Root, H. Paul (1973-01-01). "The Dimensions of New Product Planning". Journal of Marketing. 37 (1): 10–18. doi:10.1177/002224297303700103. ISSN   0022-2429.
  5. ↑ Hayes, Adam. "Everything You Need to Know About Market Share". Investopedia. Retrieved 2021-04-10.
  6. ↑ "Market research | Small Business". www.smallbusiness.wa.gov.au. Retrieved 2021-04-10.
  7. 1 2 3 4 5 Zikmund, W., D’Alessandro, S., Winzar, H., Lowe, B., & Babin, B. (2017). Marketing research : Asia-Pacific edition (4th edition.). Cengage Learning.
  8. ↑ Day, Ellen; Gordon, Wendy; Langmaid, Roy (1990). "Qualitative Market Research: A Practitioner's and Buyer's Guide". Journal of Marketing Research. 27 (1): 117. doi:10.2307/3172560. ISSN   0022-2437.
  9. ↑   Brunsdon, C. (2016). Quantitative methods I: Reproducible research and quantitative geography. Progress in Human Geography, 40(5), 687–696. https://doi.org/10.1177/0309132515599625
  10. ↑   Market Research: A Guide to Planning, Methodology and Evaluation. (1997). Management Research News, 20(5), 54–.
  11. ↑   Vogt, W. (2011). SAGE quantitative research methods. SAGE.
  12. ↑ Allen, M., Titsworth, S., & Hunt, S. (2009). Quantitative research in communication. SAGE.
  13. ↑ Franses, P., & Paap, R. (2001). Quantitative models in marketing research. Cambridge University Press.
  14. ↑ Kopp, Carol M. "Understanding Product Life Cycles". Investopedia. Retrieved 2021-04-10.
  15. ↑ Lambin, Jean-Jacques; Schuiling, Isabelle (2012). Market-Driven Management. doi:10.1007/978-0-230-36312-0. ISBN   978-0-230-27602-4.
  16. ↑ Marketing Science, 2004
  17. 1 2 "Exploit the Product Life Cycle". Harvard Business Review. 1965-11-01. ISSN   0017-8012 . Retrieved 2021-04-10.
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