Definition of product planning
The planning of a product is the process of creating an idea for a product and follow it until it is introduced in the market. In addition, a small company may have a strategy for the output of this product in case it is not successful. Product planning involves managing it throughout its life cycle, through different marketing strategies, including extensions or product improvement, greater distribution, changes in price and promotions.
Development of the concept of a product
The first phase of product planning is to develop your concept. Marketing managers typically create ideas for new products by identifying certain problems that consumers must solve, or different customer needs. For example, a small computer retailer may see the need to create a repair division for the products it sells. After the idea of the product is conceived, the managers begin to plan the dimensions and characteristics of the product. Some small companies even develop a model or model.
The next step in the process of product planning is to study the competition. Most small businesses order secondary research information from vendors such as the NPD group and Forrester Research. Secondary research typically provides details about key competitors and their market share, which is the total percentage of sales they have over the total market. Some companies can also do a SWOT analysis (strengths, opportunities, weaknesses and threats), according to NetMBA.com which helps them compare their strengths and weaknesses against those of the competition. Companies can determine places in which they have advantages over competitors to identify areas of opportunity. For example,
A small company should consider doing market research, both qualitative and quantitative, for its new product. Focus groups are an example of qualitative information. In the study of these groups, companies question their consumers about what they like and what they do not like about a product, in small groups of people. A focus group can make the company adjust the concept of the product before testing it through telephone surveys, which is a more quantitative research. Telephone surveys allow the company to test the concept of its product on a larger scale, so that the results are more predictable on the general population.
If the results of the surveys are favorable, the company may decide to sell the new product on a small scale or regionally. During this period, the company distributes the product in one or more cities. The product is advertised and special sales promotions are made, tracking the sales results to determine the potential success of the launch. If the sales figures are favorable, the distribution can be expanded. Eventually, the company can sell the product on a national scale.
Life cycle of a product
The planning of a product also includes managing it during several stages of its life cycle. These stages include its introduction, growth, maturity and decline, according to QuickMBA.com. Sales are normally strong during the growth phase, while competition is low. However, the continued success of a product will attract the interest of competitors, who will develop their own products. The introduction of competition can force a small company to lower its prices. The strategy of low prices can prevent losing market share. The company can also decide to differentiate its product better, and keep the price constant. For example, a small cell phone manufacturer can develop new and useful features of your product,