Product planning is the process of creating a product concept and taking it through till the product is launched in the market, and thereafter concentrating on promotion and sustenance strategies.
A number of start-ups/ SMEs invariably stumble in their product planning stage. A finished product is the result of long laborious hours of brainstorming, research, analysis and planning, and if not given the due time and thought-process, can result in a complete failure of the business venture.
We take a look at the product planning process from a small business perspective:
(1) Generating an Idea – Usually, the idea for a new product comes from:
- Perfect strangers looking for solutions to solve their problems or meet their demands.
- Competitors, when they launch new products and you are sure you can bring a line that addresses your competitor’s gap/loophole.
- Your own existing business in the need to vertically/horizontally integrate your existing product lines. For example, a business that sells handicrafts and home accessories can start their own line of home furnishings like cushion covers, rugs and curtains.
- In the service sector, a social-media agency that specializes in media strategies may put in place a new team to develop creatives/banners too.
(2) Evolution of the Idea – Once you have identified the product that you want to go to the market with, get into an interactive brainstorming mode with your existing employees (in case already in business) or with friends, mentors or associates in case you are about to take the entrepreneurial plunge.
The brain-storming sessions will help to determine which products are more feasible from a horde of ideas, short-list the feasible products and finally zero-in on the most preferred product.
Market Research It is a very important step in the product planning process.
- Study your competition – if possible undertake a SWOT (Strengths, Weakness, Opportunities and Threats) analysis to compare your strengths and weaknesses against your competitor and find out the niches where your product can have an advantage your competitors.
- As a start-up/SME, concentrate on small-scale but real-time surveys through focus groups: o If you are planning to start a business, assess the market demand by a survey.
- If already in business, assign a select employee(s) to ask a few clients if they would like the product as it is presented and whether or not they would purchase it.
- You may also assign an employee the task to conduct a quick survey by phone, mail or the Internet. Use these inputs to make changes to your product concepts with respect to features, style and price points.
Product Introduction Once the above basic requirements are met, start with a small lot of sample-products for a small and specific group of customers (according to demographics like age, sex, and income) in order to gauge their reaction and evaluate sales in specific target groups.
This type of testing will help you avoid losses if the product fails to pick up. Only when you get a favorable response on the beta version of your product, you may decide whether you want to take the product for a complete market launch.
Product Life Cycle Product planning doesn’t stop with the product launch. It must also include managing the product through various stages of its product life-cycle. Initially, during the growth phase, sales are usually strong while competition is low. However, with time, competitors will come up with their own products.
These competitive products will eat into the market share of your product and the sales will fall. This is the time when you will have to formulate sustenance strategies like lowering your product price, throwing in freebies or developing new or additional features for your product.