Product Planning Chapter 2

Common Traits of Successful Product Planning Companies Clearly defined goals Seek future customer needs Build organizations dedicated to accomplishing focused goals Partner with customers in the development process

Definitions Mission – company’s central purpose, direction and scope Objectives – derive from mission, represent specific elements to be achieved by the company Goals – time-specific metrics to measure successful attainment of an objective Strategies – the way in which objectives are to be realized Programs – tactical methods to execute specific strategies

New Product Strategy Four general strategies for product planning Differentiated by time (have customers or technology today or in the future) Penetration – increase share Development – diversity Market extensions – growth outside current scope Diversification – new and unrelated businesses Market Penetration Product Development (product improvements, (line extensions) cost reductions) Market Extensions Diversification (new uses, new markets) (new-to-the-company, new-to-the-world) Current New

Product Development Process Derived from strategy versus idea- generated Market-pull versus technology-push Stage-gate or phase-review – formal evaluation hurdles along the way to screen poor concepts from further development

Product Development Process Typically, multiple phases to the process –Phase 1 – opportunity identification, including formalizing the process and gates –Phase 2 – concept generation, including a pool of candidate concepts –Phase 3 – pre-technical evaluation, including business case of concept –Phase 4 – technical development, including financial and marketing evaluation –Phase 5 – launch to the market –Phase 6 – life cycle management

Evaluating the Product Development Process One way is risk assessment –Look at risk, cost, time associated with each product development stage of a concept –Decay curve – effect of narrowing the funnel at each stage of the development process –Good example pages 34-35