Chapter 03 Product Planning

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Chapter 3

Product Planning



Product Planning

Takes place beforeproduct development project is formally approved

substantial resources are applied, and

the larger development team is formed

It is an activity that considers the portfolio of projects that an organization might pursue and

determines what subset of these projects will bepursued over what time period.



Product Planning

What product development projects will beundertaken?

What mix of fundamentally new products,platforms, and derivative products should bepursed?

How do the various projects relate to each

other as a portfolio?

What will be the timing and sequence of theprojects?



Mission Statement What market segments should be considered

in designing the product and developing itsfeatures?

What new technologies should beincorporated into the new product?

What are the manufacturing and servicegoals and constraints?

What are the financial targets for the project?

What are the budget and time frame for theproject?



The Product Plan



The Product PlanningProcess

Product PlanningWhat? (Product portfolio)

When? (Timing of their market introduction)

Product Planning is a dynamic activitythat should reflect

changes in the competitive environmentchanges in technology

information on the success of existingproducts



Four Types of ProductDevelopment Projects

1. New product platforms

2. Derivative of existing product

platform

3. Incremental improvements toexisting product

4. Fundamentally new products



The Process

A five-step process to develop a productplan and project mission statements.

1. Identify opportunities

2. Evaluate and prioritize projects3. Allocate resources and plan timing

4. Complete pre-project planning

5. Reflect on the results and the process



Step1: IdentifyOpportunities

Ideas for new products/features maycome from several sources, including:

Marketing and sales personnel

R & D organizations

Current product development teams

Manufacturing and operations organizations

Current and potential customers

Third parties such as suppliers, inventors,and business partners



to IdentifyOpportunities

Document complaints that current customers experiencewith existing products.

Consider implications to trends in lifestyles, demographics,and technology for existing product categories and foropportunities for new product categories.

Systematically gather suggestions of current customers,perhaps through the sales force or customer servicesystem.

Track the status of emerging technologies



Step 2: Evaluate andPrioritize Projects

Four basic perspectives are usefulin selecting the most promising

projects to pursue:competitive strategy

market segmentation

technological trajectories

product platforms



Competitive Strategy

Defines a basic approach tomarkets and products with respect

to competitors such as: Technology leadership

Cost leadership

Customer focusImitative



Technology leadership

The firm places great emphasis on R&D

R&D

R&D

R&D



Cost leadership

The firm competes on productionefficiency, either through economies of scale, use of superior manufacturingmethods, low-cost labor, or bettermanagement of the productionsystem.

Methods employed: Lean Mfg., DFM,etc.



Imitative

Closely follow trends in the market, allowingcompetitors to explore which new productsare successful for each segment

When viable opportunities have beenidentified, the firm quickly launches newproducts to imitate the successfulcompetitors

A fast development process is essential toeffectively implement this strategy



Market Segmentation

Customers can be usefully thought of as belonging to distinct market

segments Dividing a markets allows the firm to

consider the actions of competitorsand the strength of the firm’s existing

products with respect to each well-defined group of customers



Product Segment Map



TechnologicalTrajectories

In technology-intensive businesses, akey product planning decision is whento adopt a new basic technology in aproduct line

For example, shift to digital imageprocessing and printing from light-lens

technology Technology S-curves are conceptual

tools to help think about such decisions




The technology S-curve displays the performanceof the products in a product category over time,usually with respect to a single performancevariable such as resolution, speed, or reliability

The S-curve illustrates that: Technologies evolve from initial emergence when

performance is relatively low, through rapid growth inperformance, and finally approach maturity wheresome natural technological limit is reached and the

technology may become obsolete




While S-curve characterizetechnological change remarkably well

in a wide variety of industries, it isoften difficult to predict the futuretrajectory of the performance curve(how near or far is the ultimate

performance limit)

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Chapter 03 Product Planning