Product Planning

1
Product Planning

• Chapter 30

2
Objectives

• Nature and scope of product planning
• The Concept of Product Mix
• Product Mix Strategies
• Steps in Product Development

3
Product Planning

• Involves making decisions about those features
  that are needed to sell businesss product,
  services and ideas.

4
Product Mix

• All different products that a company makes or
  sells
• Type and number of products must be based on
• Objectives of the business
• The image the business wants to project
• The market the business is trying to reach

5
Product Items and Lines

• Line group of closely related products
  manufactured and/or sold by a business
• Item a specific model, brand or size of a
  product within a product line.

6
Product Width and Depth

• Width the number of different product lines a
  business manufactures or sells
• Gillette razors, blades, toiletries, writing
  instruments, lighters
• Depth number of product items offered within
  each product line
• Toiletries shaving cream, gel, moisturizing

7
Product Strategies

• A plan for how the business determines which
  products it will make or stock.

8
Developing New Products

• Generating Ideas
• Screening Ideas
• Developing the product
• Testing the product
• Introducing the product
• Evaluating customer acceptance

9
Generating Ideas

• Creativity is essential!!
• New ideas come from
• Customers
• Competitors
• Channel members
• Company employees

10
Screening Ideas

• Ideas for products are evaluated
• Matched against companys overall objectives
• Look at potential for conflict with existing
  products
• Determine if products deserve further study

11
Developing a Business Proposal

• Evaluate in terms of profit potential, as well
  as
• Size of market
• Potential sales
• Costs
• Technological trends
• Overall competitive environment
• Level of risk

12
Developing a Product

• A prototype is made, tested and adjustments are
  made to the final product

13
Testing the Product

• Newly developed products are test marketed to
  obtain customers responses

14
Introducing the Product

• If a favorable customer response is received, the
  product is introduced into the marketplace.
• Frequently tested in certain geographic areas
• Other products are tested via focus groups
• Introductions start out small!

15
Evaluating Customer Acceptance

• After introduction, marketers track new product
  performance.
• Studying sales numbers
• Scanning equipment and computer systems

16
Evaluating Customer Acceptance

• Reports answer questions such as
• Who are the best customers for our new product?
• What new products are customers buying?
• How often do customers buy the new product?
• When did customers last buy the new product?

17
Developing Existing Products

• Companies constantly review their product mix
• They do this in order to
• Build on existing image
• Appeal to new markets, and increase
• Increase sales and profits

18
Deleting a Product or Product Line

• Obsolescence
• Loss of Appeal
• Conflicting objectives
• Product replacement
• Lack of profit
• Conflicting product lines