What is Product Planning Anyway?
Like many of the management terms used in the lingo of new product development, the definition of product planning varies widely depending on whom you ask. That’s no surprise because product planning encompasses both strategy and tactics, and it involves multi-function disciplines including technical, marketing, operations and finance. Therefore, depending on your functional discipline and perspective, your definition may or may not be the same as others in your organization.
Let’s start with a definition from PDMA’s glossary. Product planning is the:
“Detailed summary of all the key elements involved in a new product development effort such as product description, schedule, resources, financial estimations and interface management plan.”
A good definition to start with; however, it is narrowly focused on the product development phase which of course is essential and where most of the real time is spent in planning. But it does not address pre-product development activities such as defining which products to pursue in the first place (product strategy and portfolio management) nor post launch activities (customer support activities and obsolescence planning).
An expanded definition of product planning encompasses these activities:
Defining the right products to pursue in the first place + Product portfolio management and activities + Fuzzy Front End activities — Ideation and concept generation — Concept screening Developing the products the right way + Product definition and requirements – voice of customer activities + Product development activities — Project management activities — Engineering, manufacturing and quality activities — Manufacturing and supply chain planning — Documentation and tech pubs + Product marketing and launch activities — Positioning and marcom activities — Distribution/Sales planning — Customer support and tech service planning Managing the product throughout the lifetime of the customer + Customer satisfaction and retention — Support and servicing + Managing the product line S curves: — New product introductions and extension — Product obsolescence and disposal
To be successful at creating winning products, a company must first define the “who” and “what” to achieve clarity before proceeding to the “how.” Getting clarity begins with strategic selection of precisely who the product is for (the target customer) and what problem the product solves. Though I think of it as part of product planning, it is typically described as market planning. Market planning drives the product & technology portfolio planning (the technology portfolio is different from the product portfolio – a discussion for a future blog aye?). It’s hard to fathom product planning without market planning – they are joined together at the hip.
You might be asking “doesn’t strategic planning come before market planning?” Well yes and no depending on the situation (i.e. maturity) of your company. I am sure this statement will drive lots of interesting discussion, but my point is simple: market planning drives the definition of your company’s objectives, mission, and business strategy. The business strategy includes the marketing mix better known as the 4 P’s of marketing – Place (distribution), Promotion (advertising) Product (and/or services) and price (value proposition). A successful strategy enables the creation and retention of a profitable customer base whish is the ultimate purpose of all business.
As Peter Drucker says, “There is only one valid definition of business purpose: to create a customer.” Drucker elaborated, “Because the purpose of business is to create a customer, the business enterprise has two—and only two—basic functions: marketing and innovation. Marketing and innovation produce results; all the rest are costs. Marketing is the distinguishing, unique function of the business.”
Ultimately, Drucker’s message was simple: if marketers do their jobs correctly, meaning that they focus on their consumer and incessantly innovate, then all other aspects of the business should fall conveniently into place. Drucker explained, “The aim of marketing is to make selling superfluous. [It] … is to know and understand the customer so well that the product or service fits him and sells itself. Ideally, marketing should result in a customer who is ready to buy.”
In upcoming blogs I will expand further on the details of product planning. The key takeaway is that market planning drives product planning. Though we often think of the process from a top down vantage point, Drucker was right – the purpose of business is to create a customer. Our business strategy is all predicated on creating and sustaining the customer base. So the next time you find yourself in a strategic planning exercise, think about the customer first then create your strategy of how you will win their business. Cheers!