June 19, 2018 418
June 19, 2018 418
Product planning has something to do with all activities that enable a company to determine what products it will produce and market to satisfy consumers wants while the development of product concerns the technical activity of product research, engineering, and design.
More specifically, the combined scope of product planning and development includes making decisions in the following areas:
⦁ Which products should the firm make and which should it buy?
⦁ Should the company market more or fewer product?
⦁ What new uses are there for each product?
⦁ What brand, package, and the label should be used for each product?
⦁ How should the product be styled and designed and in what sizes, colors, and materials should it be produced?
⦁ In what quantities should each of it be produced?
⦁ How should the product be priced?
Steps in the Development Process
As a new product is developed, it progresses from the idea stage to the production and marketing stages. In each stage, management must decide whether to move into the next stage, abandon the product or seek additional information.
In general, the developmental process follows the steps outlined below:
1. Generational of New Product Ideas
New product development starts with an idea. What is important here is the company’s system for stimulating new ideas and then acknowledging and reviewing them.
2. Screening of Ideas
Screening of Ideas to determine which ones need further study.
3. Business Analysis
At this stage, the new product idea is expanded into a concrete business proposal. Then, the company’s management here:
⦁ Identifies product features
⦁ Estimates market demand and the product’s profitability
⦁ Establishes a programme to develop the product
⦁ Assigns responsibility for further study of the product’s feasibility.
4. Product Development
At this stage, the idea on paper is now converted into physical product, that is, pilot models or small quantities are produced to lay down specifications.
5. Test Marketing
Market tests and other commercial experiments in limited geographic areas are conducted to ascertain the feasibility of full-scale marketing programme. At this point, management must make the final decision regarding whether to market the product for commercials or not.
At this point, full-scale production and marketing programmes are planned, and then the product is launched. Management has complete control of the product up to this stage, but once it enters into the market, competition and other marketing environments become major determinants of its destiny.
Follow-up is necessary so as to see how the product is performing in the market and this requires market research knowledge.
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