BETD 2324

Product Design and

Development
LECTURE 5
PRODUCT PLANNING

Hambali b. Boejang PhD

 INTRODUCTION
• The planning process (phase 0) takes place before the project itself
is formally approved. It is developed with company’s goals;
company various capabilities, customer and company constraints,
and competitive environment in mind (project characteristics).
• The product plan identifies the portfolio of products (product
profile) to be developed by the organization and the timing of their
introduction to the market.
• The planning process considers design problems or product
development opportunities identified by many information sources.
• The portfolio of the projects is chosen.
• Timing of projects is outlined.
• Resources are allocated.
 LEARNING OBJECTIVES

• At the end of this chapter, student should be able to:

• Explain the cross-functional planning process
which develops the product development
team's mission statement.
• Discuss the broader, multiple-product,
multiple-project context of product
development in established firms.
 The Product Planning Process.

• If planning is not planned in great detail – some of short-

comings:
• Inadequate coverage of target markets.
• Poor timing of product introduction.
• Mismatches between available internal and external development
capacity, and the number of projects pursued.
• Poor distribution of man-powers, with some projects overstaffed or
understaffed.
• Introduction and subsequent cancellation of ill-conceived project.
• Frequent changes of directions of project.
Product Development Projects

1. New product platform:

2. Derivatives of existing product platforms
3. Incremental improvements to existing
products:
4. Fundamentally new products
 The product planning Approach
• To develop a product plan and project mission statements, it is suggested a five-step
process
• Identify opportunities.
• Evaluate and prioritize projects.
• Allocate resources and plan timing.
• Complete pre-project planning.
• Review on the results.
 STEP1: Identify Opportunities
• The first step in planning is the identification of opportunities which is
also known as opportunities funnel where the team collects all
information from various sources.
• Marketing and sales personnel.
• Research and technology development organizations.
• Current product development teams.
• Manufacturing and operations organizations.
• Current or potential customers.
• Third parties such as suppliers, inventors, and business partners.
 STEP1: Identify Opportunities
• The team needs as much as possible information from these sources
for it to see what opportunities available for the manufacturer to
develop a product.
• The information gathering activities may take few months or years,
depending on types of product categories.
• From the information gathered, the team is able to come up with a
product planning.
 STEP1: Identify Opportunities
• The information also enable the team to decide on which project basis
should the new development be classified.
• This opportunities channel of getting information - interviewing the
heavy users, current and potential customers, customer complaints,
technological advancement in existing product categories, trend and
lifestyle, and many other options such as benchmarking, and warranty
card feedbacks, and focus group.
• The promising opportunities (data) are then archived in a database or
system for further consideration and exploration by the team itself.
 STEP2: Evaluate and Prioritize
Projects
• Selecting the most promising opportunity to pursue is challenging.
• Four basic perspectives are useful in evaluating and prioritizing
opportunities for new products in existing product categories:
i. competitive strateg y
ii. market segmentation
iii. technological trajectories, and
iv. product platforms (lecture 3).
 STEP2: Evaluate and Prioritize Projects
• The thermo flask manufacturer can adopt this business strategy based
on its own competencies, and how it wants to compete.
• Two strategies for the team to consider.
1. Competitive Strateg y
• The competitive strategy is based upon the following:
• The technology leadership: the manufacturer put a lot of their efforts in the
R&D
• The cost leadership: the manufacturer focuses on the activities in reducing the
overall cost of the development efforts.
• Customer focus; the manufacturer work closely with the customer by involving
them in their development efforts to get feedbacks on customer preferences
and needs.
 STEP2: Evaluate and Prioritize Projects
2. Market Segmentation
• Two main reasons for a development team need to segment the
customers:
• To consider the status or actions of competitors
• To consider the strength of the firm's existing products with respect to each
well-defined group of customers.
• By mapping competitors' products and your own products onto
segments, you will be able to study the strength and weaknesses of your
own product and your competitors.
 Step 3: Allocating Resources and
Plan Timing
• Resource Allocation
• The development resource. Inappropriate allocation of
resources may lead to skilled engineers and managers
assigned to more than one projects, poor productivity,
projects require an extra time to be completed, late new
product introduction, and less profit.
• Depends on types of product development projects.
 Step 3: Allocating Resources and
Plan Timing
• Project Timing.
• To determine the timing of product launching and
sequence of development phase as well as projects is
depending on the following:
• Timing of product introduction
• This is also known as time-to-market.
• Technology readiness
• The integration of advance technology
Step 3: Allocating Resources and
Plan Timing
• Market readiness
• Too slowly releasing an improved product may lead lagging
behind competitors. Too fast, will leave customer in frustration.
• Forecasting
• The capabilities or being aware with market trend and customer
preference is an advantage (anticipate).
 Step 4: Complete Pre-Project
Planning
• Once the project has been approved, but before substantial
resources are applied, a pre-project planning activity takes place.
• At this point, the earlier opportunity statement may be rewritten
as a product vision statement. The objective defined by a
product vision statement may be very general.
• In order to provide clear guidance for the product development
organization, the team formulates a more detailed definition of
the target market and of the assumptions under which the
development team will operate.
• These finally end up as a mission statement
 Step 4: Complete Pre-Project
Planning -Mission Statement
• The Mission Statement provides a detailed definition of
the assumptions, including:
• One-sentence description of the product (AVOID IMPLYING
A SPECIFIC PRODUCT CONCEPT !!!)
• Benefit proposition
• Key Business Goals (Time, Cost, Quality)
• Target market(s)
• Target price
• Assumptions and constraints
• Stakeholders
 Step 4 - Mission Statements
• Brief description of the product: product vision
statement. This description typically includes the key
customer benefit of the product.
• Key business goals: It has project goals which support
the corporate strategy; these goals generally include goals
for time, cost, and quality (e.g., timing of the product
introduction, desired financial performance, market
share targets).
• Target market(s) for the product: There may be
several target markets for the product. This part of the
mission statement identifies the primary market as well
as any secondary markets that should be considered in
the development effort.
 Step 4 - Mission Statements
• Assumptions and constraints that guide the
development effort: Assumptions must be made
carefully; although they restrict the range of possible
product concepts, they help to maintain a manageable
project scope. Information may be attached to the
mission statement to document decisions about
assumptions and constraints.
• Stakeholders: One way to ensure that many of the
subtle development issues are addressed is to explicitly
list all of the product's stakeholders, that is, all of the
groups of people who are affected by the product's
success or failure.
Step 4: Complete Pre-Project
Planning
 Step 4: Complete Pre-Project
Planning - Product Planning
• Master plan of overall
product strategy
• Display current & future
product line-up
• Prepared by Corporate
Strategy & Planning
• Approved by Board of
Directors
 Summary
• Product planning is a periodic process that
considers the portfolio of product development
projects to be executed.
• Product planning consists:
• Identify opportunities.
• Evaluate and prioritize projects.
• Allocate resources and plan timing.
• Complete pre-project planning.
• Reflect on the results and the process.
 Summary
• The opportunity funnel withdraws opportunities for
new product platforms, enhancements, and
fundamentally new products from several sources.
• Product development projects can be evaluated
through competitive strategy, and market segmentation
and product platform plans.
• Resources must be allocated accordingly for successful
completion.
• A mission statement for each product development
project documents the product vision, business goal,
target markets, critical assumptions, and the product's
stakeholders.
The End