New Product Planning: How to Reduced Your Time To Market

The new product planning process reduces time to market and drives new revenue streams.

My research and experience with new product planning and control suggest a gap between innovation and commercialization results from a lack of formal processes and effective talent management strategies.

You need a new product development process that can handle products from cradle to grave.

New product launch planning and your go-to-market strategy will be essential for a successful product launch.

New product planning pharmaceuticals can take years where a new iPhone is spun up in months. The product life cycles are shrinking.

If you are developing new products, a new product progresses through a sequence of stages from introduction to growth, maturity, and decline is required. 

This sequence is known as the product life cycle and is associated with changes in the marketing situation, thus impacting the marketing strategy and the marketing mix.

You have to have everyone on the same page with marketing product planning, purchasing the inventory, and building the product for the target market.

The process of product planning development should be defined with all the elements of the product planning process.

The new product market offers the organization an opportunity to expand its revenue streams. But before you jump, you need to be sure that you have done your research, market research.

This article will review the product planning process, objectives of product planning, elements of product planning, product planning strategy with product planning example [product planning pdf].

New Product Planning Process

New product launch planning will require you to manage a lot of moving parts. Your go-to-market strategy will make your product launch a success or bust. It’s a lot of work.

Both startups and mature companies must find the next star while the cash cows feed to resources to develop new products.

New product planning is essential for most companies because of its contribution to the growth and prosperity of the company. Planning for new products demands strategic activity.

New products, when matched with the customer needs, offer opportunities for a company to strengthen its position in existing product markets and moving to new ones.

We will dive into the new product planning process with examples and a new product development flowchart.

New Product Planning answers the following questions:

• What features should you prioritize for the new product development?
• What is our product launch planning process?
• Why is product planning important to a business?
• How many stages are in my product planning and development process?
• How will you determine the price points for your product?
• Do we need outside suppliers for manufacturing?
• What are your goals for new-customer adoption, revenue, profit, and market share?

The product planning definition: Product planning is the process of producing a product idea and a set of tasks until the product is introduced to the market. Additionally, a small company must have an exit strategy for its product in case the product does not sell or is wildly successful.

The Product Planning Process is the continuous process of identifying and connecting market requirements that define a product’s feature set. Product planning serves as the basis for decisions about price, distribution, and promotion.

There are product planning software and product planning template. I suggest if this is your first time going through the process, start there. Don’t reinvent the wheel.

When it comes down to your new product launch you will want to know how many leads and sales your new product will generate. Down this handy leads calculator so you can plan better.

If we look at Apple we can see that initially started with computers. The leader of the organization, Steve Jobs introduced a long line of new products with a disciplined product strategy process.

These new products were line extensions of their existing products.  In Apple’s recent “i” line, there is the iMac, iPod, iPad, and iPhone.

New products are critical to the survival and prosperity of Apple. Do you think it helped Apple?

In this post, I’ll examine the planning of a new product, beginning with the discussion of customer needs analysis, the relationship between customer satisfaction and quality function deployment, and product planning process steps.

There are software product planning platforms on the market but be sure that they match your process.

For some companies, it’s better to use this software product planning product because it helps define the process with product planning templates.

Customer Satisfaction and the New Product Planning Process

New product introductions are classified according to the following factors: (1) newest to the market; and (2) newest to the company.

Six categories of new products are defined as follows:

1. New to the world of products: New product concepts and new products that create an entirely new market.
2. New product lines: New products that, for the first time, allow a company to enter an established market.
3. Additions to existing product lines: New products that supplement accompanies established product lines.
4. Improvements and revisions of existing products:  New products that provide improved performance or greater perceived value, and replace existing products.
5. Repositioning:  Existing products that are targeted to new markets or market segments.
6. Cost reductions:  New products that provide similar performance at a lower cost.

Typically, a company’s new product program includes items in all or most of the six categories. Totally new products account for only 10% of all new product introductions.

New product planning is based on customer needs analysis. Even new-to-the-world product ideas should have some relationship to needs that are not being met by existing products.

Corporate Business Strategies

The business mission, objectives, and product strategy should determine the product market areas of interest to marketing management.  Business purpose and scope set important guidelines for new product planning.

These areas should not be selected only by research and development management. The entire management team should consider product opportunities and establish priorities to guide new product planning.

Customer needs analysis provides important information for determining where competitive advantage can be gained by developing new products.

Each product the company should be defined and analyzed. The analysis should include market segment identification and evaluation to determine which segments offer new product opportunities to the company.

Extensive analysis of existing and potential customers and competition is vital to effective new product planning.

Identifying Customer Satisfaction Opportunities

The objective is to identify gaps and customer satisfaction that may offer opportunities for product innovation. The gaps are determined by comparing the customer’s expectations about the product and supporting the service’s actual performance.

Customer satisfaction analysis identifies opportunities for:

1. New product planning
2. Improvements in existing products
3. Improvements and production processes
4. Improvements and supporting services

The product planning process can also be used to guide the planning and improvement of products, processes, and support services. Many new product activities of companies do not involve totally new products.  

By focusing on product planning on actual and potential buyers, the entire company is involved in customer satisfaction. This market-guided approach to product planning helps to avoid a mismatch between products and customer needs.

Customer satisfaction measurement starts with a product-market frame of reference. The analysis may include generic, product type, and market levels. The market segment analysis is often necessary to identify specific customer needs and competitive opportunities.

The objective is to identify gaps between the buyer’s requirements and how well they are being satisfied. A large gap may offer new product opportunities.

Buyer satisfaction is evaluated by using various product and service attributes to express buyers’ preferences and comparisons of competing brands. The analysis may include preference mapping and other techniques

I’ve discussed this in past blog posts. The objective is to identify the important preference dimensions for the buyers in the product market and specific market segments.

Opportunities for new and improved products are identified by major preference gaps for attributes that are important to buyers.

Quality Function Deployment (QFD)

Quality Function Deployment is a management system for new product planning that assures that customer needs to drive the product design and production processes. The system was developed in Japan in the early 1970s. QFS provide several benefits:

• Product objectives based on customer requirements are not misinterpreted at subsequent stages.
• Marketing strategies or sales points did not become lost or blurred during the translation process from marketing through planning and execution.
• Critical production control points are not overlooked– everything necessary to achieve the desired outcome is understood and in place.
• Better efficiency is achieved.

An important part of QFD is developing inter-functional teamwork among the marketing staff, design engineers, and manufacturing. The entire process is centered on customer needs.

QFD is a comprehensive analysis of the planning process. The objective is to translate customer requirements into final product characteristics that are deployed throughout the company’s design, production, and marketing product launch.

The primary analysis technique is the use of a two-way matrix relating to customer requirements and product characteristics.

Success Criteria

Exhibit 1 indicates the factors that contribute to the success of new products. It is based on responses from more than 700 manufacturers of over 13,000 new products introduced during a five-year period.  

The study found some differences between industrial and consumer products companies, as well as across different Industries.

Technological superiority is considered more important by industrial products companies.

While top management support is important for consumer durable and non-durable companies. The study also found that the importance of these factors varies by the type of new products being developed.

In my experience companies that successfully launch new products display the following characteristics:

• Operating Philosophy.  These companies are committed to growing through internally develop new products and follow a formal new product planning process. Tight idea screening practices were used.
• Organizational Structures.  The formal new product planning structure is located in the engineering department but provides for close coordination between the marketing functions.
• The Experience Effect. With increased new product experience, companies and prove new product profitability by reducing the cost per introduction.
• Management Styles. There is an effect of matching management style to immediate new product development needs. Management is willing to adjust its style to keep up with changing conditions.

Product Planning Process Flowchart

A new product does not have to be a high technology breakthrough to be successful. It must provide customer satisfaction.

I typically look for a product-market fit that takes place when you have evidence that your products and services are creating customer value and getting traction in the market.

Making and launching new products like Apple requires systematic planning to coordinate the many decisions, activities, and functions. The major stages in the planning process are shown in Exhibit 2.

Each planning stage is examined and related. This shows the importance of a coordinated program of new product planning.

There are two key considerations in new product planning:

1. Generating a stream of new product ideas that will satisfy management’s requirements for new products.
2. Establishing procedures and methods for evaluating new product ideas as they move through the planning stage.

Customer needs analysis should drive the planning process.

Deciding Which Customer Needs to Target

New products provide an important strategic capability for achieving corporate and business unit objectives. Thus, it is important that businesses formulate guidelines for new product planning.

Marketing management must decide the product markets and market segments in which to compete.

These decisions become important guidelines for the new product planning process. This can be seen in Exhibit 2 (seen above). Customer satisfaction analysis determines opportunities for new products and processes.

Organizational Structure for New Product Planning

New product planning includes various business functions. How to organize for new product planning has been widely debated for several decades. Many product management systems have been developed and implemented.

And they all have deficiencies, yet there is agreement among managers from successful firms that the new product planning process requires a coordinated effort throughout the organization. The objective is to plan and coordinating new product opportunities.

Important concerns include where to place responsibility and how to organize for new products. The major organizational alternatives are:

1. Committee
2. Product planning managers or brand managers
3. New product department
4. Venture teams

At Ohmeda, I was involved with the pulse oximeter, an off-site location for new products and we called it “Skunk Works.” This is an example of a venture team.

New Products Committee

This organizational structure is widely used because it involves the various functional interest in new product planning without creating an organizational unit.

This approach is flexible and a coordinating mechanism for a particular project or on a continuing basis. Committees may be formed at the top-level management for decision-making purposes.

Or at operating levels for coordinating or special-purpose assignments, such as screening new product proposals.

By using the committee system, companies avoid establishing a permanent, full-time organizational unit. This has several advantages. Limitations of the committee system may include a lack of authority, coordination difficulties, and a lack of full-time monitoring.

The key factor in the success of a new product committee is the chairperson. This person must be effective in moving the committee toward its signed objectives.

The selection of committee members is also important. Those chosen should be able to successfully interact in and contribute to the group.

New Product Planning Manager

This organizational form consists of an individual, sometimes assisted by one or a few additional people.

The manager is responsible for planning and coordinating various business functions for the new product. In most cases, a product manager is a staff person.

They do not have authority for the overall product planning activities but may coordinate activities. A product manager usually has a background and experience in research and development, engineering, or marketing.

The product manager of major new products may report to an SBU manager or corporate executive. It is important to know that product managers’ titles and range of responsibilities vary widely across companies.

New Product Development Process

This organizational form places new product planning responsibilities in a formal department.

Two versions may be found:

1. A separate department to give new products attention, push, focus, and drive;
2. The product manager cluster, which consists of a manager responsible for a group of product managers. The departmental approach provides a strong base of support for new product planning. But other departments may create internal frictions.

Organizational structure is required for the new product development planning process

Venture Team and New Products

This approach requires the creation of an organizational unit to perform some or all of the new product planning functions:

A venture team is a separate division or specially incorporated company created specifically for new products and new business ideas.

Venture teams offer many advantages, including flexibility and quick response. They provide functional improvement and full-time commitment, and they can be disbanded when appropriate.

Team members may be motivated to participate in a project that offers possible job advancement opportunities.

Selecting the most appropriate type of organization must take into account the characteristics and needs of a specific organization.

A study of 276 firms found the new product department to be the most popular, followed by the brand manager, and the new product committee.

Since so many factors are involved, it is impossible to generalize about the new product organizational structure. The company needs some type of organizational mechanism.

Wherever responsibility is placed, new product planning, strategic planning, and marketing strategy should be closely coordinated.

Wrap-up on the New Product Planning Process

New product planning is a vital strategic activity in all companies. Companies that are successful in new product planning follow a formal new product planning process.

Guided by effective company structures for managing new products. Experience helps them to improve new product planning over time. Their management styles are responsive to new product planning needs.

Steps in new product planning include:

1. Strategy development
2. Idea generation
3. Screening and evaluation
4. Business analysis
5. Product development
6. Marketing strategy development
7. Market testing
8. Commercialization (often known as go-to-market)

What is your new product planning process and is it documented? Your new product planning strategy should be guided by a new product planning roadmap.

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