Everything you should know about successful product planning: definition, importance, and strategies.
Product planning has great importance for businesses. In product management, the planning process is the foundation of the marketing programs and overall production. If any step fails, then the entire initiative can be doomed.
What are the criteria for product planning? What does a product planner do? How many steps are involved in the product planning process? Whether you are starting a business for the first time or are about to initiate a new product development, this is what you need to know. This post will assist to figure it out.
What is Product Planning?
Product planning is about deciding а particular product that will be produced or distributed by an enterprise. This process includes all internal decisions, tasks, and steps necessary to develop an efficient product. This is actually about everything you need to do that will affect the product itself.
Successful product planning determines the product’s characteristics best meeting the clients’ desires, as well as characteristics that add saleability to products.
Do not confuse this term with go-to-market planning that involves the external-facing steps related to introducing and marketing your product to the public.
What is the purpose of product planning?
The purposes of product planning are earning maximum profits, making the best possible exploitation of the available resources, and providing customer satisfaction.
What is a strategic product planning process and why is it important?
Strategic decisions that product managers make can drive real business value and customer satisfaction. Experienced managers know how to prioritize the work that matters most by writing a strategic project plan.
Strategic product planning is about defining the way in which you will achieve your product vision. You should set goals and initiatives to guide your strategy and prepare a timeline to reach them. This timeline is often called a product roadmap.
Why is strategic planning crucial? It is rather important to have a unified plan that will tie the objectives of the company to the product-level work. The right strategic plan will help you to identify business opportunities and make proper investment decisions.
Essential Product Planning Benefits
Why is product planning important? This is a significant part of every product’s implementation journey that allows teams to securely develop products helping to gauge threats and risks.
Besides, efficient product planning is beneficial for:
1. Improving customer service
An effective product planner and proper scheduling help in providing advanced support to clients in terms of quality goods at reasonable prices. Well-prepared delivery and high quality of the product are an integral part of product planning that accelerates the confidence of customers.
2. Optimum utilization of resources
Effective utilization of available costs and resources that go into the production process is the direct result of product planning. When product managers avoid wastage of available resources and optimally use required resources, they get the real benefits related to product planning.
3. Better inventory control
A reliable product planner helps in managing inventory and reduces investment in inventory. In order to provide effective customer support, it requires a minimum inventory of work-in-progress and lower finished stock. Proper planning will also help you in better controlling over raw materials that will lead to better purchases.
4. Enhancing the role of the brand image
It is not a secret that good products make happy customers. If you are striving to produce a great product, you need a proper system of product planning that will help you in keeping everything systematized. This will actually increase profits, sales, industrial harmony, and will lead to customer loyalty and enhancing the role of your brand image.
When does product planning happen?
Usually, companies set a product strategy annually. The global company strategy then informs the product strategy that is also typically set on an annual basis.
The exact timelines depend on the organization, its type, and the level of details required. Many businesses look one or several years ahead, so their plans are likely to be more detailed.
Planning requires adapting to evolving customer needs and shifts in the market. Therefore, many organizations prepare a quarterly business review to refine their plans throughout the year.
Different approaches to creating product plans
The workflow and development methodology of a particular business also affects how it approaches product planning. For example, a software solution is more easily changed midstream than a hardware product. A product plan will reflect it.
Some companies practice a Waterfall approach where planning is done upfront, work is done serially, and changes are uncommon. You may find this in organizations with longer service or manufacturing lead times. They can create PRD or MRD (product/market requirements document) to capture the market needs of clients and define requirements upfront before the work begins.
This contrasts with Agile companies whose teams take a more adaptive and iterative approach to planning. As you know, they capture customer needs in the form of user stories and prioritize them in accordance with business goals and objectives.
The Process of Product Planning
Product planning is quite a global view of the management and technical side of a product-based business. It contains all of the moving parts from initiation to exit. Let’s dive into the step-by-step process of product planning.
Step 1. Defining the concept
Formulating the product concept is the most crucial step in your business, which defines what you are trying to create as a product. Make sure your idea is real and jot down this stage. Do not forget to consider all upcoming problems and challenges based on a strong understanding of the solutions required.
Step 2. Adding details of the market research
After realizing the first step, try your best to do some market research. Here you have to prove that your idea has a market to sell. You should carefully study your competitors, analyze their strengths and weaknesses, and find the niche where your product can have benefits.
Step 3. Planning the testing process
The next step of the product planning process is to build the MVP (Minimum Viable Product). It will help you to put a real-life product in front of your audience for them to look at, test, and provide valuable feedback.
Step 4. Writing product maturity details
You will need product maturity right after the launch. This phase means the merge of your product roadmap and product planning. The roadmap will help you with working on creating your product team, pricing changes, and infrastructure.
Step 5. Considering the product life cycle
A product launch is not a final point in the process of product planning. The process also involves managing the product throughout different stages of its lifecycle.
During the initial growth phase, sales are usually strong and competition is quite low. However, with time, rivals come up with their own products. Therefore, a reliable life cycle in product planning will maintain the balance.
What Are the Best Practices in Product Planning?
There are different ways of how product planning can happen.
1. The Four Gates conception
The Four Gates theory determines the four key stages in an efficient product planning process. This concept was developed by J. Cagan from Carnegie Mellon University.
- The 1st gate is identifying the customers’ needs.
- The 2nd gate is about research and refining the product.
- The 3rd gate is working on the concept design.
- The 4th one is about adding details and implementing a stress analysis.
The author highlights that the second phase is the most important.
2. Roadmapping tools
When you use a reliable software solution to map out your product planning processes, you can be sure that they flow in the right way.
Some time ago, product managers used paper to create a roadmap or applied Excel. Nowadays, you may find numerous online options for visual strategy mapping. You can customize roadmaps, putting them at the heart of the business, not to a distant document.
3. Agile product planning
You may easily apply any Agile approach to the product planning process. There are many available tools to assist to go in this direction.
Agile product planning consists of three levels:
- The Vision is what the company will reach. This is about a shared goal that all will work towards.
- The Strategy – about how the goal will be achieved. This includes identifying the target group, their needs, and all product benefits.
- The Tactics focuses on the functionality details, design, user interaction, and sprint goals.
What are the reasons why product planning can fail?
Any process is only ever as good as what is put into it. Product planning is not an exclusion. Plans give a framework for the activity, and software gives the required tools.
However, there are many things that can go wrong at every phase. For example, a product concept may turn out to be completely wrong. Marketing can also be at fault as it could have been done poorly. And of course, there are cases when it might even be pure bad luck that causes the product to fail.
A Good Product Planning Strategy: Some Tips to Follow
How should you schedule product planning? Whom should you involve, and when? Here are some essential tips that will help you craft your product planning culture:
- Build up an organizational culture that will consider product planning as an ongoing process. If you persuade your team and stakeholders that product planning must be ongoing, you will ultimately have more chances to deliver more successful products.
- Create a culture of frequent communication. This culture should exist throughout the whole product development process, not merely in a few meetings. You can make changes to your plan at any stage throughout the process. And your team may also want to propose updates to the strategic plan. So you will need to communicate more frequently across your company to make sure everyone knows about any updates or additions to your plans.
- Summarize your research with main takeaways. Product managers, when they want to suggest strategic plans or goals for the product, want to back up those changes with data. This should not mean they merely dump volumes of research onto the team expecting them to find conclusions for themselves. PMs must summarize the data and present what quickly shows the support for their ideas.
- Practice product planning meetings. These ceremonies will ensure that everyone on the team is up-to-date and has a chance to weigh in if required. When you’re treating planning as a part of the process, and informing your team about all updates and changes, you can run product planning ceremonies, where you discuss the product you have made with all possible updates.
Effective product planning lays the basement for successful product management.
It provides the foundation for product teams to plan, develop, and deliver their solutions. It also allows product managers to identify the appropriate audience and find the market niche prior to reaching the product planning stages.
What are the elements of product planning in your organization? Do you use specific tools to optimize your management plan? Feel free to share your experience in the comments!