Introduction :-
Product
planning is that part of marketing, which is concerned with determining the
products to be offered, deleted & diversification.
Product planning is the process of searching ideas for new
products, screening them systematically, converting them into tangible products and introducing the
new product in the market. It also involves the formation of product policies and strategies.
Objectives
of Product Planning :-
Product
planning is one of the most important function of a marketing manager. The
following are its objectives :-
1. To
offer products based upon customer needs.
2. To
diversify, to capitalize on the company’s strength.
3. To
utilize the available resources more profitability.
4. To
decide on the elimination of non-profitable products.
5. To
change the features of the product as per the changes in the market.
6. For
long-term survival.
Components
of Product Planning :-
1. Product
Innovation
2. Product
Diversification
3. Product
Development
4. Product
Standardization
5. Product
Elimination
6. Product
Mix & Product Line
1. Product
Innovation - Innovation is a part of continuous improvement. In the absence
of innovation, products become stale & hence die in the market. Innovation
is required to keep up with the phase of changing market needs. According to
Drucker, “Innovation will change customer’s wants, create new ones, extinguish
old ones & create new ways of satisfying wants.”
2. Product
Diversification - When a manufacturer offers more products in different
areas, it is referred as product diversification. In fact, when a manufacturer
diversification. Diversification normally involves business in a new area. Eg: ITC entering
into hotel business, sony entering into film production business.
3. Product
Development - It involves introducing a new product either by replacing the
existing one or innovating a completely new product. It can either be brand
extension or line extension. Company must be careful while developing new
products because research shows that 92% of them fall in the market. Another
danger of product development is cannibalization.
4. Product
Standardization - It implies a limitation of types of products in a given
class. It gives uniformity in terms of quality, economy, convenience &
Value. Eg: Each model of T.V. gives a different standard. Standardization
promises a minimum level of performance & hence is used as a benchmark for
quality.
5. Product
Elimination - This involves an emotional decision of withdrawing the
existing product line. Decision must be carefully taken based upon current
market share, future prospects etc. The product elimination involves reviewing
the present product portfolio, analyze their profitability & then decide on
discontinuance of a product.
6. Product
Mix & Product Line - Product line is defined as a group of products
offered by a company which belongs to same family of products or similar to
each other or substitutes. Eg: Product line of ponds for personal care products
includes cold creams, talcum powders, etc.
Product
Mix is defined as combination of product lines offered by a company to satisfy the customers needs. Eg :
Product mix of Bajaj includes two wheelers, home appliances, electrical
appliances, financial products etc.
Product
Portfolio Planning :-
A
product mix & line of a company put together forms product portfolio of a
company. It can be explained in terms of product width, product depth and the product
consistency.
Product width explains the number of product lines that a company offers, whereas product indicates the number of products in each line & product consistency indicates the closeness of items of range of products.
Product width explains the number of product lines that a company offers, whereas product indicates the number of products in each line & product consistency indicates the closeness of items of range of products.