Product Planning

Meaning of 'Product Planning'

By the term 'product planning' is meant the decisions pertain­ing to the research, development and improvement of the new things and abolition of the production of the unprofitable products. Within the product planning, any undertaking generally takes the decision as to how would it make use e of or utilize its resources, labor, material machines and capital, etc. in future.

The following are some of the main definitions of the term `product planning’:

In the opinion of Tietzin, With regard to the new products, by undertaking the researches, investigations, any development and commercialization of these products, improvement in the existing forms, and by ignoring the marginal or the unprofitable items, in­dicating the concerned activities and processes and their observa­tion, is known as the product planning.

In the opinion of Masson and Ruth, all the situations pertain­ing to the life of a product, from its origin, up to its abolition from the production-line, the concerned planning for it and control, are known as the product planning.

Elements of Product Planning

In the product planning, the following elements are included:

            i.)      Deciding as to which of the things the company would manufacture;

          ii.)      Ascertaining as to whether it will add to or reduce its product-category;

        iii.)      Effecting improvements in the products being already manufactured;

        iv.)      Closing down of unprofitable products;

          v.)      Determining the quantity of every product;

        vi.)      Deciding as to how the prices of the products shall be determined.

Significance of Product Planning

The following are some of the main reasons for the significance of the product planning:

1.       Focal Point of the Marketing Programs. In the opinion of Stanton, for the total marketing activity of a firm, the product-planning is the originating point. Really, the marketing manager, before devising some program of marketing, must first of all resort to the product planning.

2.    For Attracting Consumers. Product planning determines as to what type of specific product is required by the consumer. The concern must always produce only that product which the con­sumer wants, and not which the concern could manufacture and sell. If it is not done, the organization won't continue for a longer period. Hence it is said that production planning is a very important activity.

3.      Symbol of Managerial Efficiency. Lack of proper product planning is an indicator of the lack of the managerial ef­ficiency in the organization and proves that the whole production has been left over its luck only. Thus, it might be said that the units in which product planning is undertaken, there managers may deemed to be competent and efficient.

4.      Based on the Social Responsibility Approach of Busi­ness. In the present era, it is the social responsibility of every com­mercial undertaking that it must produce the products in accordance with the needs of the society which can only be possible when the product planning is kept in view from beforehand. The consumer-re­search is sufficiently useful in this direction.

5.      Means of Overcoming the Competition. Some of & scholars consider the product planning as a means of overcoming the competition. All the programs, like the price-determination of the product, customer services, sales and their promotion programs, etc., depend upon the type of the product planning and its different techniques utilized.