A Synopsis ReportOnTHE STUDY INTO THE PROCESS OF PRODUCT PLANNING AND DEVELOPMENT IN MARKETING

For the partial fulfillment of the requirement ofMASTER OF BUSINESS ADMINISTRATIONAffiliated to Uttar Pradesh Technical University, Lucknow, (U.P.)(2013-2015)

Under The Guidance of: Submitted by:Dr. Avijit Dey Mr. Ankit Kumar

Roll No.1327270012

GNIT MBA Institute6-C, Knowledge Park-II, Greater Noida ( G. B. Nagar)

INTRODUCTIONStudy of Product Planning and Development and its effectiveness in the New Product Development

History of Product Planning:

Modern production planning methods and tools have been developed since late 19th century. UnderScientific Management, the work for each man or each machine is mapped out in advance (see image). The origin of production planning back goes another century.Kaplan(1986) summarized that "the demand for information for internal planning and control apparently arose in the first half of the 19th century when firms, such as textile mills and railroads, had to devise internal administrative procedures to coordinate the multiple processes involved in the performance of the basic activity (the conversion of raw materials into finished goods by textile mills, the transportation of passengers and freight by the railroads. Herrmann (1996) further describes the circumstances in which new methods for internal planning and control evolved: "The first factories were quite simple and relatively small. They produced a small number of products in large batches. Productivity gains came from usinginterchangeable partsto eliminate time-consuming fitting operations. Through the late 1800s, manufacturing firms were concerned with maximizing the productivity of the expensive equipment in the factory. Keeping utilization high was an important objective. Foremen ruled their shops, coordinating all of the activities needed for the limited number of products for which they were responsible. They hired operators, purchased materials, managed production, and delivered the product. They were experts with superior technical skills, and they (not a separate staff of clerks) planned production. Even as factories grew, they were just bigger, not more complex."About production planning Herrmann (1996) recounts that "production scheduling started simply also. Schedules, when used at all, listed only when work on an order should begin or when the order is due. They didn't provide any information about how long the total order should take or about the time required for individual operations. In 1923Industrial Managementcited a Mr. Owens who had observed: "Production planning is rapidly becoming one of the most vital necessities of management. It is true that every establishment, no matter how large or how small has production planning in some form; but a large percentage of these do not have planning that makes for an even flow of material, and a minimum amount of money tied up in inventories.

Product Planning:

Production planningis theplanningofproductionandmanufacturingprocesses in a company or industry. It utilizes theresource allocationof activities of employees, materialsandproduction capacity, in order to serve different customers. Different types of production methods, such as single item manufacturing,batch production,mass production,continuous productionetc. have their own type of production planning. Production planning can be combined with production control into production planning and control, or it can be combined and or integrated into enterprise resource planning.Production planning is used in companies in several different industries, including agriculture, industry, amusement industry etc.Product planning is a plan for the future production, in which the facilities needed are determined and arranged.A production planning is made periodically for a specific time period, called the planning horizon. It can comprise the following activities: Determination of the required product mix and factory load to satisfy customers needs. Matching the required level of production to the existing resources. Schedulingand choosing the actual work to be started in the manufacturing facility" Setting up and delivering production orders to production facilities.In order to develop production plans, the production planner or production planning department needs to work closely together with the marketing department and sales department. They can provide sales forecasts, or a listing of customer orders."The "work is usually selected from a variety of product types which may require different resources and serve different customers. Therefore, the selection must optimize customer-independent performance measures such as cycle time and customer-dependent performance measures such as on-time delivery."A critical factors in production planning is "the accurate estimation of the productive capacity of available resources, yet this is one of the most difficult tasks to perform well."Production planning should always take "into account material availability, resource availability and knowledge of future demand."Product Development:Product developmentis the process of designing, creating and marketing newproductsor services to benefit customers. Sometimes referred to as new product development, the discipline is focused on developingsystematic methods for guiding all the processes involved in getting a newproductto market.NPD Structure:The NPD process consists of a series of activities that firms employ in the complex process of delivering new products to the market. Every new product will pass through a series of stages from ideation through design, manufacturing and market introduction. The development process basically has three main phases:1. Fuzzy front-end(FFE) is the set of activities employed before the formal and well defined NPD or stage-gate process2. Product designstarts with the development of the new product and it ends at pre-commercialization analysis stage.3. Fuzzy back-endor commercialization phase represent the action steps where the production and market launch occur.The front-end phases have been very well researched, with valuable models proposed. Peter Koen et al. provides a five-step front-end activity called front-end innovation: opportunity identification, opportunity analysis, idea genesis, idea selection, and idea and technology development. He also includes an engine in the middle of the five front-end stages and the possible outside barriers that can influence the process outcome. The engine represents the management driving the activities described. The front end of the innovation is the greatest area of weakness in the NPD process. This is mainly because the FFE is often chaotic, unpredictable and unstructured.Engineering design is the process whereby a technical solution is developed iteratively to solve a given problem.The design stage is very important because at this stage most of the product life cycle costs are engaged. Previous research shows that 70% - 80% of the final product quality and 70% of the product entire life-cycle cost are determined in the product design phase, therefore the design-manufacturing interface represent the greatest opportunity for cost reduction.Design projects last from a few weeks to three years with an average of one year.Design and Commercialization phases usually start a very early collaboration. When the concept design is finished it will be sent to manufacturing plant for prototyping, developing a Concurrent Engineering approach by implementing practices such asQFD,DFM/DFAand more. The output of the design (engineering) is a set of product and process specifications mostly in the form of drawings, and the output of manufacturing is the product ready for sale.Basically, the design team will develop drawings with technical specifications representing the future product, and will send it to the manufacturing plant to be executed. Solving product/process fit problems is of high priority in information communication design because 90% of the development effort must be scrapped if any changes are made after the release to manufacturing.

NPD Models:Conceptual models have been designed in order to facilitate a smooth process. The concept adopted by IDEO, a successful design and consulting firm, is one of the most researched processes in regard to new product development and is a five-step procedure.These steps are listed in chronological order:1. Understand and observe the market, the client, the technology, and the limitations of the problem;2. Synthesize the information collected at the first step;3. Visualise new customers using the product;4. Prototype, evaluate and improve the concept;5. Implementation of design changes which are associated with more technologically advanced procedures and therefore this step will require more time.One of the first developed models that today companies still use in the NPD process is the Booz, Allen and Hamilton (BAH) Model, published in 1982. This is the best known model because it underlies the NPD systems that have been put forward later.This model represent the foundation of all the other models that have been developed afterwards. Significant work has been conducted in order to propose better models, but in fact these models can be easily linked to BAH model. The seven steps of BAH model are: newproduct strategy, idea generation, screening and evaluation, business analysis, development, testing, and commercialization.A pioneer of NPD research is Robert G. Cooper. Over the last two decades he conducted significant work in the area of NPD. The Stage-Gate model developed in the 1980s was proposed as a new tool for managing new products development processes.The 2010 APQC benchmarking study reveals that 88% of U.S. businesses employ a stage-gate system to manage new products, from idea to launch. In return, the companies that adopt this system are reported to receive benefits such as improved team work, shorter cycle time, improved success rates, earlier detection of failure, a better launch, and even shorter cycle times reduced by about 30%.These findings highlight the importance of the stage-gate model, making it the single most important discovery in the area of new product development.

PURPOSE:1. To achieve coordination among various departments relating to production.2. To make adequate arrangement of men, money, materials, machines tools, implements and equipment relating to production.3. To decide about the production targets to be achieved by keeping in view the sales forecast.4. To keep production operation continuous.5. To achieve desired share of the market.6. To fix right type of man for right type of job.7. To achieve the desired level of profit.8. To make all arrangements to remove possible obstacles in the way of smooth production.9. To achieve economy in production cost and time.10. To initiate production on modern lines.11. To operate the plant at planned level of efficiency.12. To develop alternative plans in order to meet any emergency or contingency.

Process:

1:Idea Generation

Ideationis thecreativeprocess of generating, developing, and communicating new ideas, where anideais understood as a basic element of thought that can be either visual, concrete, or abstract.Ideation comprises all stages of a thought cycle, frominnovation, to development, to actualization. As such, it is an essential part of thedesign process, both in education and practice.

2. Idea Screening:

A process used to evaluateinnovativeproductideas,strategiesandmarketingtrends. Idea screeningcriteriaare used to determinecompatibilitywith overallbusiness objectivesand whether the idea wouldofferaviablereturn on investment. Whatever does not meet these criteria is typically discarded.

3. Concept Testing:Concept testing(ormarket testing) is the process of usingquantitative methodsandqualitative methodsto evaluate consumer response to a product idea prior to the introduction of a product to themarket. It can also be used to generate communication designed to alter consumer attitudes toward existing products. These methods involve the evaluation byconsumersof product concepts having certain rational benefits, such as "a detergent that removes stains but is gentle on fabrics," or non-rational benefits, such as "a shampoo that lets you be yourself." Such methods are commonly referred to as concept testing and have been performed using field surveys, personal interviews and focus groups, in combination with various quantitative methods, to generate and evaluate product concepts.

4. Business Analysis:Business analysisis a researchdisciplineof identifying business needs and determining solutions to business problems. Solutions often include a software-systems development component, but may also consist of process improvement, organizational change or strategic planning and policy development. The person who carries out this task is called a business analystor BA. Business analysts do not work solely on developing software systems. Those who attempt to do so run the risk of developing an incomplete solution.

5. Product Development:Product developmentis the process of designing, creating and marketing newproductsor services to benefit customers. Sometimes referred to as new product development, the discipline is focused ondevelopingsystematic methods for guiding all the processes involved in getting a newproductto market.

6. Test Marketing:

Atest market, in the field of business andmarketing, is a geographic region or demographic group used to gauge the viability of a product or service in the massmarketprior to a wide scale roll-out.

7. Commercialisation:Commercialization orcommercialisationis the process or cycle of introducing a new product or production method into the market. The term often connotes especially the entrance into the mass market as opposed to earlier niche markets, but it also includes a move from the laboratory into even limited commerce.

8. Review of Market Performance: Marketing performance measurement and management(MPM) is a term used by marketing professionals to describe the analysis and improvement of the efficiency andeffectivenessof marketing.This is accomplished by focus on the alignment of marketing activities, strategies, and metrics with business goals.It involves the creation of a metrics framework to monitormarketing performance, and then develop and utilize marketing dashboards to manage marketing performance.

Executive SummaryProduct Planning and DevelopmentProduct planning and development is a vital function due to several reasons. First, every product has a limited life span and needs improvement or replacement after some time. Secondly, needs, fashions and preferences of consumers undergo changes requiring adjustments in products.Thirdly, new technology creates opportunities for the design and development of better products. Product planning and development facilitate the profitability and growth of business. Development of new products enables a business to face competitive pressures and to diversity risks. Product is the most important constituent of marketing mix.Finding and meeting the needs of customers is the key element in a successful marketing strategy. New product development has become all the more important in the modern world characterised by technological change and market dynamics.New product development brings opportunities but also involves heavy commitment of finance, technology and even emotional attachment. New product decisions are necessary as well as costly. Many new products fail causing ruin to business firms.Product development is a continuous and dynamic function. Continuous adjustments and improvements in the product arc necessary to minimise costs of production and to maximise sales. High rate of product obsolescence requires product innovation frequently. At the same time, cost and time scales have increased. In some products, the gestation period is very long, sometimes longer than the life of the product.As a result the role of R&D expert has become very important. He needs to be in touch with sales persons and actual end users. Successful technological innovation involves great resources as well as great risks. Product innovators face spectacular successes as well as disastrous failures.Most of the new product ideas do not become actual products. Many new products achieve limited acceptance in the market. This is so because firms very often are reluctant to move away from tried and tested products.Thus, product planning is required for the following reasons:(i) To replace obsolete products;(ii) To maintain and increase the growth rate/sales revenue of the firm;(iii) To utilise spare capacity;(iv) To employ surplus funds or borrowing capacity; and(v) To diversify risks and face competition.

1. Objective of the Research

This project aims at studying the process of Product Planning and Development. Sometimes referred to as new product development, the discipline is focused on developingsystematic methods for guiding all the processes involved in getting a newproductto market.Thus broad objectives of the study includes: To know the Product Planning & Development Cycle To study the objectives and target customers To identify the customer and to know the buying preference of the customers

2. Research Methodology:Research methodology is simple framework or plan for the study that is as guide in collection and analyzing the data. It is the blue print that is followed in completes the study. Thus, good research methodology ensures the completion of project efficiency and affectivity. Since there are many aspect of research methodology, the line of action has to be chosen from the variety of alternatives, to choose the suitable method through the assessment from various alternatives. Research methodology gives the researcher an opportunity to put forward his argument for having opted for certain alternatives and also at the same time he can justify his ruling out some other possibility likes. Why research study has been undertaken, how the research problem has been formulated what data has been collected, what particular technique if analyzing the data has been used and lot of similar type question are usually answered when we talk of research problem in study.

Sample Design: 69 responsdentsSample Composition: Youth Service Class HousewivesThe details of the methodology adopted are presented below:The QuestionnaireKeeping in view the objective of the study, questionnaire was designed and tested on few employees. After getting the proper response and sanction from the concerned department the questionnaire was finalised.

PRIMARY DATA Market Survey. Personal Interview.

SECONDARY DATA

Magazines. Internet. Business Journal.

Response to QuestionnaireIn all 80 questionnaire were given to employees falling in the category of supervisors and above. Out of which 54 could be collected back duly completed. The researcher individually contacted the employees to get response on the questionnaire.Data entry and analysisIt has been an uphill task to enter the enormous data received through the questionnaire which consisted nearly 14 questions.Response to the questions, very few was valuable for study.

Review of LiteratureWhen an organization introduces a product into a market they must askthemselves a number ofquestions.

Who is the product aimed at?

What benefit will they expect?

How do they plan to position the product within the market?

What differential advantage will the product offer over theircompetitors?

We must remember that Marketing isfundamentally about providing thecorrect bundle of benefits to the end user, hence the saying Marketing is notabout providing products or services itis essentially about providingchanging benefits to the changing needs and demands of the customer(P.Tailor 7/00)Philip Kotler in Principles of Marketing deviseda very interesting conceptof benefit building with aproductFor a analysis the bookof Principles of Marketing by P.Kotler.

Kotler suggested that a product should be viewed in three levels.Level 1: Core Product. What is the core benefit your product offers?.Customers who purchase a camera are buying more then just a camera theyare purchasing memories.Level 2Actual Product: All cameras capture memories. The aim is to ensurethat your potential customers purchase your one. The strategy at this levelinvolves organizations branding, adding features and benefits to ensurethattheir product offers a differential advantage from their competitors.Level 3: Augmented product: What additional non-tangible benefits canyouoffer? Competition at this level is based around after sales service,warranties, delivery and so on. John Lewis a retail departmental store offersfree five year guarantee on purchases of their Television sets, this gives their`customers the additional benefit of peace of mind over the five years shouldtheir purchase develop a fault.

Bibliography1. Book: Product Planning Essentials Authors: Kahn,Kenneth B. Kahn2. Book: Product ManagementAuthor: Lehmann, Winer 3. Book: Marketing ManagementAuthor: Phillip Kotler4. Book: The Big Book of MarketingAuthor: Anthony G. Bennett