Product planning is the starting point of over-all marketing programme. It is a very wide activity. It involves the innovation of new products, improvement in existing products, adding new products to the product line of dropping the uneconomic products from the product line. Karl H. Tietgen has defined Product planning as follows:
Product planning is the act of making out and supervising the search, screening development and commercialization of new products, the modification of existing tines and the discontinuance of marginal or unprofitable items.
This definition brings out the following aspects of product planning
(i) Deciding about the production of various products,
(ii) Increase or decrease in product line.
(iii) Improvement in existing products.
(iv) Discontinuance of unprofitable products.
(v) Product innovations.
Product planning and product line planning both terms are used simultaneously. It is also known as Merchandising. It includes contraction or simplification of the product line as well. Basically, product planning is the responsibility of the chief executive/marketing director of the concern. It is a team activity and a link in development of a product for management. Importance of Product Planning in Marketing
Importance of Product Planning in Marketing Management
The above mentioned quotation brings out the importance of product planning in the marketing programme. It is almost a must for healthy growth in any competitive economy. In fact, product development and innovation is frequently demanded to help develop new products, improve old ones and keep abreast of competition. To day, a well conceived plan of industrial research is characteristic of forward-looking management.
It clearly indicates management’s faith in the future and its desire to provide better products to meet changing consumer needs. Maintaining a status quo is seldom enough in our economy. No matter how smoothly a firm is operating, it is almost a certainty that the day will come when research will be needed to solve some problem to overcome some difficulty, to develop a new product, or to improve an existing design.
Product planning pays dividends in the form of better competitive positions and bigger profits. It is necessary to exist in the market and to Continue to prosper by offering new and improved products developed through continuous industrial research.