In common term the word “product” is used to refer to the physical or tangible attributes of a product. But in marketing terminology, a product is a mixture of tangible & intangible attributes which are capable of being exchanged for a value, with ability to satisfy customer needs. Thus, a product may be defined as anything that also include service, ideas, person and place in the concept of product that can be offered to a market to satisfy a want or need. Whereas, from the customers point of view, a product is a bundle of utilities, which is purchased because of its capability to provide satisfaction of certain need. There can be three types of benefits a customer may seek to satisfy from the purchase of the product such as:

i) Functional benefits

ii) Psychological benefits

iii) Social benefits

Thus, all this aspect should be considered while planning for a product.

Product planning requires an understanding of corporate and divisional strategic goals. The product manager has to understand the role his or her product play in the long term vision that have some implicit (or explicit) statement of the future “picture” of the company and its product offerings. The product manager must also know what new markets, new technologies and new directions should be incorporated into the long term product plan. He/she must ask himself/herself that how will the customers of tomorrow be different from the customers of today, whatproduct/ service will these customers expect? The emphasis, here is on trying to understand how the future will be different from the present and the impact that will have on present planning. So the product planning process involves following stages:

1) Fostering a customer mindset

2) Understanding past successes and failures

3) Developing product ideas

4) Targeting current, tangential and new markets.

1) Fostering a customer’s mindset:

Fostering a customer’s mindset requires the product manager to step back and redefine the business in terms of customer’s functions.

2) Understanding past successes and failures:

In this a product manager need to evaluate the performance of the product. He/she needs to compare successful product launches with unsuccessful ones. He/she also need to analyze what were the common elements of successful development efforts that were different from unsuccessful ones.

3) Developing product ideas:

The product managers are always under pressure to generate new products quickly. Because they also juggle existing product at the same time they do not allow themselves the luxury of thoroughly examining all alternatives. That is why; developing new ideas can be a useful prelude to product development.

4) Targeting current, tangential and new markets:

Products can have varying levels of risk and it is usually wise to have a portfolio of new products to balance the risk/return equation.