Download - Marketing & Sales Roundtable Pragmatic (Start-Up) Product Planning May 2004

Marketing & Sales Roundtable

Pragmatic (Start-Up) Product Planning

May 2004

2©2004 Arrington, Burke, Remacle

Agenda – Pragmatic Product Planning

Definitions Benefits and Issues Inputs Top 10 List Appendix

Sample MRD


ProductLifecycle

Product Management


Product Planning Hierarchy

RoadmapRoadmap

Product PlanProduct Plan

NPP1NPP1NPP2NPP2 NPPE1NPPE1 NPS4NPS4

Gatekeepers = Executive Committee

Gate #1

MRDMRD PRDPRD EngineeringSpec

EngineeringSpec

Plan of Record (POR)

Plan of Record (POR) Launch PlanLaunch Plan

Gate #2 Gate #3 Gate #4


Product PlanningProduct Planning

Early Customer

Buy-in

Lower CostDevelopment,Fewer Revs

Risk Analysis,Mitigation

Faster Time to

Market and Revenue

BOD, Executive Team

AlignmentClear

Direction to Development

Team

Total Product Planning Issues


Product Planning Process Issues

How to instill structure and process in the product planning function without introducing bureaucracy?

How to get sales input without handing over control? How to balance customer-specific requests with market and competitive

input? How to give the detail needed for product development without developing

a full functional spec? How to limit the number of releases to match development and marketing

resource constraints? How to mitigate product slips? How to manage internal buy-in and approvals? How to reset expectations

due to dynamic requirements/changes and slippage? How to ensure product planning is part of strategic roadmap? How to develop a product with an offshore team involved?


Research Sources and Uses

Corporate Positioning

Process

Corporate Positioning

ProcessNew Product

Planning ProcessNew Product

Planning ProcessLifecycle

Management (Financial Modeling)

Lifecycle Management

(Financial Modeling)Product StrategyProduct Strategy

MarketingProduct Management

Customer Sat Channel calls Shows/Events Reg base, key

accounts Lost accounts

Customer Sat Channel calls Shows/Events Reg base, key

accounts Lost accounts

Annual Summit WW Channel,

Customer Advisory Boards

Annual Summit WW Channel,

Customer Advisory Boards

Trade magazines Lab analysis Web ‘Crush’

Trade magazines Lab analysis Web ‘Crush’

Supplier visits Technology

Advisory Board

Supplier visits Technology

Advisory Board

Market analysts (IDC, Gartner, etc.)

Financial analysts International?

Market analysts (IDC, Gartner, etc.)

Financial analysts International?

Custom Surveys

Qualitative Feedback

Competitive EmergingTechnologies

Subscription Market Research


Product Planning: Top 10 List

#10: Segmentation (market and customer) and product roadmap are the foundations of product planning Becomes filter for all product concept and feature requests

#9:Qualitative research with opinion-leading customers in target customer segment is most important research component Once identified and tested, build relationships for alpha input, beta

program and ongoing advisory

#8:Market and competitive research complete the requirements, competitive and financial picture Qualitative input from analysts, competitors, industry associations,

customer councils, advisors, gurus, historical/analogue trends, etc. Structured, time-limited process for input from sales, SEs/FAEs,

executives


Product Planning: Top 10 List (cont’d)

#7:Product manager, VP marketing own the product planning process With ‘meeting of the minds’, and formal approval process with

engineering and sales VPs, CEO, founders and a defined cross-functional team

#6: Detailed financial model must substantiate business opportunity:BOM, development budget, sales forecasts by quarter, lifecycle pricing , discounts, marketing budget, etc.

#5:Two major releases/new products annually Develop a theme/concept/name for releases with feature

groups that address/anticipate specific market needs – not ‘bug fixes’


Product Planning: Top 10 List (cont’d)

#4:Establish ‘total product’ features as market requirements for release Support plan, partner/channel strategies must be executed in

parallel with development

#3:Define clear executive (board?) review and approval process Formal presentation and sign-off, with regular reviews as

dictated by risk assessment, development progress and market dynamics

#2:Include launch strategy, plan outline, budget to engage development team and reinforce delivery expectations Go/no go dates for key launch expenditures and events


#1: Product Planning is a Contact Sport!


Summary

It’s not necessary to turn product planning into a bureaucratic process, but

It does need to be built upon customer segment requirements

Higher probability that you’ll get the product right, the first time


Appendix


Sample MRD Outline

Preface - The development of a Market Requirements Document (MRD) is a critical first step in any new product planning effort. The MRD provides a business view of the market requirements and environment. It also serves as the foundation for the creation of detailed product requirements/engineering specifications, and the starting point for release and launch planning.

The MRD in the Product Planning Process

MRDMRD PRDPRDEngineering SpecEngineering Spec

Plan of Record (POR)Plan of Record (POR)

Release (Launch) PlanRelease (Launch) Plan


Sample MRD Outline

When to Create/Refine an MRD New product planning Product enhancement or extension planningObjectives and Uses of an MRD Confirm market/customer need and opportunity Ensure product strategy development and refinement is market- and customer-driven Evaluate potential business model options and opportunity for ROI Identify potential partner categories and requirements in timely way Understand barriers and risks Product reviews (review and refine MRD assumptions on quarterly basis) Allocate resourcesRisks of Not Producing an MRD Technology risk

Technology won’t work as envisioned Key component not available

Product risk Wrong product Wrong price point

Market risk No market – ‘technology looking for problem’ Established market – ‘me too product’ facing entrenched competition Unattractive market – not big enough to be interesting

Business risk Too expensive to develop (time and $$) Not profitable to manufacture and sell


Sample MRD OutlineMRD Outline

I. Product Overview

This section of the MRD introduces the product concept and structure. Also outlined here are assumptions regarding key requirements, release schedule and potential risks and dependencies.

A. Product description (high-level)

1. Market category

a. What is it (Component/SW/HW/System, usage)?

b. Where does it fit in the market (per industry/market analysts’ schema)?

c. Product category name (e.g. PC, PDA, Infrastructure SW)

2. Architecture/Core structure

a. Component – block diagram

b. HW – processor, OS, storage, NW, etc.

c. SW - server, client, modules

d. System – HW, SW, NW, etc.

3. Key features and capabilities

B. Problem addressed and benefits provided by the product (prioritized in order of importance to customers)

C. Value proposition

D. Other market requirements identified but not essential to this rev

E. Product release schedule

1. Alpha

2. Beta

3. Release (general availability)

F. Risks and dependencies

1. Technology – development feasibility, component availability

2. Product - performance

3. Market – timing, competition, etc.


Sample MRD Outline

II. Product Strategy

A. Strategic goals/objectives for the product

1. Role of product in the company’s strategy

2. Financial goals

B. Market vision Why is this product important to potential customers now and in the future? Why can it be the basis for a sustainable company

versus just a point product?

1. Market trends/drivers

2. Technology enablers

3. Market segment problem being addressed by the product

C. Targeted market(s)

1. Market segment – Who has the problem being addressed (broadly), and the most critical need to get it fixed?

2. Market segment development roadmap – potential customer segments (prioritized to the extent possible)

a. Critical need drivers – ‘must-haves’ versus ‘nice to haves’

b. Sample usage scenarios

i. Current solution(s) to the problem outlined in B-3 and their deficiencies

ii. Priority requirements - table stakes – e.g. standards support, integrate-ability, performance, etc.)

iii. Barriers to adoption – for all participants in the product category, and those specific to company

3. Market size and growth rates (3-5 year CAGRs) – See Appendix A for definitions

a. Total Available Market (TAM)

b. Served Available Market (SAM)

D. Competitive Landscape

II. Primary competitor categories (direct/indirect, current/future) – strengths and weaknesses

III. Company/product differentiation against each competitor category


Sample MRD Outline

II. Product Strategy - Cont’d

E. Partnership strategy by category type

1. Technology

2. Product

3. Marketing

4. Sales/distribution

5. Other?

III. Marketing Planning Assumptions

1. Communications strategy

a. High-level message model - key points related to market, technology, product, company

b. Market leverage model – categorization of market influencers and strategy for reaching them

2. Beta program

a. Objectives

b. Criteria to select beta customers

c. How many and what type

d. Duration and management of program

3. Launch strategy (Objectives and key milestone - detailed plan comes later)

4. Sales channel strategy (role of direct versus indirect)

5. International strategy – what, if any markets will be addressed in the first release


Sample MRD Outline

IV. Product Requirements

This section outlines product development priorities in more detail, and includes preliminary assumptions regarding future releases and/or product extensions. In the event that the company’s product planning process does not include the creation of a PRD, this section is used as the foundation for the development of engineering specifications.

A. Priority 1 features and capabilities (identify which are mandatory for first release) *See Appendix B for sample list of key elements to be addressed in core product and in support of the product.

B. Priority 2 features and capabilities (highly desirable but may not be committed to yet)C. Future requirements (may be included in future releases but not committed to at this point)D. Features that will not be implemented (with explanation of why)E. End-of-life strategy/plan

V. Financials

This section should demonstrate that the company has thought through the key financial considerations and include an Excel model demonstrating an attractive business opportunity given estimated (best guess) revenue assumptions and development, manufacturing, sales and marketing costs.

A. Bill of materials (preliminary make or buy assumptions for key components)B. Development budgetC. Customer adoption scenarios (how many, over what period of time)D. Business model/pricing assumptions (over time)

1. License versus subscription/hosted pricing2. System versus component (HW/SW/Service) pricing

E. Sales process1. Revenue targets and discount structures by channel2. Sales cycles

F. Marketing budget


Sample MRD Outline

VI. Cross-Functional Project Team (Roles, Responsibilities, Timeframe, Point Person)

The product planning process should involve representatives of most functional areas/departments. This section should outline the roles and responsibilities of each department, identify a departmental point person and highlight the points at which his or her input/involvement are required.

A. Development/Engineering

B. Marketing

C. Support

D. Operations

E. Sales

F. Legal

G. International Approvals and Certifications


Sample MRD Outline

PLANNING TOOL ROLE

New Product Planning Process Phased approach for managing the development of a new product that reflects stated corporate (and product line) strategies

Market Requirements Document

(MRD)

Business view of market requirements and environment, summarizing segmentation strategy, competitive landscape, total product composition and business model/potential ROI. Source of initial product plan business assumptions

Product Requirements Document

(PRD)

Definition of features, functions, technical specifications for an individual product of family of products. Basis for development of engineering specifications

Engineering Spec Detailed engineering specifications based on MRD/PRD inputs. Core of development plan

Plan of Record (POR) Detailed summary of product development activities, schedule and key milestones, including Beta – Engineering/Manufacturing

Release (Launch) Plan Plan for product release detailing activities, schedule, roles, responsibilities and costs – Engineering/Manufacturing-oriented

Launch Plan Marketing plan for product launch detailing activities, schedule, roles, responsibilities and costs

Product Roadmap Outlines medium to long-term product platform strategy and response to market vision (trends/drivers/enablers). Provides explanation of rationale for product evolution relative to target market segments.

Total Available Market (TAM) Total units/$ available at all potential customer companies for relevant categories of products/services and applications. Top-down approach using market forecast data

Served Available Market (SAM) 100% of the units/$ available from addressable customer companies for addressable percentages of applications that company can serve. Should reflect company’s technical capability, market rate of adoption of technology, geographic reach, target market segment, etc.

Appendix A - Glossary of New Product Planning Terms


Sample MRD Outline

Appendix B – Sample List of Features/Capabilities* Sample list of elements to be addressed and prioritized in development and communications plans (What are table stakes/must haves? What are differentiators?)

Core product features/functions Product performance metrics (relative improvements), dependencies Uptime and QoS Regulatory certifications and adherence to standards (e.g. platforms and

protocols supported) Compatibility/interoperability (backward and forward) requirements and testing Bugs/fix requirements Internationalization (e.g. Unicode-enabled) Documentation requirements and plan (users, developers, etc.) Next generation architectural changes Environmental (e.g. ISO 1400, recycling, etc) Maintenance and technical support requirements


Presenters

Liz Arrington, Consultant

Market Focus

650-329-0823

[email protected] Patty Burke, Consultant

Market Focus

[email protected]

408-398-4921 Rosemary Remacle, Consultant

Market Focus

408-244-0412

[email protected]

Download - Marketing & Sales Roundtable Pragmatic (Start-Up) Product Planning May 2004

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