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

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  • Marketing & Sales Roundtable

    Pragmatic (Start-Up) Product Planning

    May 2004

    2004 Arrington, Burke, Remacle

    Agenda Pragmatic Product Planning DefinitionsBenefits and IssuesInputsTop 10 ListAppendixSample MRD

    2004 Arrington, Burke, Remacle

    Product Management Product Lifecycle

    2004 Arrington, Burke, Remacle

    Product Planning HierarchyRoadmapProduct PlanGatekeepers = Executive CommitteeGate #1MRDPRDEngineering SpecPlan of Record (POR)Launch PlanGate #2Gate #3Gate #4

    2004 Arrington, Burke, Remacle

    Total Product Planning Issues

    2004 Arrington, Burke, Remacle

    Product Planning Process IssuesHow 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?

    2004 Arrington, Burke, Remacle

    Research Sources and UsesCorporate Positioning ProcessNew Product Planning ProcessLifecycle Management (Financial Modeling)Product StrategyMarketingProduct ManagementCustomer SatChannel callsShows/EventsReg base, key accountsLost accountsAnnual SummitWW Channel, Customer Advisory BoardsTrade magazinesLab analysisWebCrushSupplier visitsTechnology Advisory BoardMarket analysts (IDC, Gartner, etc.)Financial analystsInternational?

    Custom SurveysQualitative FeedbackCompetitiveEmerging TechnologiesSubscription Market Research

    2004 Arrington, Burke, Remacle

    Product Planning: Top 10 List#10:Segmentation (market and customer) and product roadmap are the foundations of product planningBecomes filter for all product concept and feature requests#9:Qualitative research with opinion-leading customers in target customer segment is most important research componentOnce identified and tested, build relationships for alpha input, beta program and ongoing advisory#8:Market and competitive research complete the requirements, competitive and financial pictureQualitative 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

    2004 Arrington, Burke, Remacle

    Product Planning: Top 10 List (contd)#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 annuallyDevelop a theme/concept/name for releases with feature groups that address/anticipate specific market needs not bug fixes

    2004 Arrington, Burke, Remacle

    Product Planning: Top 10 List (contd)#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 processFormal 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

    2004 Arrington, Burke, Remacle

    #1: Product Planning is a Contact Sport!

    2004 Arrington, Burke, Remacle

    SummaryIts not necessary to turn product planning into a bureaucratic process, but It does need to be built upon customer segment requirementsHigher probability that youll get the product right, the first time

    2004 Arrington, Burke, Remacle

    Appendix

    2004 Arrington, Burke, Remacle

    Sample MRD OutlinePreface - 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

    MRD

    PRDEngineering SpecPlan of Record (POR)Release (Launch) Plan

    2004 Arrington, Burke, Remacle

    Sample MRD Outline When to Create/Refine an MRDNew product planningProduct enhancement or extension planningObjectives and Uses of an MRDConfirm market/customer need and opportunityEnsure product strategy development and refinement is market- and customer-drivenEvaluate potential business model options and opportunity for ROIIdentify potential partner categories and requirements in timely wayUnderstand barriers and risksProduct reviews (review and refine MRD assumptions on quarterly basis)Allocate resourcesRisks of Not Producing an MRDTechnology riskTechnology wont work as envisionedKey component not availableProduct riskWrong productWrong price pointMarket risk No market technology looking for problemEstablished market me too product facing entrenched competition Unattractive market not big enough to be interesting Business riskToo expensive to develop (time and $$)Not profitable to manufacture and sell

    2004 Arrington, Burke, Remacle

    Sample MRD OutlineMRD OutlineProduct OverviewThis 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. Product description (high-level) Market category What is it (Component/SW/HW/System, usage)?Where does it fit in the market (per industry/market analysts schema)? Product category name (e.g. PC, PDA, Infrastructure SW)Architecture/Core structureComponent block diagramHW processor, OS, storage, NW, etc.SW - server, client, modulesSystem HW, SW, NW, etc.Key features and capabilitiesProblem addressed and benefits provided by the product (prioritized in order of importance to customers)Value propositionOther market requirements identified but not essential to this revProduct release scheduleAlphaBetaRelease (general availability)Risks and dependencies Technology development feasibility, component availabilityProduct - performanceMarket timing, competition, etc.

    2004 Arrington, Burke, Remacle

    Sample MRD Outline

    Product Strategy Strategic goals/objectives for the product Role of product in the companys strategyFinancial goalsMarket 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?Market trends/driversTechnology enablersMarket segment problem being addressed by the productTargeted market(s)Market segment Who has the problem being addressed (broadly), and the most critical need to get it fixed?Market segment development roadmap potential customer segments (prioritized to the extent possible)Critical need drivers must-haves versus nice to havesSample usage scenariosCurrent solution(s) to the problem outlined in B-3 and their deficienciesPriority requirements - table stakes e.g. standards support, integrate-ability, performance, etc.)Barriers to adoption for all participants in the product category, and those specific to companyMarket size and growth rates (3-5 year CAGRs) See Appendix A for definitionsTotal Available Market (TAM) Served Available Market (SAM)Competitive LandscapePrimary competitor categories (direct/indirect, current/future) strengths and weaknessesCompany/product differentiation against each competitor category

    2004 Arrington, Burke, Remacle

    Sample MRD OutlineProduct Strategy - Contd

    Partnership strategy by category typeTechnologyProductMarketingSales/distributionOther?

    Marketing Planning Assumptions Communications strategy High-level message model - key points related to market, technology, product, companyMarket leverage model categorization of market influencers and strategy for reaching them Beta programObjectives Criteria to select beta customersHow many and what typeDuration and management of programLaunch strategy (Objectives and key milestone - detailed plan comes later)Sales channel strategy (role of direct versus indirect)International strategy what, if any markets will be addressed in the first release

    2004 Arrington, Burke, Remacle

    Sample MRD OutlineProduct 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 companys product planning process does not include the creation of a PRD, this section is used as the foundation for the development of engineering specifications.

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

    Financials This section should demonstrate that the company has thought through the key financial considerations and include an Excel model demonstrating a