If you’ve ever watched Dragon’s Den (or The Tigers of Money as the original Japanese show was named), then you’ll know that all great inventions have a backstory.
Each contestant pitches their idea to a panel of investors following a tried-and-tested format. They begin with a problem, explain why their invention is the solution, then set out how they’ll develop, produce and distribute their product, hopefully earning piles of cash for themselves and the ‘dragons’ in the process. This is essentially what product planning is all about, and it’s an essential part of launching a new idea.
What is product planning?
Product planning (not to be confused with product discovery) is the process that guides a product or service from that first lightbulb moment to its big market launch. It includes defining the following things:
- The product itself
- Its unique selling proposition (USP)
- Its target market
- Its pricing strategy
- Key marketing channels
But it doesn’t stop there! Product planning also involves post-launch analysis, customer feedback, and potential modifications or improvements.
If you’re thinking that seems like a lot, you’re right. Product planning is a detailed, ongoing process that requires consistent monitoring. But it’s also a really rewarding part of product development because you see those raw ideas transform into a tangible plan.
The difference between a product plan and a go-to-market plan
In the world of product development, two distinct but related terms exist: the product plan and the go-to-market (GTM) plan. They sound like they’d cover similar ground, but there are differences between the two you need to know.
What is a product plan?
A product plan outlines the course of action for the development of a product, from ideation to launch. It includes a thorough description of the product’s purpose, key features, and unique selling proposition (USP). It also identifies the target audience and describes your product positioning and promotion plans.
Think of it this way: your product plan covers the ‘what’, ‘why’, and ‘how’ of your product: what it is, why it exists, and how you’ll make it a reality. Its raison d’etre is to help all stakeholders, including developers, designers, and marketers, pull in the same direction.
A go-to-market (GTM) plan, on the other hand, sets out how you’ll launch a product or service and market it to customers.
It focuses on strategies and tactics for grabbing your customers’ attention and gaining a bigger market share. It also covers pricing, distribution channels, customer segmentation, communication strategies, and sales plans.
While the product plan answers the ‘what’, ‘why’, and ‘how’ of your product, the GTM plan answers the ‘who’, ‘where’, ‘when’, and ‘how’ of reaching your audience. The goal is to help your product make a splash in the market by reaching the right people at the right place and time.
Product planning or go-to-market planning?
Which one will you need? The short answer? Both! But you’ll need them at different times for different things. Here’s what each document helps you accomplish:
- Product conceptualization: What market need does your product address, and what’s the basic idea?
- Market research: What does the market landscape look like, who are you up against, and who are your customers?
- Product definition: What makes your product stand out from the crowd?
- Product development strategy: What’s your plan for creating the product, including tech requirements, resources, and timelines?
- Product positioning: How does your product fit into the wider market?
- Pricing strategy: What’s your pricing model based on production costs and perceived value?
- Marketing and sales strategy: How will you promote your product and sell it to your target audience?
- Customer feedback and product iteration: How will you gather feedback and make necessary adjustments to improve?
- Customer segmentation: Who are the groups of people that will be your target customers?
- Value proposition: What is the unique value your product provides?
- Distribution channels: Facebook? TikTok? Billboards? How will you get your message out, and where?
- Communication and marketing strategy: How will you generate buzz, including advertising, PR, content marketing, and social media?
- Sales strategy: What’s the sales process, including the methods (e.g., direct, indirect, online) and any needed sales tools or training?
- Pricing and positioning strategy: What’s the final price of your product, and how will you position it in the market?
- Launch plan: What are the key activities and timelines leading up to the product launch?
- Post-launch evaluation: How will you measure the launch’s success, gather feedback, and make adjustments as needed?
Product planning example
Sometimes, the best way to truly ‘get’ a concept is to see it in action. Here’s an example of product planning using an imaginary tech startup.
Product conceptualization: The founders spot a market need: consumers want a more efficient way to manage their smart home devices. The idea is a unified smart home device that can control all other connected devices.
Market research: The company investigates the smart home market landscape. Who are the big hitters? What are some popular products? Who are the customers and what are their problems? They discover that while there are tons of smart devices on the market, there’s a gap for something that unifies control over all other devices.
Product definition: The company defines the product: a sleek, voice-controlled device that can interface with all existing smart home devices, regardless of the manufacturer, simplifying control for the user. Its USP is universal compatibility and ease of use.
Product development strategy: The team decides on a product development timeline, the tech required, and how to allocate resources. They take into account both hardware and software aspects, considering how to make the device compatible with a range of existing smart home technologies.
Product positioning: They decide to position their product as the ultimate smart home controller, targeting tech-savvy homeowners who value convenience and simplicity.
Pricing strategy: After tallying up the cost of production, market trends, and the perceived value of their product, they decide on a pricing strategy that balances profitability with affordability for their target market.
Marketing and sales strategy: The startup plans to promote their product through online ads, tech blogs, and social media influencers in the smart home space. They decide to sell directly to consumers through their website and via online marketplaces like Amazon.
Customer feedback and product iteration: Post-launch, they plan to actively seek customer feedback through surveys and online reviews. They’ll use this feedback to continually update and improve the product, keeping their offering fresh and responsive to customer needs.
What product planning isn’t
Common misconceptions about product planning can lead to pitfalls that could undermine your entire process. Let’s separate fact from fiction.
Product planning isn’t a one-time event
Product planning isn’t a box you tick off your checklist and then forget. It’s an ongoing, continuous process that lasts throughout the lifespan of your product.
Product planning isn’t just about the product
While the product does indeed sit at the heart of product planning, it’s not the only thing that matters. Product planning is about getting to know your customers, your competition, and your own business objectives and understanding how these three things interact. It’s also about positioning, pricing, and promotion, and making the decisions that help your product not just exist but thrive.
Product planning isn’t a solo endeavor
It’s not the sole responsibility of a single person or department. It’s a collaborative effort that involves different teams within an organization, including product development, marketing, sales, customer service, and finance, plus internal and external stakeholders
Product planning isn’t guesswork
Product planning isn’t about making arbitrary decisions based on hunches or assumptions. It’s a strategic, data-driven process. It involves running market research, understanding customer needs and behavior, analyzing competition, and making smart decisions based on that data.
Product planning isn’t an excuse to continually shift goals
While flexibility is important, it shouldn’t be used as a pretext to continuously change goals without justified cause. Consistent goalposts give the team a sense of direction and purpose. Regular shifts can cause confusion, disrupt momentum, and impact the overall product development process.
Product planning isn’t an outline of every feature and function
A product plan does offer a broad roadmap for your product, but it’s not intended to be a highly detailed spec document that outlines every single feature and function. It focuses more on the strategic ‘why’ and ‘what’, rather than the granular ‘how’.
Why is product planning essential for your product team?
It’s a lot of work, but is it really worth it? Yes! Here’s why:
It keeps the team focused
Your product plan is like a North Star, guiding everyone from stakeholders to interns to CEOs toward a successful launch. Keeping everyone aligned lowers the chance of misunderstandings, improves collaboration, and enhances overall efficiency.
It guides decision-making
Product planning offers a strategic framework that guides decision-making throughout the product lifecycle. When faced with a tough call — like whether to add a new feature or how to prioritize development tasks — referencing the product plan can help you make choices that align with your goals.
It helps you manage risks
Product planning involves deep market research and careful analysis of your target audience and competition. This process helps you locate potential risks and challenges, which helps you develop strategies to mitigate them before they become problematic.
It focuses your efforts
Without a clear plan with goals and milestones, it’s easy for teams to get caught up in the minutiae and lose sight of the bigger picture. A product plan helps keep everyone focused on what really matters — developing a product that hits the market bullseye.
It drives success
Perhaps most importantly, a well-written product plan sets the stage for a successful launch. It guides development, ensuring you have a final product that your customers actually want. It also helps you craft an effective marketing strategy, as well as a roadmap for achieving your goals. In short, product planning doesn’t just increase the chances of your product being successful — it actively drives that success.
How to create a product plan: A step-by-step guide
Now it’s time to get down to the nuts and bolts. Here’s a step-by-step guide to creating a stellar product plan.
Step 1: Do market research
Begin by understanding your market. Identify your target customers and understand their needs and wants. Suss out the competition: what products do they offer, and how can your product differentiate itself? What are the current and upcoming trends in your industry? Gathering this information will give you a well-rounded view of the landscape and help you spy opportunities.
Step 2: Define your product
Based on your market research, set out exactly what your product does in the context of those who will use it. What problem does it solve, or need does it fulfill? What are its key features? How will it deliver value to your target customers? Clearly articulate your product’s USP.
Step 3: Set clear objectives and goals
Set clear, specific, and measurable objectives and goals. These could relate to revenue, number of units sold, market share, customer satisfaction, or other relevant metrics. Oh, and remember to make these goals SMART — Specific, Measurable, Achievable, Relevant, and Time-bound.
Step 4: Develop your strategy
Now, think about how you’ll achieve your goals. Outline your product development process, including timelines and a list of the resources you’ll need. Develop your pricing strategy, thinking about production costs, competitor pricing, and your target customers’ willingness to pay. Plan your marketing and sales strategies — how will you reach your audience and show them you’re just what they need?
Step 5: Create your go-to-market plan
Develop a detailed plan for launching your product to the market. This should include strategies for drumming up awareness, like PR, content marketing, and social media campaigns. It could also include attending conferences, handing out free samples, or collaborating with other brands.
Plan your distribution strategy — how will your customers buy your product? Also, consider your sales strategy, which could involve direct sales, selling through partners, online sales, and so on.
Step 6: Plan for evaluation and iteration
Lastly, create a plan for evaluating your product’s performance. Define which product metrics you’ll track, how to gather customer feedback, and how often you’ll review and update your plan. Remember, product planning is a dynamic process — your plan should be flexible enough to adapt to changes and new information, because you’ll be using your results to fine-tune your process.
5 common mistakes in product planning
Even with the best planning, mistakes happen. The good news is most of these can be avoided once you know what to look out for. Let’s review five common pitfalls.
1. Neglecting market research
If you don’t know your market, how do you expect to reach them, let alone offer something different and better than what’s already out there?
How to avoid it: Spend time getting under the skin of your customers. Learn their needs and desires, their behaviors, and the competitive landscape. Use surveys, interviews, focus groups, and secondary research to understand what drives them.
2. Undefined goals and objectives
If your goals and objectives aren’t clear, it’s tricky to know whether your product is successful or if it’s on the right track during the development phase.
How to avoid it: Set SMART goals that align with your business objectives. Review and adjust these goals as you go to stay on top.
3. Poor (or no) cross-functional collaboration
Product planning isn’t just a task for the product team — it involves input from various departments, including sales, marketing, customer service, and finance. Without it, silos form.
How to avoid it: Foster a culture of collaboration within your organization. Include representatives from different departments in your product planning process, and encourage regular communication and feedback.
4. Ignoring customer feedback
Ignoring feedback is a surefire way to develop a product that doesn’t meet their needs.
How to avoid it: Make customer feedback a central part of your product planning process. Use surveys, interviews, social media listening, and other feedback tools to gather insights and use these insights to shape your product. And remember not to take bad reviews personally!
5. Inflexible planning
While it’s important to have a detailed product plan, being too rigid can prevent you from adapting to changes or new information.
How to avoid it: Remember that your product plan is a living document. It should be revisited and revised regularly as new data and customer feedback comes in, and as the market shifts. Being flexible and adaptable is key to successful product planning and building a continuous improvement culture in your team.
How diagramming tools can help you
Diagramming tools can help you map out your product strategy in a visual format, making it easier to understand, whatever your skill level or discipline. Whether it’s a simple flowchart showing your development process, or a complex diagram illustrating your go-to-market strategy, visuals can make complex ideas more digestible and actionable.
With diagramming tools, you can:
- Create customer and user journey maps
- Facilitate brainstorming and ideation
- Promote collaboration
- Track progress and adjust plans
When multiple teams are involved in product planning, clear communication is a must. Diagramming tools offer a shared visual language that everyone can understand and also support real-time collaboration, helping teams work together regardless of location. Give Cacoo a try today.