The marketing is responsible for finding the needs and wants of the end-user or customer. The marketing department prepares the Marketing Requirement Document (MRD) while doing market research on the latest trends in the market, what customers are choosing, what customers are willing to pay, what are the users requirements, classification of requirements. The output of these marketing efforts will be MRD, which will act as inputs to Product Requirement Document (PRD).
The engineering management team then takes the MRD and breaks down the functionality requirements such as needs and wants to specification and tasks. They further breakdown the tasks into components and use the project management methodology to assign resources to each task, calculate the hours required for each of the tasks and come up with a schedule and budget for the project. The engineering management typically follows one of the project management life cycles to get the budget and schedule.
Irrespective of the cycle they use, they typically do the following steps to perform the project:
This PRD with the budget and schedule information is then checked with the marketing department to ensure that there is no miscommunication. The marketing will also evaluate the cost of the project and hence the final price of the product there by reassuring the ROI on investment, the number of products that they feel can be sold, etc.
The inputs of PRD, MRD and Return on Investment analysis is fed to the senior management for their approval of product design and budget approval. If the budget is approved then the project is started immediately with same specification. If there is a cut in budget/ schedule then the engineering management contacts the marketing in prioritizing the requirements. Typically they will find out the minimum requirements that are needed to make a first significant sale, and then build functionality in modular structure based on the budget and schedule availability.
During the development life cycle it is possible that due to customer engagements in the form of alpha or beta testing, they might come up with new requirement or functionality. This will then follow a change control process where this functionality is fed to engineering management for analysis, design, implementation, and test cycles. Estimation of budget, resources, and schedules is reworked and fed to senior management for their approval.