We introduce crowded field integral field (3D) spectrophotometry as a useful technique for the study of resolved stellar populations in nearby galaxies. As a methodological test, we present a pilot study with selected extragalactic planetary nebulae (XPN) in the bulge of M31, demonstrating how 3D spectroscopy is able to improve the limited accuracy of background subtraction which one would normally obtain with classical slit spectroscopy. It is shown that due to the absence of slit effects, 3D is a most suitable technique for spectrophometry. We present spectra and line intensities for 5 XPN in M31, obtained with the MPFS instrument at the Russian 6m BTA, INTEGRAL at the WHT, and with PMAS at the Calar Alto 3.5m Telescope. Using 3D spectra of bright standard stars, we demonstrate that the PSF is sampled with high accuracy, providing a centroiding precision at the milli-arcsec level. Crowded field 3D spectrophotometry and the use of PSF fitting techniques is suggested as the method of choice for a number of similar observational problems, including luminous stars in nearby galaxies, supernovae, QSO host galaxies, gravitationally lensed QSOs, and others.