Quarter 2 Week 1

FUNDAMENTALS OF PRODUCT DEVELOPMENT

1. 4 STEPS IN PRODUCT DEVELOPMENT

1. Developing a product or service description
` 2. Creating a prototype
3. Testing the prototype
4. Validating the market.

2. PRODUC SERVICE DESCRIPTION simply describes how a product or service works and
how it benefits the customers. A clear product or service description is important because
this will serve as the blueprint of all business operations. Therefore, the entrepreneur has to
take note of the following regarding the product or service description:

Product
SALt's first product is a lantern based on metal-air battery technology that uses
salt water as a medium to generate electricity for lighting, targeting people at the
bottom of the pyramid.
 Therefore, the entrepreneur has to take note of the following regarding the product or
service description.
a. It should directly address the primary target market in a personal manner using
everyday language.
b. It should highlight the features that will cater the customer’s needs or address the
customer’s problems.
c. Realistic superlatives should be used for the product description. e.g “world-class
or product excellence”
3. CREATING A PROTOTYPE. A preliminary model or sample of a new product or service is
created to test a product concept or service process.

 According to Entrepreneur (www. entrepreneur.com), creating a prototype lessens

implementation/commercialization risks and provides the entrepreneur a bunch of
advantages as follows:

1. Creating a prototype enables the entrepreneur to engage in trial-and-error, provides room for
improvements, and refines the functionality of the product design or service process. It is very
expensive and risk-intensive to commercialize a product without creating a prototype..

2. Creating a prototype provides the entrepreneur a window to test the performance and
specifications of various materials and service processes. Every detail of the product or service
should be scrutinized carefully, and all flaws be addressed right away before commercialization.
3. A prototype helps the entrepreneur effectively describe the product or service to the product
team. Members of the product team include marketing, operations, engineers, suppliers,
business partners, and legal and human resources. It provides the product team the information
needed to create the right product or service as planned.
4. Creating a prototype elicits respects from key stake holders and customers. At the same
time, a prototype gives credibility to the entrepreneur. Some entrepreneurs only present vague
and big ideas but no details as to its feasibility and implementation.

 Creating a prototype is the stage where the entrepreneur can experiment, develop, and
make some improvements in the potential product or servie.
 The objective of the entrepreneur at this stage is verify if the product or service concept
will work at the simplest, fastest, and cheapest way.
 One technique for creating the best prototype is buy studying the competitor’s product or
service.
 Some entrepreneurs create a video presentation or a miniature prototype, so they will be
able to explain the details, if the product is to be viewed by a panel of specialist (e.g.,
engineers, developers, scientists.)

4. TESTING THE PROTOTYPE is the vital process before an actual product or service is
launched to the market. It will uncover the final loopholes that need to be fixed before
commercialization. For a prototype that has already been refined, testing it for the last time after
the changes have been made will validate its readiness for commercialization. Testing the
prototype is mandatory to ensure that the product or service will not fail the customers and will
deliver its definitive purpose. The following testing methods are applied by the entrepreneur:
1) Focus group discussion – The objective of the FGD is to identify errors, deficiencies,
and issues that may impede the success of the product. The participants will provide
relevant insights and provide suggestions and practical solutions on how to improve
these deficiencies.
2) Legality and ethical test – Prior to launching, the entrepreneur must ensure that the
product or service complies with all relevant laws and regulations and has a
necessary licenses or permit to operate a particular business. For example, food
products must be cleared first with the Bureau of Food and Drugs (BFAD). The
entrepreneur must also make sure that the manufacturing/production of goods or
offering of the service does not generate ethical issues such as being threats to
health, safety, and environment.
3) Safety test – The entrepreneur must ensure that the product is safe to sue, safe to
be consume (food and beverage), safe to be applied (cosmetics products). The
product should not in any way harm the customer, or put the customer in peculiar
situations. In services, the entrepreneur must ensure that the processes to be
performed by the service provided must not detrimental to the safety and health of
the customer.
4) Product costing test – The entrepreneur must examine every stage of the
manufacturing process or every process of the service blueprint to evaluate and
finalize the costs involved. This is the time when the entrepreneur can match the
expected costs versus his or her budget. Modification in the manufacturing process
or service blue print can still be made at this point to align with the cost objective of
the entrepreneur.
5) Component test – Each component of the product or service must be tested
independently to identify component failures for goods or service failures for
 services. Any failure identified must be redesigned and tested again until it becomes
fully operational and functional.
6) Competitors’ product/service test – The entrepreneur must test a similar line of
products or the competitors’ product or service itself to compare and get the best
practices to be applied to the new product or service.

5. VALIDATION OF MARKET ACCEPTABILITY is the process of finding out if the intended

primary target market will be buying the product or availing the service. It either validates or
disconfirms the perception of the entrepreneur about the suitability of the chosen primary target
market. It also test whether the value proposition and unique selling proposition are appropriate
or there’s a need to improve on them. This is also the time deeply understand the value that the
product or service brings to the customers and their perspective purchase behavior, because it
helps the entrepreneur build a more relevant and meaningful product or service. This is the last
step before the product or service can be introduced to the market.
The following objective questions are more like to be answered in the whole process of
market acceptability validation:

1) Will the primary target market like the product or service?

2) Will the primary target market buy the product or service when it is already in the
market?

These questions can easily be answered if the entrepreneur will perform the following
activities:
1) Use the most strategic marketing research tool (FGD, survey, observation, interview,
online survey, e-mail, or a combination of these research tools), wherein the
entrepreneur can get the most relevant answers in the cheapest way possible.
2) Prepare relevant open-ended questions that answer the objectives above. Do not go
around the bush and be straight to the point. Keep the questions to a minimum because
the target market might get bored and not finish the whole questionnaire.
3) Find market experts who also target the same market but are not directly competing
with the entrepreneur.
4) Collate all the data, analyze them, and prepare a summative report that answers the
objective questions that were mentioned earlier.