Entrepreneurship w1 Finals

Entrepreneurship – week1 – finals
Before commercializing a new product or service, the entrepreneur must focus first on refining
the product or service and validate its market acceptability. This new product does not have to be a
totally new product. It can be a new product line from the existing business of the entrepreneur, a
product line extension, an enhancement, or a repositioning of an existing product.
• Product development is the creation of a new or different product that offers new benefits to
the customers. This includes both the creation of an entirely new product and modifications to
an existing product.
• It is composed of four steps: (1) developing a product/ service description, (2) creating a
prototype, (3) testing the prototype, and (4) validating the market.
PRODUCT OR SERVICE DESCRIPTION
A product or service description simply describes how a product or service works and how it
benefits the customers.
Having said so, it is a structured format of presenting information about a good/ service to
convey durability, craftsmanship, superiority, etc.
For example, consumer goods, such as food, usually present their description at the back of
the packaging. Other brands also opt to include a table for nutrition facts, list of ingredients, and
cooking instructions. For services, its description is presented in a way that customers or clients of
salons, spa, clinics, schools, hotels, transportation, and other servicing businesses get a glimpse of
the service that they would be availing. Service description provides customers and clients what to
anticipate/ expect/ look forward from the said provider. Consider the body essential product you have
brought from our activity. Were you able to look into its product description? Nice one! You may also
look at the examples mentioned earlier.
Product or service description is indeed another tool for the entrepreneur to look into. By
conveying comprehensively, the entrepreneur’s product or service description, it is a way to know if
indeed his or her product or service is superior to the competitors. Let’s move forward boss, shall we?
The entrepreneur has to take note of the following regarding product/ service description:
• It should directly address the primary target market in a personal manner using everyday
language. – Meaning to say, the entrepreneur must put himself/ herself in the customer’s
shoes, where the product/ service description will be addressed so that the said product/
service description can connect effectively to the customer. Let your personality shine through
your content and add a dash of humor.
• It should highlight the features that will cater to the customer’s needs or cater to the customer’s
problems. – A customer is more interested in what a product does for him/her than what the
product is. Entrepreneurs must communicate the benefits one can get from the said product/
service.
• Realistic superlatives should be used for the product/ service description. The product/ service
description must be factual. Make sure to use appropriate adjectives to describe your product/
service. After all you don’t want to mislead/ disappoint your target market.
Boss, I’d love to hear from you! BOSS Says what on this question: What is the importance of
refining one’s personality?
CREATING A PROTOTYPE OF THE PRODUCT/SERVICE
We now proceed to the stage of product or service development with possibly the greatest
learning: the creation of a prototype. In this step, the entrepreneur will be able to see that his/ her
ideas will soon become a tangible reality. The entrepreneur will bring his ideas to life.
A prototype is a preliminary model or sample of a new product or service that is created to
test a product concept or service process. It is an early sample, model, or release of a product built to
test a concept or process.
This stage in the inventing process is possibly the period of greatest learning. This is the stage
where the entrepreneur can experiment, develop, and make improvements in the potential product or
service.
For goods, the entrepreneur will decide as to the number and type of materials to be used in
coming up with the product ranging from metals to plastics, to chemicals, to textiles. The entrepreneur
will also scrutinize the parts and functions, as well as the design and other attributes.
For services, it can be performed by individuals who may later become a part of the
entrepreneurial line-up. The entrepreneur will take note strengths and weaknesses of the said
service. The goal is to come up with an acceptable and standard service.
Here are the advantages of creating a prototype:
• 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 would
be very costly and risky to commercialize a product without creating a prototype. With a
prototype, you are able to test and improve the product design or service process.
• Creating a prototype provides the entrepreneur a window to test the performance and
specifications of various materials and service processes. Every detail/ part of the product or
service should be evaluated carefully and repeatedly such that no flaw/ loophole is existent
before commercialization.
• A prototype helps an entrepreneur effectively describe the product or service to the product
team. Since a prototype is a preliminary sample, it provides members of the marketing,
operations, legal, and human resources department as well as professional prototype
developers, engineers, designers, handyman, machinist, or industrial design students, the
information needed for them to create the right product or service as planned. With the
prototype, as the entrepreneur, you can communicate to these people the aspect/s or part/s
you want to add or remove. Members will also give their comments to upgrade the prototype
prior market release. The prototyping stage is a great time to use all your untapped creative
ability and to explore all possibilities that are on the market.
• Creating a prototype elicits respect from stakeholders and customers. At the same time, a
prototype gives credibility to the entrepreneur. Try it to believe it, my dear GENtrepreneurZ.
Stakeholders and customers are not convinced by mere ideas. As the entrepreneur, you have
to show them a tangible output (prototype) so that they will believe you. And when your
prototype impresses them to say the least, you will earn their respect. That will make you a
promising entrepreneur who absolutely gets it done!
TESTING THE PRODUCT PROTOTYPE

This is a crucial process before an actual product or service is launched in the market. Testing
the prototype will uncover the final loopholes that need to be addressed before commercialization.
It gives the entrepreneur a leeway to examine and scrutinize the prototype and provide
feedback as to what can be improved before the launch. 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.
The following testing methods are applied by the entrepreneur:
• Focus Group Discussion (FGD)
Can you still recall this topic last midterm, boss? To refresh you, the participants will provide
relevant insights about the new product or service. The objective of the FGD is to identify
errors, deficiencies, and issues that may impede the success of the product or service. The
entrepreneur must also elicit the participants’ suggestions and practical solutions to these
problems.
• Legality and ethical test
The entrepreneur must ensure that the product or service complies with all relevant laws and
policies. The entrepreneur must also secure necessary license/s and/or permit/s. For the food
and pharmaceutical industry, entrepreneurs must be cleared first with the Food and Drug
Administration (FDA). Manufacturers of your COVID-19 vaccines such as Pfizer-BioNTech,
Moderna, AstraZeneca, and Sinovac needs clearance from the said institution prior inoculating
people of their respective vaccines. Television series and films are being reviewed first by the
Movie and Television Regulatory and Classification Board prior airing to be able to put a
“grade” to properly guide its audience especially the young ones. Restaurants and hotels must
have their health permit and sanitary permit to operate, respectively. Boarding houses,
dormitories, and apartments must possess their fire safety permit. The product or service must
not generate ethical issues such as threats to health, safety, and environment.
• Safety test
This test ascertains that the product is safe to use (flat iron, light bulb, electric fan), safe to be
consumed (food, beverages, medicines) and safe to be applied (cosmetics). In no way that the
product or service may harm the customer in terms of health and safety. Appliances such as
flat iron, light bulb, and electric fan must be certified and it must not possess faulty wiring
connections. Be careful with your Christmas lights! The shelf life of goods like food, beverages,
and medicines are also considered, so check the tag or label as to the item’s expiration date.
The effects of cosmetics to our bodies are also taken into account. Statements like
“hypoallergenic”, “noncomedogenic”, and “mild and gentle on skin” are stated to properly
inform us, buyers.
• Product costing test
The entrepreneur examines the expected costs versus the allocated budget in every stage of
the production process. This is to match whether the cost of production would be greater than,
lesser than, or equal to the allocated budget.
• Component test
Each component, part, or detail of the good or service must be tested independently to identify
component failures. The questionnaire is systematic/ organized. Any failure identified from a
component or part or detail must be solved and tested again until proven fully functional.
• Competitors’ product or service test
The entrepreneur must test a similar line of products or services from competitors to compare
and get the best practices to be applied to a new product or service.
Testing the product prototype is MANDATORY to ensure that the product or service will not fail
the customers and will deliver its definitive purpose. This will elicit customer satisfaction and
eventually, customer loyalty and retention. This is the time to prove that the concept formulated by the
entrepreneur will work and is feasible in real life. All the mistakes accounted for and the
improvements to be applied should be performed prior commercialization of the good or service.
VALIDATION OF MARKET ACCEPTABILITY
Validation of market acceptability is the process of finding out if the intended primary target
market will be buying the good or availing the service. This process either validates or invalidates the
entrepreneur’s perception about the suitability/ appropriateness of the chosen primary target market.
This is also the time to deeply understand the value that the product or service brings to the
customer and their prospective purchase behavior. This process is the last step before the product or
service can be introduced to the market.
The following questions are likely to be answered in the validation of market acceptability: “Will
the primary target market like the product or service?” and “Will the primary target market buy the
product or service when it is already in the market?”
Said questions can be answered easily by the primary target market segment by these
activities carried out by the entrepreneur:
• Use the most strategic marketing research tool. Decide whether you are to apply
FGD, survey, interview, observation, online survey, e-mail, questionnaires, or a
combination of these tools.
• Prepare relevant and concise questions. Do not go around the bush. Include
necessary questions only that will give you definite answers for the questions
stated earlier.
• Consult the experts. Consider tapping the knowledge of market experts who can
provide you meaningful information for you to enhance your good or service.
• Collect all the data, analyze them, and prepare a summative report that answers
the aforementioned questions.

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Entrepreneurship – week1 – finals

TESTING THE PRODUCT PROTOTYPE

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