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 Product Development                                                                                    

Product development is an extension of business idea generation and implementation. You have been shown how you can generate and implement your business idea in this booklet. Some explanation on product development has also been provided under the chapter for implementation, page 53. Once you implemented your business, the next step is to think how it is possible to further develop or improve the product. You, as a designer-entrepreneur, should try to develop your product on a continuous basis. It is only then that you could satisfy customer needs and sharpen your competitive edge. In the follow-up and improvement stage of your business, you are required to undertake the following activities to develop the product.

• Carry out a simplified feasibility study on the product to be developed in terms of skill, technology, tools/equipment, raw material, and skilled labour;

• Make a market assessment for the product to be developed;

• Design the product;

• Develop a model or prototype of the product;

• Make limited initial production;

• Test the product for quality (physical strength and acceptability by the consumer);

• Promote/advertise the product;

• Commercialise. 

When planning to develop a new product the decision of which product and design to manufacture needs to be based on research, and not just on a temporary demand for a certain product by a handful of people. When the demand for existing products is on the downturn the possibility of changing the design, size, features, colour etc. becomes necessary in order to maintain sales. Moreover, such strategies require expertise in idea development and technical skills to make the product.

Improve your product quality

Product quality improvement is one of the major critical success factors for your business and you should take care of it in the follow-up and improvement stage of your business. Customers are always concerned with the quality of the product they purchased from you. Quality assurance begins from the very beginning of starting a business. Therefore, in the follow-up and improvement stage check that you have been selling products with the required quality.

In the follow-up and improvement stage of your business, evaluate product quality in terms of:

• Raw materials used;

• Production technology selected;

• Tools/equipment used;

• Efficiency of the production process/line;

• Product finishing skill of your staff.

Since your customers are the best sources of information for product quality improvement, ask them how they felt when using your product. 

Continuous quality upgrading is the best strategy to follow, however, only if you can afford it. If upgrading of product quality is too expensive, then maintaining the existing quality may be a better strategy. In the event that your products are for sale to conscious clients (who are sensitive to quality), then precautions should be taken to keep the products satisfactory to them.  An existing product can be modified by improving its features, without altering the benefits to be gained, in order to attract new users or to increase its usage. In this connection you can resort to a method known as "value engineering".  Value engineering is reducing the costs of a product by keeping the quality constant or increasing the quality, and hence the selling price of a product with production costs held constant. The producer should constantly exercise value engineering alone or with his friends, family or qualified personnel in his enterprise so as to reap increased benefits.

If the life span of the product is on the downturn, then you can look for new target markets and introduce the product appropriately. In the next run of your business, make sure that you have done your best to keep the product quality to the highest possible level. A product with good quality would improve your business in the future by:

• Creating satisfied customers;

• Facilitating sales in volume;

• Bringing repeat sales easily.

Diversify your product and/or market

Diversification is possible in two ways. The first possibility is to diversify the product (to introduce new products to the market) and the second is to diversify the market (to go to new markets). You can introduce new products related to the existing product line. In this case the risk involved is low. On the other hand, you can introduce  a completely different product to the market. This may have a higher risk than the first strategy, as you do not have prior experience with the newly developed product.

In a similar manner, you can diversify your market base within the existing geographic location or start selling in a completely different market. Diversification in existing market is also possible by type of customer - selling to low or middle or high-income level customers. 

At the end of each business cycle, you should be able to analyse your past performance and see if it is necessary to take one of the above actions for the next run.

If you want to diversify your product be aware of the following:

• The skill required to produce the new product;

• The technology and tools/equipment required for production;

• The personnel required for production;

• The additional investment required; 

• Readiness of the market for the newly diversified product:

  • within the existing market;

  • within a new market.

If you want to diversify your market be aware of the following:

• Needs, purchasing power, tastes of target consumers, taste of sales and competitors etc. are  assessed with the help of  market research;

• Availability of work premises  close to the new market, availability of transport facilities and additional costs thereof;

• Is the channel of distribution done by wholesalers or retailers?

Compare with products of competitors

Products of different enterprises can be compared in terms of:

• Production cost;

• Selling price of the product;

• Quality of the product;

• Design and packaging of the product;

• Availability of the product any time required by the customers;

• Accessibility of the product;

• Service life of the product.

After evaluating the differences you are expected to make the necessary corrections against the items you have found to be inferior. 

You can develop a strategy of manufacturing broader product lines. This strategy allows profiting from economies of scale, which in turn will benefit customers to enjoy reduced prices due to low overhead costs. In addition, manufacturing a wide or full range of products in different designs allows customers to do all their shopping in one location.

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Accounting  I  Marketing  I  Staff and Stock
Maintenance  I  Finance  I  Summary