Product Planning and Development Process in Entrepreneurship

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By: Site Engineer, Staff

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Product planning has something to do with all activities that enable accompany to determine what products it will produce and market to satisfy consumers wants while the development of product concerns the technical activity of product research engineering and design. More specifically the combined scope of product planning and development includes making decisions in the following areas:

  • Which products should the firm make and which should it buy?
  • How should the product be priced?
  • Should the company market more or fewer product?
  • What brand package and label should be used for each product?
  • How should the product be styled and designed and in what sizes, colors, and materials should it be produced?
  • In what quantities should each of it be produced?
  • What new uses are there for each product?

Steps in the Development Process

As a new product is developed, it progresses from the idea stage to the production and marketing stages. In each stage, management must decide whether to move into the next stage, abandon the product or seek additions information.

In general, the developmental process follows the steps outlined below:

  • Generation of New Product Ideas: New product development starts with an idea. What is important here is the company’s system for stimulating new ideas and then acknowledging and reviewing them.
  • Screening of Ideas: This is to determine which ones warrant further study.
  • Business Analysis: At this stage, the new product idea is expanded a concrete business proposal. Here management:-
    • Identifies product features
    • Estimates market demand and the product’s profitability
    • Establishes a programme to develop the product
    • Assigns responsibility for further study of the product’s ability.
  • Product Development: Here the idea on paper is converted into physical product i.e. pilot models or small quantities are produced to laid down specifications.
  • Test Marketing: Market tests and other commercial experiments in limited geographic areas are conducted to ascertain the feasibility of full-scale marketing programme. At this point, management must make the final decision regarding whether to market the product for commercials or not
  • Commercialization: Here full-scale production and marketing programmes are planned, and then the product is launched Management has complete control of the product up to this stage, but once it enters into the market competition and other marketing environments become major determinants of its destiny.
  • Follow-up: This needs to be done to see how the product is performing in the market. This requires market research.

Brand Decision

The brand decision is an important part of product strategy because consumers view a brand as an important part of a product and branding can add value to the product.

In those days producers and middlemen sold their goods without supplier identification, but with the rise of national firms and national advertising media, branding became important for identification. Branding today has gone so strong that each item produced is branded to differentiate between makers and their qualities.

The question that may arise here are these:

  • Why branding in the first place?
  • What are the benefits?
  • And at what cost?

To the buyer, the brand name tells the buyer something about product quality. Buyers, who buy some brand each time, know they will get the same quality each time they buy. The brand name also increases the buyer’s efficiency; by choosing the correct brand. With branding, the customer’s attention could be drawn on a new product’s special quality.

Branding to the seller makes it easier for the seller to process the order and track down problems. The seller’s brand name and trademark provide legal protection of unique product features that could be copied by a competitor. Branding also lets the seller attract the loyalty and profitability of set of customers’ and also helps the seller segment markets.

As for society as a whole, it increases innovation in society by giving producers an incentive to look for the new features that can be protected against imitating competitors. The branding results in more product choice for consumers and provides much information about products and where to find them. It also adds value to consumers and society.

Terminologies

  • Brand: A name term sign symbol or design or a combination of these intended to identify the goods or services of the seller or group of sellers differentiate them from those of competitors.
  • Brand Name: That part of a brand that can be vocalized e.g. Lux, Joy Omo, etc.
  • Brand Mark: That part of a brand that can be recognized but not vocalized such as symbols, design or distinctive coloring or lettering e.g. playboy, heart etc.
  • Trademark: A brand or part of a brand that is given legal protection. It protects the seller’s exclusive rights to use the brand name or brand mark, e.g Rx for pharmacy.
  • Copyright: The exclusive legal rights to reproduce publish and sell the matter in form of literary music etc.

Selecting A Brand Name

Finding the best brand name is a difficult task. It begins with a careful review of the product and its benefits, the target market and proposed marketing strategies.

Things to be desired for quality names are:

  • It should be capable of registration and legal protection.
  • It should be distinctive.
  • It should suggest something about the product’s benefits and qualities.
  • It should be easy to pronounce, recognized and remembered.
  • It should be translated easily into foreign languages

Once a brand name is chosen the name must be protected.

Packaging Decision

Packaging is the activities of designing and producing the container or wrapper for a product. Many products offered to the market have to be packaged. This is one of the elements of product strategies. The container or wrapper is called the package.

The package may include up to three levels of materials.

  • The Primary Package: This is the product’s immediate container empty bottle or can.
  • The Secondary Package: It is the material that is thrown away when the product is about to be used e.g. the cardboard or box containing the bottle for additional protection and promotion.
  • The Shipping Package: It is packaging necessary to store, identify and ship the products. A corrugated box carrying a product is a shipping package. Finally, labeling is part of packaging and consists of printed information appearing on or with the package.

Developing a Package

Developing a good package for a new product requires many decisions.

  • First is the Packaging Concept: This concept states what package should be or do for the product. Should it offer protection or introduce a new dispensing method suggest certain qualities about the product or the company or something else?
  • Decisions Must be Made on Specific Elements of the Package: Size, shape materials, color, text and brand mark.
  • Finding the Right Design for a New Product: To select the best package, the company must test the various designs to find the one that stands up best under normal use that dealers find the easiest handle and that customers respond to most favorably.
  • Product Package Outlook: After selecting and introducing the package, the company must check fit regularly in the face of changing consumer preferences and advances in technology.
  • Cost is Another Packaging Consideration: Developing a package a new product may cost a few naira and may take a few months to a year. Converting and implementing a new package design may take several years. So packaging cost must be considered by looking into how customers could value it. In making packaging decisions, the company must also take the society’s interest into consideration as well as that of customers and company’s objectives.

Labeling Decision

This could be a simple tag attached to the product or a complex graphic which makes part of the package.

The label may carry the brand name and some important information about the product. No matter the simplicity or complexity of the label, the law requires more information.

Labels perform several functions and the seller has to choose among these functions.

  • The label identifies the product or brand, e.g., Peak milk or Volvo placed on a car.
  • The label may also grade the product e.g., B. C., small, medium and big sizes etc.
  • The label might describe several things about the product who, where, and when it was made and expiring date if possible for perishable products and how to use it safely.
  • Finally, the label might promote the product through its attractive designs or pictures.

Labels of well-known brands which look old fashion after a while would need a change. It is a known fact that a label that is developed with new symbols to suggest freshness would attract customers.

The dangers in labels are these it could mislead customers or fail to describe important ingredients or fail to include needed safety warnings. As a result, both the federal and state laws regulate labeling. Sellers should make sure their labels contain all the required information stipulated by law.

 

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