Senior High School

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ENTREPRENEURSHIP
Quarter 2 – Module 1:

Product Development

Grissil P. Babon
Compiler / Contextualizer

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 Second Quarter, Module 1, Week 1
Product Development

Content Standard : The learner demonstrates understanding of

environment and market in one’s locality/town.
Performance Standard : The learner independently creates a business
vicinity map reflective of potential market in
one’s locality/town.
Competencies : Demonstrate understanding of the fundamentals of
product development.

Learning Outcomes : Upon the completion of the given unit, the SHS
learners are expected to appreciate the
four sequential steps in product development.

What I Need to Know

At the end of this lesson, the learner will be able to acquaint themselves
with the pre –requisites in selling a product or service to the market. Moreover ,
they will able to identify the basics of product development.

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 What I Know

Instruction: Circle T if the statement is TRUE and F if the statement is FALSE.

T F 1. Market acceptability is a critical factor that the entrepreneur

must validate before launching the product or service.
T F 2. 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.
T F 3. The objective of the FGD is to identify errors, deficiencies, and
issues that may impede the success of the product.
T F 4. Creating a prototype provides the entrepreneur a window to test
the performance and specifications of various materials and
service processes.
T F 5. The entrepreneur must examine every stage of the
manufacturing process or every process of the service blueprint
to evaluate and finalize the costs involved.
T F 6. The product or service description simply describes how a
product or service works and how it benefits the customers.
T F 7. Prior to launching, the entrepreneur must ensure that the
product or service complies with all relevant laws and business.
T F 8. A prototype helps the entrepreneur effectively describe the
product or service to the product team.
T F 9. 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.
T F 10. 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.
T F 11. Product development is the process, testing, and
commercializing a product or service with the ultimate objective
of solving the problem of the primary target market.
T F 12. Testing the prototype will uncover the final loopholes that need
to be fixed before commercialization.
T F 13. One technique for creating the best prototype is by studying
the competitor’s product or service.
T F 14. 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.
T F 15. The entrepreneur’s creativity and ingenuity will be used
in creating the prototype.

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 What’s In

Let us review the previous lesson.

A brand name is a trademark. It leaves an impact to the target market. It gives

an edge against the competitors.

Instruction: Select three products you patronize for the past twelve months. How
often do you buy products? How do you benefit from it?

PURCHASE FREQUENCY
PRODUCT BENEFITS
(daily, weekly, monthly, quarterly, or annually)
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2
3

What’s New

Instruction: Indicate a check mark before a number if the statement is necessary

in product development.

______________ 1. Product design validated and tested.

______________ 2. Product meets requirements.
______________ 3. Scope effectively managed.
______________ 4. Product test carried out, changes incorporated.
______________ 5. All regulatory tests passed.
______________ 6. All documentation reviewed and validated.
______________ 7. Development budgets and variances addressed
______________ 8. Go for launch.
______________ 9. Determine the product shelf life.
______________ 10. Get feedback from clients.

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 What Is It

Fundamentals of Product Development (Batisan, 2016)

Before commercializing a new product or service, the entrepreneur must focus

on refining the product or service ad 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 product. Product development is the process, testing, and
commercializing a product or service with the ultimate objective of solving the
problem of the primary target market. It is composed of four sequential steps: (1)
developing a product or service description, (2) creating a prototype, (3) testing the
prototype, and (4) validating the market.

Product or Service Development

The product or 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:
1. It should directly address the primary target market in a personal manner
using everyday language. The entrepreneur should put himself or herself in
the customer’s shoes, where the product description will be addressed to.

2. It should highlight the features that will cater to the customer’s needs or
address the customer’s problems.

3. Realistic superlatives should be used for the product description. Motherhood

statements such as “word-class service or product excellence” may not matter
to the customers at all.

[Link]

Jolly Spaghetti Product Description

Creating a Prototype of the Product or Service

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 After defining the product or service, you may now proceed with one of the
most exciting but also very challenging parts of product or service development: the
creation of a prototype. 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. This is an
exciting process for the entrepreneur because he or she will be able to see that his
or her ideas will soon become a tangible reality. The entrepreneur’s creativity and
ingenuity will be used in creating the prototype.
According to Entrepreneur ([Link]), creating a prototype lessens
implementations/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 way 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 respect from key stakeholders 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.

[Link]

Prototyping

Creating a prototype is the stage where the entrepreneur can experiment, develop,
and make some improvements in the potential product or service. The objective of

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the entrepreneur at this stage is to verify if the product or service concept will work
the simplest, fastest and cheapest way.
One technique for creating the best prototype is by studying the competitor’s
product or service. The entrepreneur will try to scrutinize the parts and functions,
as well as the design and other attributes of that product, in hopes that he or she
will be able to address some problems in the competitor’s products and come up with
the most efficient and effective prototype. As for the services, the entrepreneur may
try availing the competitor’s services and will take note of their operations, such as
service delivery, location, facilities, and ambiance. He or she will than take notes of
the pros and cons of the service to create the prototype, simulate the service by trying
it with his or her friends or relatives, and then get their feedback.
Some entrepreneurs create a video presentation or miniature prototype, so they
will be able to explain the details, if the product is to be viewed by a panel of
specialists (e.g., engineers, developers, scientists). The scope should be related to the
entrepreneur’s budget. After creating the prototype, he or she should be ready to test
it.

Testing the Product Prototype

All the efforts exerted in the creation of a prototype will be put to waste if the
prototype will not be tested. Testing the prototype is a vital process before an actual
product or service is launched in the market. Testing the prototype will uncover the
final loopholes that need to be fixed 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. These improvements and changes
must be completed first before moving forward to the next step. 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:

1. Focus group discussion – the participants will provide relevant insights about
the new product or service. The objective of the FDG is to identify errors,
deficiencies, and issues that may impede the success of the product.
Participants also need to 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 business. For
example, food products must be cleared first with the Bureau of Food and
Drugs (BFAD) before they are offered to the public. 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 use,
safe to be consumed (food and beverages), and safe to be applied (cosmetic
products). The product should not in any way harm the customer or put the
customer in peculiar situations. In services, the entrepreneur must ensure

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 that the processes to be performed by the service provider must not be
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 blueprint 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.

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 mistake accounted for and improvements to be fixed
should be performed first prior to commercialization of the product or service.

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[Link]

Food Evaluation Form

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Validation of Market Acceptability

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. Market
acceptability is a critical factor that the entrepreneur must validate before launching
the product or service, because this can strongly suggest if the business will be
successful or not. It either validates or disconfirms the perception of the entrepreneur
about the sustainability of the chosen primary target market. It also tests whether
the value proposition and unique selling proposition are appropriate or there’s a need
to improve on them. This is also the time to deeply understand the value that the
product or service brings to the customer and their prospective purchase behavior,
because it helps the entrepreneur build a more relevant and meaningful product or
service. This process is the last step before the product or service can be introduced
to the market. The following objective questions are more likely you be answered in
the whole process of the market acceptability objective questions are more likely 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 but 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 (FDG), 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. For instance, a market expert sells cars to
a specific market segment because they almost have the same demographic
data requirements. The entrepreneur can use these data to improve the
product or service.

4. Collate all the data analyze them, and prepare a summative report that
answers the objective questions that were mentioned earlier.

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[Link]

Product Survey Questions

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 What’s More

Instruction: Look for a product that shows development. Rate their process
according to product development. Put a check mark on the desired column.

PRODUCT DEVELOPMENT EVALUATION

Product Name: ________________________________

Very Very
Dissatisfied Dissatisfied Satisfied Satisfied
Product or Service
Development
Creating a Prototype of the
Product or Service

Testing the Product

Prototype
Validation of Market
Acceptability

Answer the question below:

Does the company/entrepreneur religiously follow the steps in developing the
product? If not what do you think are their reasons to skip any of the steps?
Elaborate your answers.
___________________________________________________________________________
___________________________________________________________________________
___________________________________________________________________________
___________________________________________________________________________
___________________________________________________________________________

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 What I Have Learned

Instruction: Read the questions below and write your answers on the
blank.

1. Why is product development vital to companies?

_________________________________________________________________
_________________________________________________________________
_________________________________________________________________

2. What are the steps of product development?

_________________________________________________________________
_________________________________________________________________
_________________________________________________________________
_________________________________________________________________
_________________________________________________________________
_________________________________________________________________

What I Can Do

DEVELOPING YOUR PRODUCT

Follow the instruction.

1. Conceptualize a product. Reflect any product you want to introduce in the

market.
2. Pinpoint your value proposition. State on how to convince a possible
customer why your service or product will be of more importance than the
competitors.
3. Realize your concept. Prepare materials or ingredients to actualize your
product.
4. Produce a prototype. Make an actual product.
5. Conduct a product testing in your home. Let the members of the family
evaluate your product.
6. Take note of the suggestions for improvement. Write all their comments in
a small notebook or paper.
7. Plan on how to perform your market acceptability validation. Conduct an
online survey if your product will be accepted by the market.

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 Assessment

Multiple Choice. Choose the letter of the best answer. Write the chosen letter
on a separate sheet of paper.

1. Which one of the following best describes the product development process?
A. the strategy process for original product
B. work achieved by a company's research and development department
C. recognize opportunities in the marketplace, create and test products to
take advantage of those opportunities, and then present the products
to the market.

2. Product development starts with

A. Idea generation
B. Idea selection
C. Product Testing

3. The components of a product or service offer include:

A. customer benefits, attributes or features, warranty, and potential benefits.
B. core benefits, attributes or features, support and services, and potential
C. core benefits, attributes or features, support and services, and customer
loyalty programs.

4. A brand must offer which one of the following to have a value?

A. Consistency
B. Modest Product
C. Multifaceted Product

5. What is a target audience?

A. The people who will not buy your item
B. The possible customers of your product
C. The people who have no idea of your company

6. What is a feature?
A. A movie
B. A newspaper
C. Specific particulars regarding a product

7. An eye-catching idea must be developed into a _

A. Product idea
B. Product concept
C. Product strategy

8. The following is a must in developing a product

A. Research
B. Customer’s feedback
C. All of the above

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9. Designs are modified in order to
A. Improve the product
B. Increase income
C. All of the above

10. What is the primary benefit of the coat?

A. Brand
B. Cost
C. Warmth

11. Product development only contains the framework of new products.

A. True
B. False

12. Product differentiation is the making of product modifications to convince

the potential buyer to purchase the product.
A. True
B. False

13. Companies strive on the basis of their products physical structures only.
A. True
B. False

14. Most first-hand products are commercial disappointments.

A. True
B. False

15. Product quality is mirrored in the product price customers are willing to pay:
A. True
B. False

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 Answer Key

1-15. True
Acceptability
What I Know Market
and Validation of
Product Prototype
Testing the
Product or Service,
/ 10. Prototype of the
/ 9. Creating a
/ 8. description,
/ 7. Product or service 2.
/ 6. customer
/ 5. value to the
/ 4. In order to provide 1.
/ 3.
/ 2. What I Have Learned
/ 1.

What’s New

References

Books:
Batisan,Ronaldo S. (2016). Entrepreneurship. Makati City, Philippines: Diwa
Learning Systems Inc.

Internet:

Introduction to Prototyping. June 18, 2020

[Link]
190618182527/95/[Link]?cb=1560882467

Product Banner
[Link]
[Link]/public/uploads/JB_PRODUCT-BANNER_Jolly-
Spaghetti_FA.png

Product Development Checklist. August 2015.

[Link]
F642BB4BD1DEAE6D7208CE185D640A05DB&thid

Survey
[Link]

Testing Form
[Link]
png

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