PRODUCT
DEVELOPMENT
Entrepreneurship - Q2
Module 1
Product Development
The process of refining, testing, and
commercializing a product or service
Aims to solve the problems of the
primary target market
A product does not have to be totally
new
It can be an improved version of an
existing product
Importance of Product development ensures
that a product is:
Product Useful
Development Acceptable to customers
Safe and reliable
Ready for the market
Four Main Steps in
Product Development
Product development follows four
steps:
1. Developing a product or service
description
2. Creating a prototype
3. Testing the prototype
4. Validating the market
Product or Service
Development
A product/service description explains how a
product works and how it benefits customers.
It serves as a blueprint for business
operations.
A clear description helps entrepreneurs plan
and deliver value to their target market.
Guidelines for Writing a
Product Description
Address the target customers
directly using simple, everyday
language.
Focus on features that solve customer
needs or problems.
Use realistic claims; avoid
exaggerated or meaningless
statements.
Creating a Prototype of the
Product or Service
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
productor 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.
Testing the Product
Prototype
Testing a product prototype is essential
before launch to identify flaws, gather
feedback, and make necessary
improvements to ensure readiness for
commercialization.
The following testing
methods are applied
by the entrepreneur:
1. Focus group
discussion
Collects user insights to identify errors,
weaknesses, and issues that may affect
success, while generating practical
suggestions for improvement.
2. Legality and ethical
test
Ensures the product or service
complies with laws, regulations, and
ethical standards, and does not pose
risks to health, safety, or the
environment.
3. Safety Test
Verifies that the product or service is
safe to use or consume and does not
cause harm or health risks to
customers.
4. Product
costing test
Analyzes production or service
costs to align expenses with the
entrepreneur’s budget and cost
objectives.
5. Component
Test
Tests individual components
separately to detect failures; faulty
parts are redesigned and retested
until fully functional.
6. Competitors'
product/service test
Compares the prototype
with competitors’
offerings to identify
best practices and
improve the new product
or service.
7. VALIDATION OF MARKET
ACCEPTABILITY
Validation of Market
Acceptability is the
process of finding out if
customers are willing to
like and buy a product or
service.