Entrepreneurship
Chapter Four:
Product/Service Development
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1. INTRODUCTION
• Product/service development is a complete
process of bringing a new product or service in
the market.
• Intense global competition, short product and
technology lifecycles, unpredictable consumer
buying patterns makes new product development
a critical activity in most businesses
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• Hence, this chapter explores the
• New product development
process.
• Besides, focus on intellectual
property, important steps that
business owner should have
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taken to protect their assets.
2. The
Concept of Product
• Organization's success is dependent on customer
satisfaction and delight.
Customer satisfaction is achieved through the
development of product and service, which have all
attributes required by the customer.
• A successful product or services do not only have an
attractive package design but should be also able to
provide robust performance. 4
• In marketing, a product is
anything that can be offered to
a market to satisfy a need or want.
• Product is a combination of 10
basic entities like goods, services,
experiences, events, persons,
places, properties, organizations,
information, and ideas.
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3. Product Development Process
• Product development:-
is the process through Generally Product
which companies react to development process, would
market signals, have four major stages.
respond to changes in
customer demand,
adopt new
technologies, foray into
new areas, and ensure
continuous growth. 6
The various stages of new product development process are explained below:-
1. New Idea
Generation:- The new
product development
process starts with search 3. Concept Development
for ideas. and Testing:- Any product
• Some sources of ideas idea can be turned into
several product concepts like
for include consumers,
: Who will use the product?
existing products & What benefits should the
services, & research and product provide? When will
development. people consume the produced?
2. Idea Screening:- In • The concepts can be in word
or picture description. 7
the 2nd stage, the purpose
4. Marketing Strategy
Development:-
The marketing strategy plan
consists of three parts: 6. Product Development:- Its
Market size, structure, goal is to find a prototype that
behavior; Planned price, the consumers see as embodying
distribution strategy and the key attribute described in the
5. Long
Business
run sales Analysis:-
and profit product concept statement.
Management
goals. needs to prepare
sales, cost and profit • Functional tests like Durability,
Speed, Cost, etc. and
projections to determine
Psychological aspects like
whether they satisfy the Colors, Sizes, Weight & Other
company's objective or not. Physical Cues are conducted.
• The company made Break 8
even analysis.
7. Market Testing:- The • Where (Geographical
goals are to test the new product Strategy): - We need to
is more authentic customer decide whether to launch the
settings and to learn how large new product in a locale area, a
the market is. region, national and
international market.
8. Commercialization
• To Whom (Target-Market-
Prospect): - Within the
rollout markets, the company
must target its distribution
and promotion to the best
• When (Timing): - In prospect group.
commercializing, market entry
timing is critical. Whether it is • How (Introductory Markets
First Entry. "first mover Strategy): - a new product
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advantage” or Late Entry may/can use network-planning
4. Legal and Regulatory
Frameworks for
Entrepreneurs
• One of the challenges the beginner
entrepreneur will face as he/she goes into
business didn’t understands the regulatory
environment laws and regulations.
• To operate as a legal businessperson and
protect the business from unnecessary suits
and liabilities, the entrepreneur needs to
understand the various laws that govern
his/her business.
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5. Intellectual Property
• Intellectual property is a legal definition of ideas,
inventions, artistic works and other commercially
viable products created out of one's own mental
processes.
• In order to enjoy the benefits arising from the
exclusive ownership of these properties, the
entrepreneur needs to protect these assets by the
relevant law.
• Intellectual property is protected by such legal means
as patents, copyrights, and trademark registrations.
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5.1 Patents
• A patent is a grant of a property right by the
government to an inventor.
• A patent provides the owner with exclusive
rights to hold, transfer, and license the
production and sale of a product/process.
Utility Patent: Protects any new invention or
functional improvements on existing inventions.
Design Patent: Protects the appearance of an
object, ornamental, and unobvious designs for
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articles of manufacture.
• Patents are property rights that can be sold
and transferred, willed as well as licensed and
at times used as collateral.
• Most independent investors do not
commercialize their inventions instead, they sell
or license their patents to others who have the
resources to develop products.
• According to the proclamation of Ethiopia in
order to be granted a patent, an invention
must fulfill three conditions
1. It must be new. 13
2. It should be capable of industrial
The proclamation excludes the following
from patentability: -
Inventions contrary to public order or morality.
Plant or animal varieties.
Rules or methods for playing games or performing
commercial and industrial activities and computer programs.
Discoveries, scientific theories and mathematical methods;
and
Methods for treatment of the human or animal body by
surgery or therapy as well as diagnostic methods.
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5.3 Trademarks
• A trademark may be a Word, Symbol,
Design, It could be a slogan or even a
particular sound that distinguish our
product and services in a market.
• A trade mark is granted through the U.S Patent
and Trade Mark office for a period of 20 years. 15
It needs the necessary renewal.
Benefits of a Registered Trademark:-
• It provides notice to everyone that you have exclusive
rights to the use of the mark.
• It entitles you to sue in federal court for trademark
infringement.
• It establishes the right to prevent importation of goods
with a similar mark.
• It provides a basis for filing trademark application in
foreign countries.
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Trademark Directive is issued in the
country in 1986 with the following
objectives in that it helps: -
• To distinguish the products or services of one enterprise from
those of other enterprises
• To prevent consumers from being victims of unfair trade
practices;
• To provide required information on trademarks to government
and individuals.
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5.4 Copyrights
• Copyright is a right given to prevent others from
printing, copying, or publishing any original works of
authorship.
• A copyright is that the intellectual property is protected for
the life of the originator plus 50 years.
• Among the things that need to be protected through
copyrights are: Music, books, software, scripts, articles,
poems, sculptures, models, maps, and blueprints.
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In Ethiopia, the revised copyright law was enacted in July 2004.
The law severely punishes those who infringe others‘ copyright,
whether intentionally or with negligence, with imprisonment of up
to 10 years and material and moral compensation of Birr 100,000
minimum.
The proclamation gives protection to literary, artistic and
scientific works which include books, articles, computer
programs; speeches, lectures,, and other oral works;
dramatic, choreographic works, and other works created for
stage production; musical works; audiovisual works; works
of drawing, painting, and other works of fine arts;
photographic and cinematographic works; sketches, and
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three dimensional works related to geography,, architecture
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Quiz
• 1. what is patent and its types
• 2. what does it mean concept testing and product development
stage?
• 3. what does it mean trade mark and copy right (its legal issue
in Ethiopia context)
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