Video Transcript: Product Development

Hello, welcome. We're going to discuss product development. Product  Development, in this process, we come up with a conceptual idea for the  product. So here we're brainstorming. We think of ideas on products that might  benefit the consumer or there's a large consumer demand, and how can we  differentiate between products that are already in the market? What can we do  to make our product better and have competitive advantages? We profile the  target market, define who the customer is. In this process, we're going to do  some statistical analysis, as we talked about in a previous video there, we'll be  able to define what our target is, who they are, and what their demographics  consist of. We perform a competitive analysis of the market to get our strengths  and weaknesses and identify our opportunities and threats. Let's identify what a  product is. A product is a good, service, or idea consisting of a bundle of tangible and intangible attributes that satisfy consumers and is received in exchange for  money or something of other unit of value. So during the planning and  development stages, this is going to refer to the systematic decision making  related to all aspects of the development and management of a firm's products.  So we're going to determine what kind of research and development that we're  going to need to undertake. We're also going to have to understand the type of  capital structure, what kind of financing, how we're going to raise that we're  going to figure out what's going to differentiate, again, our products from the  market, and identify our strengths and our weaknesses and identify  opportunities and threats. So product development, we're developing new  products, new ideas. They're created as a result of an idea or a perceived gap in the current world. So how can our product help benefit consumers? And what  are they demanding? What do they want? And how can we give it to them that's  different, that gives us a competitive advantage against the competition, it  usually arises from a need or want that can't be immediately filled and leads to  the question, why don't I create and sell that product? A lot of entrepreneurs  have these ideas, and they want to bring it to market. So that creates a lot of  sole proprietorships, a lot of local businesses. They create maybe a fulfill a  demand that is in the community, and they create a business. In order for a new  product or idea to succeed, it must be or have desirable attributes for their target market that must be demanded. People must want it. It has to be unique or  differentiated. You know, what gives it its expenditive advantage? If the new  product is not these things, it could potentially be doomed to fail without  innovation. So here are the stages of product development, idea generation,  idea screening, concept development, market strategy, conducting feasibility  analysis or studies. Product design, test marketing and market entry. So let's  look at idea generation and innovation or invention as a result of a gap in the  current market. How can we fill those demands, the desire for a particular  product that's not already out there, or something that's out there, but is different and unique that makes the consumer experience better. An idea to produce a 

product or service not currently available. So we want to take advantage of a  demand for a product that's not currently available. Number two idea screening.  Not all ideas are good ones. For example, New Coke came out. It was a failure.  It was a coke line that was trying to differentiate, but nobody bought it. Or  McDonald's off offered the MC pizza. Nobody bought that. It didn't stay around. I don't know if I ever ate one. Marketers need to test consumer reaction to their  idea before they continue. They need to know if it's going to sell. They need to  know there's going to be a demand for that product. So throw the idea around  and see what people think. Maybe a focus group or a test market to get an idea, a sample of a population to see how these people react, and then therefore, we  can maybe move forward with the product or try another test market to see if  you get equal results. Concept development, if the feedback. From consumers  and your business associates is positive, a prototype or sample is created. At  this stage, you'll allow to see if the product works and to allow your target market to use it provide feedback for improvements. So we need this feedback. It's  totally necessary for the next stage in the concept development, we need to  know, okay, is this going to sell or not? What improvements can we make? What are our consumers, potential consumers? What are they looking for, and are we  filling that desire with our products? Market strategy, the development of your  marketing strategy. Now, a lot of money is poured in to public relations and  marketing. You want to have a good image to the consumers. You want people  to desire your product. So a good marketing strategy is a good way to increase  your revenue and sales, determine your target market and how to use the four  P's to optimally sell them your product, the four Ps of marketing, these are the  components of the marketing mix. Product is your product, variety, the quality,  design, what are the features, brand name, packaging, sizes, services,  warranties, returns. These are all part of the product component, the price, what  is the list price? What are the discounts, allowances, payment period, credit  terms, identifying your target market, the place, channels, coverage,  assortments, locations, inventory, transport, promotion, sales, promotion,  advertising, sales force, public relations and direct marketing. So you know that  marketing should take up a lot of your budget, or a big portion of your budget,  especially in the beginning when you're in the startup and growth phase, so that  you can push your product out there to consumers, find the demand or create  demand and have successful revenue generation. So number five, feasibility  and analysis and study after you have conducted your marketing research, the  feasibility analysis is next often done at the same time as the product design  and marketing strategies are conducted. Many questions are answered in this  stage. For example, what materials and labor are required? What is the price of  production, distribution channels, cost of promotion? This analysis will answer  the following question, can we make and sell this product and make money  doing it, product design, what the product will look like. How will our consumers 

react to the product design? Is it something that they like? Is it currently  fashionable? The design will depend on what it does and what the market  wants. So now we're going to test our product, test marketing, test acceptance  of the product. We want to know how well is our marketing, how well is our  product going to sell? We're going to test this and have an idea of consumer  demand. This usually occurs by offering the product to a random sample of your  target market, we want to know how the sample is going to react, and record  that and generate a statistical means of quantitative feedback. Customer  feedback is used to improve the venture and determine whether the product  should go to market. So the customer feedback is going to be critical in  understanding whether we should go to market or not. Is the demand there?  Should we undertake this? Can we make money market entry? So the product  is officially in the market, being sold to anyone that wants to buy it. This initiates  the product life cycle, and its life will be determined by the consumer market, the competition and further product advantages, so product development, following  this process provides a new product with a much better chance of success.  Should constantly revisit the process and improve and update products to stay  ahead of the competition.