Entrepreneurship -- Product and Service Development
© Copyright Carter McNamara, MBA, PhD, Authenticity Consulting,
LLC.
AField Guide to Nonprofit Program Design, Marketing
and Evaluation.
Product (or service) management includes a wide range of management activities, ranging from the time that there's a new idea for a product to eventually providing ongoing support to customers who have purchased the new product. Every organization conducts product development, whether it's done intentionally or unintentionally.
This module provides a wide overview of considerations in developing and managing a product. How a product is developed or managed is depends very much on the nature of the organization and its products, for example, retail, manufacturing, wholesale, etc. Note that different people might even have different categorizations for the activities described below.
NOTE: Nonprofit organizations often provide services in the
form of "programs", rather than "products"
-- although the services from the programs are certainly "products"
to groups of clients. Therefore, readers from nonprofit organizations
might be better served to read the following guide:
Basic
Guidelines for Nonprofit Program Design and Marketing
Sections of This Topic Include
Basic Introduction to Product Development
and Management
Approaches to Developing Products and
Services
Product Idea
(Are You Planning a New Business Around
Your New Idea?)
Product Verification and Funding -- Can
Your Idea Become a Viable Product or Service?
Product Development -- Building Your
Product or Service
Product Production -- Ongoing Building
of Products or Services
Product Distribution, Advertising and
Promotion, Sales and Service
Also consider
Related Library Topics
Learn More in the Library's Blogs Related to Entrepreneurship -- Product and Service Development
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Basics Introduction to Product Development and Management
Businesses can generate revenue from selling more of the current
products to more of the current customers (customer maximization),
more of the current products to new customers (customer development),
new products to current customers (product development), or new
products to new customers (diversification).
Product Managers -- How Do You Measure Their Success?
To Broaden Your Perspective on Product Development and Management
Many of the activities in product development are also activities
in the overall process of marketing.
Basics
of Marketing (from idea to evaluating to developing to producing)
Life Cycles
in Organizations (everything has a life cycle, including products)
Broaden Your Perspective Even More?( Or If You Need an Investor or Funder)
If the reader is highly motivated at this point, then he or
she might scan the information about the basics of business planning.
Business planning is usually conducted when starting a new organization
or a new major venture, for example, new product, service or program.
Essentially, a business plan is a combination of a marketing plan,
strategic plan, operational/management plan and a financial plan.
Funders or investors usually require a business plan. Far more
important than the plan document, is the planning process itself.
Basics
of Business Planning
Approaches to Developing Products and Services
There are five different approaches that people use to develop
a product or service. The following article provides an overview
of each of the methods. Additional articles provide additional
perspectives.
Approaches
to Developing Products and Services
How to Develop a Prototype
Could Fewer Products Lead to More Profits?
Also see Intellectual Discipline in Product Development
Idea for New Product or Service
Sources of Ideas
At this stage, someone has an idea for a new product or service.
Ideas can come from many sources, for example:
1. Complaints from current customers (see Customer Service and Customer Satisfaction)
2. Requests for Proposals from large businesses, government agencies,
etc.
3. Modifications to current products (see Innovation)
4. Suggestions from employees, customers, suppliers, etc. (see
Creative Thinking)
Protecting Your Ideas
It's likely that someone else will think your idea is a good one, too! Therefore, it's important to protect your idea as much as possible, for example, by getting copyrights, trademarks or patents. See U.S. Intellectual Property Law
You may want to "package" your product with others,
or sell your new product as a set of products. The following link
might help you in this consideration.
Naming
and Branding
Intellectual
Property
You might also want to minimize the chance of an employee taking
the idea and starting their own business. See
Non-Compete
Agreements
Are You Really Ready for Entrepreneurship?
It's one thing to have a good idea for a new product or service,
but it's another thing to actually develop and provide it -- that's
the essence of entrepreneurship. The following link is to a resource
that will guide you through complete consideration of whether
you're really ready for entrepreneurship or not.
Entrepreneurs
-- Are You Really Ready to Start a New Organization or Product?
Are You Planning a New Business Around Your Idea?
If you are planning to start a new for-profit business or nonprofit business around your idea for a new product or service, then you will benefit from reading information in the topics Starting a For-Profit Business or Starting a Nonprofit Organization. Note that information in these two topics will guide you through assessing the feasibility of your new business -- information in the rest of this topic about product management will include assessing the feasibility of developing a new product. It's likely that if you are starting a new business, you will eventually need information in the rest of this topic about product development.
Product Verification and Funding -- Can Your Idea Become a Viable Product/Service?
You Need More than a Good Idea
Just because it seems like a great idea doesn't mean that it can become a product. A viable product needs to be profitable (or, in the case of a nonprofit, at least sustainable), including being producible and marketable. Also, the product should be related to the purpose, or mission, of your business. Businesses can go bankrupt by trying to be too many things to too many customers, rather than doing a few things very well.
If You Need an Investor or Funder for Your Idea
For-profits that need investment money will benefit from the
following link.
Fundraising
(For-Profit)
Nonprofits that need funding will benefit from the following
link.
Fundraising
(Nonprofit)
As noted above, you very well may need a business plan to convince the investor or funder that your idea is viable to become or product or service. See Basics of Business Planning
Verifying that Your Idea Can Become a Good Product or Service
At this point, you will benefit from understanding the basics
of marketing, particularly how to conduct market research and
a competitive analysis. If your idea still seems like a good one,
then it's important to know how you will position and identify
your new product to the market. You'll certainly want to know
how much you might charge for it (that is, its price to the customer).
The following links will guide you through these considerations.
Marketing
Research (is there a need for your new product? by whom? how do
they want it?)
Competitive
Analysis (who are your competitors? what are they selling? can
you compete?)
Pricing
(how to come up with a price, based on development costs, etc.)
What Is Your Product Saying to Consumers?
If you plan to promote, sell and/or distribute products over the Internet, you'll want to review information in the topic E-Commerce.
Product Development (Building Your Product or Service)
At this point, you've concluded that your idea can become a viable product. Now you're faced with actually building the product itself. The particular process you use to build your product or service depend very much on the nature of the product or service. The following links might help you as you develop your unique process to build your product.
6 Tips to Delivering Customer Value (a Leadership Challenge)
Inside Technical Specifications
What is a Bug List?
What’s next for design?
You certainly should develop and implement a project plan to
build your product.
Project
Planning (method to carefully plan and track development of the
product/service)
You should seriously think about developing and implementing
a project plan to build your product.
Operations
Management (wide variety of practices to build your product)
Businesses are coming to learn that it's never too early to integrate
principles of quality management into the design and development
of products and services.
Basics
About Quality Management
Product Production -- Ongoing Building of Products and Services
Again, the particular processes you use repeatedly to produce
your products and services depend very much on the nature of your
product or service. The following links will help you to develop
the new product or service, including regularly tracking how many
versions you have produced.
Control
Function of Management (variety of ongoing management activities
to coordinate operations)
Basics
About Quality Management
Operations
Management (wide variety of activities in regard to overall operations
of organization)
Configuration
Management (tracking the various new versions of the products
and services)
Product Distribution, Advertising and Promotion, Sales and Service
There are several major methods you can use to get your products
or services to your customers or clients. The following link will
help you select the most appropriate method(s).
Distribution
Advertising and promotion of products and services are often
some of the most under-rated activities by new business owners.
Many people strongly believe that if they build it, buyers will
come. In this increasingly expanding and competitive marketplace,
you must ensure your products and services are prominently in
the minds of your customers and clients. This requires ongoing
advertising and promotion.
Advertising
and Promotion
Bringing
a Weird Product to Market
Christopher Van Buren: Product Launch Liftoff
Even if your products and services are prominently in the minds
of your customers and clients, you need to facilitate the process
of their buying (or, sometimes in the case of nonprofits, using)
your products and services. This often requires cultivating an
ongoing relationship with customers and clients to understand
their needs, explain how your products and services can meet those
needs, and facilitate the "closing" of the sale, that
is, where they sign "on the dotted line".
Sales
Customers are increasingly knowledgeable and intelligent in
their buying habits. Depending on the nature of the product or
service, a warranty (or promise of ongoing repair and/or support
for some period of time) can greatly reassure customers when considering
the purchase of your products.
Warranties
Not only can high-quality customer service earn a strong reputation
for your business and products, it can also support continued
purchases and revenue (and even new ideas for new products and
services) from current customers.
Customer
Service
All of the product development activities so far come down
to achieving one, ongoing major outcome:
Customer
Satisfaction
For the Category of Product Development:
To round out your knowledge of this Library topic, you may
want to review some related topics, available from the link below.
Each of the related topics includes free, online resources.
Also, scan the Recommended Books listed below. They have been
selected for their relevance and highly practical nature.