The entrepreneur’s desire to establish

his business is a visible idea yet it must come

into a test whether it is a viable business
o p t i o n . I t n e e d s a c a ref u l a n a l ys i s o f
opportunity evaluation. The entrepreneur
who fails to evaluate his noble idea because
of his eagerness to plunge into the business
world often discovers later that he has more
problems to solve and at times abandons the
idea after spending his time and money.
 - refers to the ability to survive or persist. In a business
sense, that ability to survive is ultimately linked to
financial performance and position. A business is viable if

üit is gaining a profit that is sufficient to provide a return

to t h e b u s i n e s s o w n e r w h i l e a l s o m e e t i n g i t s
commitments to business creditors.
üit has sufficient cash resources to sustain itself through
a period when it is not returning a profit
Ø determines whether a business stays in
business. It also refers to the ability of a
company to use its resources to generate
revenues in excess of its expenses. It is a
company’s capability of generating profits
from its operations.
Ø r e fe r s t o t h e r e v e n u e a b u s i n e s s
generates after it pays all expenses
directly related to the generation of the
revenue, such as producing a product,
and other expenses related to the
conduct of the business activities.
Ø are those characteristics that
d ete r m i n e w h et h e ro r n o t t h e
customer is happy.
 A requirement is
that the iPad is user-
friendly, has to be
fast in data storage
and retrieval.
 1. Conceiving a new product is a process
of innovation and when this comes into
a reality, the product must be different
from an existing product.
2. New product needs customer
evaluation and this process needs
exposure to the target market as to its
economic value.
3. The entrepreneur must find a new approach to win
customer on his side if the product or service is similar
to what is existing in the community.
4. He must know the strengths and weakness of his
competitor and thereby devise a new system of
promotion and advertising such as product discounts,
cash discounts, raffles and other package of prizes.
• Some serious strategic
questions a b o u t t h e
product’s viability:

ü Is the product idea practical?

ü What obstacles or challenges lie ahead?
ü Will it need support services of some
kind to ensure customer satisfaction?
• Tactical aspects of a product and its
impact to business model:

ü If the product is large or heavy it may have high

shipping costs.
ü If customers are provided with free and fast shipping,
it willsignificantly increase the chances of winning
their loyalty.
ü If the product is small or light, it can minimize shipping
costs and satisfy customers’ desire for quick and easy
delivery.
ü Fragile products are products that can be easily
broken or damaged. It needs extra attention when
shipping to ensure they arrive in perfect condition.

ü Fragile goods will increase costs for shipping,

inventory and customer service.
ü SKU refers to color, size and other variations of a
single product. The more SKUs, the more attention,
time and money it will need to spend in tracking and
maintaining inventory, adding a level of complexity,
and to manage and distribute the product.
ü Product lifespan is the time interval from
when a product is sold to when it is discarded.
Having a consumable or disposable product is
often perceived as a great choice from a
business perspective because it improves
customers’ loyalty and, ultimately, builds repeat
sales.
ü The challenge of selling perishable products
like ice cream, frozen yogurt, fruits, etc. are
storages, shipping and production.
ü Seasonality means that there are different
levels of demand for a product throughout
the year.
ü C o n s i d e r t h e l o cat i o n o f yo u r ta rget
customers (if you’re selling internationally or
locally)
ü In managing a seasonal product, there is a
need to determine thebusiness downtime,
and work to off-set expectations and costs
during those periods.
ü Selling a product with a higher price
tag doesn’t prevent firms from
finding success.
Example, firms offering fashion
brands or luxury items are able to find
success through their product quality and
service to their customers.
ü Make sure that prices are still attainable for the
target customer.
ü To determine the market viability, maintain
functionality at the forefront of quality and luxury
ü T h e m o re n i c h e p ro d u c t s a re , t h e l e s s e r t h e
competition, thus, the more leverage a firm has to win
a large share of the market.
ü Competition can be a good thing—just be sure to
continue market viability research.
ü On top of choosing a product that’s viable
in the market, entrepreneurs should select
one that they actually enjoy or one that
solves a problem they have personally
experienced.
ü It involves the cost in getting the product
into the hands of the customer.
ü How much does it cost to bring a product
into existence?
ü Property and equipment leases
ü Loan repayments
ü Utilities
ü Salaries/wages/commissions of employees
ü The inventory itself
ü Freight costs—it is the amount you pay to transport
goods from one place to another, whether by land,
sea, or air. Shipping of the product from Point A to
Point B (Point A is the place or places at which the
product was manufactured or assembled; Point B is
the place of business—or, depending on the scenario,
the customer)
ü It might begin as simply as drawing upon your own
experience as a customer, putting yourself in the shoes
of someone who might be interested in the product
you intends to sell. Consulting with family, friends and
acquaintances who have prior familiarity with the
product is also a goodcourse of action
ü Testing the market by conducting research on a wider
scale.
ü Visit stores that sell the same product in the locality.
Take note of what is being stocked on the shelves and
the associated prices. Compare with online prices for
the same or similar products in via internet research.
ü It is about striking an attitude that
will make customers whonwant to
choose you over their other
options.
ü Offer relevant business insights in
the form of blogs or social media
p o s t s t h a t a n a l y ze t re n d s o r
aggregate data from other sources.
ü The right prices, the right attitude,
the right understanding of
customer psychology—all inform
each other and cohere into a
profitable whole.
ü Margin is the difference between total sales and the cost
of those sales.
ü Reducing business expenses can increase earnings, key to
higher margin.
ü Figure out new or improved ways to reduce costs in areas
like labor and shipping.
ü Turn to the services of “Sourcify” and other similar tools,
whi c h conne c t buddi n g e nt re p re n e u rs w i t h t h e
manufacturers that are right for them.
ü Intangible aspects of purchasing a
product that a customer expects to be
fulfilled.

Examples: on-time delivery, service

with a smile, easy-payment etc.
ü Tangible characteristics, features or
specifications that a consumer expects to
be fulfilled in the product. If a consumer is
availing a service as a product, then
various service requirements can take the
form of output requirements.

Examples: on-time arrival of a grab taxi,

loudness and clarity of a pair of speakers, etc.
ü These are the bare minimum requirements
expected by the customers; if fulfilled,
c u sto m e rs w i l l n o t b e s h ow i n g a ny
exceptional appreciation but if not fulfilled,
the customer will show dissatisfaction.

Example: A clean and decent

washroom provided by the restaurant as
part of their facility
ü These are the requirements that customers
can express their desire for, explicitly. If you
offer better or more of these satisfiers, then
the customers will appreciate it more and
will be more satisfied.

Example: the assortment of desserts in a

buffet; the customers might feel that they’re
entitled to at least two as they’ve paid heavily
for the buffet and will be happier if they get four.
ü These are the extras or the add-ons.
Absence of these will not leave the
customer dissatisfied; but adding these
would increase the customer’s satisfaction
greatly and will leave them delighted.

Example: you order a-la-carte in a

restaurant and get complimentary wine
Activity 1: DIRECTIONS: Read and analyze the statements below. Determine whether
the statement is TRUE OR FALSE. Write TRUE if the statement is correct and write
FALSE if otherwise. Write your answer in the space provided

____________1. Freight cost is the amount you pay to transport goods from one place
to another, whether by land, sea, or air.
____________2. Break-even is a point at which cost and income are equal.
___________ 3. Seasonality means that there are same levels of demands for a
product all throughout the year.
____________ 4. Black Friday shopping holiday results in highest sales in Philippines.
____________ 5. Product lifespan is the time interval from when a product is sold to
when it is discarded.
____________ 6. Fragile products can’t be easily broken or damage.
____________ 7. Customer requirements are characteristics or specifications that
should be present in a product for it to be deemed desirable by customers.
____________ 8. Revenue without profit is pointless.
___________ 9. Customer service requirements are intangible aspects of purchasing
a product that a customer expects to deliver.
____________10. Must-have customer requirements are the minimum requirements
expected by the customers.
Activity 2: Interview at least 2 members of your family. Ask them questions that will
help you find out their Service and Output Requirements as the future Customers of
your product.

Product Name:

Product Description:

Service Requirements: 1.
2.
3.
Output Requirements: 1.
2.
3.
Via Google Form