This module is designed and written with you in mind.

It is based on the
Most Essential Learning Competencies (MELCs). It is here to help you master this
applied subject on Entrepreneurship.

It contains information about new product development. It includes

activities that will help you develop a new product, create product prototype, test
product prototype and validate product descriptions to market.

This should be accomplished within a week. All activities that require online

submission should be coordinated with your teacher. Save the date for your online

class and be updated with teachers announcements in the google classroom or FB

messenger.

Content Standard: The learner demonstrates understanding of environment and

market in one’s locality/town.

Performance Standard: The learner independently creates a business vicinity map

reflective of potential markets in one’s locality/town.

Objectives

1. Identify the stages of product development;

2. Create and test the product prototype; and
3. Follow steps in developing a business model for the proposed business.

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Matching Type. Match the word in Column A with its corresponding description
in Column B. Write the letter of your answer in your notebook.

COLUMN A COLUMN B

______1. Idea A. find ways to best meet the needs of potential

market

______2. Business Model B. creation of product prototype and description

______3. Product Prototype C. the launching of product into the market

______4. Product Description D. focused on the usage of the product

______5. Research E. a design for a successful operations of the

business

______6. Analysis F. a mock-up, model of simple simulation of a

product

______7. Testing G. concept

______8. Functional Prototype H. contains features and benefits of a product

______9. Product Introduction I. decisions to be made based on product testing

______10. Product development J. the use of small group of actual consumers

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 It is encouraged that every entrepreneur come up with a new product or
service that will address the changing needs and wants of consumers. This lesson
will discuss the phases of new product development from idea generation to market
introduction.

What is new product development?

● It is a complete process of bringing a new product or service to the market.

It may be a consumable or business product.
● It may be done to develop an item to compete with a particular product or
may be done to improve an already established product.
● Developing a new product involves a number of stages which typically center
around the following key areas:

1. The Idea: Every product has to start with an idea. In some cases, this might
be fairly simple, basing the new product on something similar that already
exists. In other cases, it may be something revolutionary and unique, which
may mean the idea generation part of the process is much more involved. In
fact, many of the leading manufacturers will have whole departments that
focus solely on the task of coming up with ‘the next big thing’.

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2. Research: An organization may have plenty of ideas for a new product, but
once it has selected the best of them, the next step is to start researching the
market. This enables them to see if there’s likely to be a demand for this type
of product, and also what specific features need to be developed in order to
best meet the needs of this potential market.

3. Development: The next stage is the development of the product. Prototypes

may be modified through various design and manufacturing stages in order
to come up with a finished product that consumers will want to buy.
Product description is also developed in this stage.

Creating a product prototype

● A prototype is a basic working model, mock-up or a simple

simulation of the product which leads us to create a minimal viable
product to final product and variations.
● The main reason for prototyping is to validate the idea and this is the
step in converting an idea to a real product.
● A prototype could be a working model, representational (non-working)
model, miniature or a scale model, video or a photo demonstration
based on the factors like a problem to be solved, the mandate of the
end customer, investor/industry requirements or prototype that best
satisfies the purpose.
● These prototypes can fall into one of the following areas: functional,
display or a small model. The functional prototype focuses on the
functions and not on the looks. The display prototype focuses on the
looks and not so much on the function. The small model combines
both and is a smaller version of the final product. The type of
prototype to develop must be decided based on the intended purpose
of the prototype, the medium of use and the expected longevity of the
prototype.

How to Develop a Product Description?

A product description is the marketing copy that explains what a

product is and why it's worth purchasing. The purpose of a product
description is to supply customers with important information about the
features and benefits of the product so they're compelled to buy. Convincing

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 your customers to buy your product is one of the challenges in production
and operations. Writing an effective product description will help you sell
without talking too much.

a. Know your target audience

b. Focus on the Product benefits
c. Use emotional hooks
d. Use Natural Language and tone
e. Use power words that sell
f. Make it Easy to Scan
g. Optimize for Search engines
h. Use good images

4. Testing: Before most products are launched and the manufacturer spends a
large amount of money on production and promotion, most companies will
test their new product with a small group of actual consumers. This helps to
make sure that they have a viable product that will be profitable, and that
there are no changes that need to be made before it’s launched.

Product Concept Testing

It is the process of using quantitative and qualitative methods to evaluate

consumer response to a product idea prior to the introduction of the product
to the market. To do this, you have to determine critical success factors,
financial objectives, marketing mix (4Ps) and marketing plan activities
(activity, budget and timing).

Testing the Product Prototype

● Testing a prototype / developed design is a very important part of the

design and manufacturing process. Testing and evaluation, simply
confirms that the product will work as it is supposed to, or if it needs
refinement.
● In general, testing a prototype allows the designer and client to assess
the viability of a design. Will it be successful as a commercial
product? Testing also helps identify potential faults, which in turn
allow the designer to make improvements.

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 Reasons for testing and evaluating product prototype

1. It allows customers to give views, opinions and suggest improvements.

2. Safety issues, relevant regulations and legislations are identified,
thoroughly tested and evaluated.
3. It allows production costs to be assessed and finalized.
5. Analysis: Looking at the feedback from consumer testing enables the
manufacturer to make any necessary changes to the product, and also
decide how they are going to launch it to the market. With information from
real consumers, they will be able to make a number of strategic decisions
that will be crucial to the product’s success, including what price to sell at
and how the product will be marketed.

6. Introduction: Finally, when a product has made it all the way through the
new product development stage, the only thing left to do is introduce it to
the market. Once this is done, good product life cycle management will
ensure the manufacturer makes the most of all their effort and investment.

Creating a Business Model

Business model refers to the mode by which the product concept seeks to
make money so that it can have a sustainable operation. You can think of a
business as a machine that generates revenues. In order for it to continue
going, it should be generating enough revenue to cover both its costs of
operations, as well as providing a decent return on investment. If the
business cannot accomplish this, then it will not survive.

The concept of a business model canvas is extremely useful for companies

big and small, tall and
wide.

Along the pathway

to entrepreneurship and
entrepreneurial success,
filling out your own
business model canvas
can be a crucial activity to
help you understand your

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 own business model in a simplistic, yet easily identifiable manner.

In essence, a business model canvas is a chart-like template that is

separated into 9 pillars. These are the foundation of a company’s business
model. It is a strategic management tool that summarizes and describes
these pillars.

Activity 2.1. Think of a product/service you want to introduce in the market by

accomplishing the New Product/Service template below.

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Activity 2.2. Create a product prototype or a service process design and paste it in
the worksheet below. List down all the raw materials, packaging materials and
labor cost on its corresponding boxes. Write down also the steps on how you will
test your
product
and what are
your expected
feedbacks
from the
customers.

Activity 2.3. Watch the details on how to create a business model in the given
youtube link, The Business Model Canvas - 9 Steps to Creating a Successful
Business Model - Startup Tips . Write a business model for your proposed
business following the template given on page 7. Encode your output in a word
document file for submission in the google classroom.

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 ● The reason for new product development is to compete with a particular
product or may be done to improve an already established product.
● Product development follows several stages such as generating ideas,
research, product development, testing, analysis and product introduction.
● Product development includes product prototype and product description.
● Creation of product prototype may be functional, display or small model.
● A business model describes the rationale of how an organization creates,
delivers, and captures value, in economic, social, cultural or other contexts.

Answer the following questions in a complete statement. Write your answer in your
notebook.
1. Why is there a need for new product development?
________________________________________________________________________
2. How do you create and test a product prototype?
________________________________________________________________________
3. Give three importance of developing a business model.
________________________________________________________________________

Matching Type. Match the word in Column A with its corresponding description
in Column B. Write your answer in your notebook.

COLUMN A COLUMN B

______1. Idea A. find ways to best meet the needs of potential

market

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______2. Business Model B. creation of product prototype and description

______3. Product Prototype C. the launching of product into the market

______4. Product Description D. focused on the usage of the product

______5. Research E. a design for a successful operations of the

business

______6. Analysis F. a mock-up, model of simple simulation of a

product

______7. Testing G. concept

______8. Functional Prototype H. contains features and benefits of a product

______9. Product Introduction I. decisions to be made based on product testing

______10. Product development J. the use of small group of actual consumers

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