NEW PRODUCT DEVELOPMENT

The Entrepreneurial Mind

A creative mind imagines and builds a product that customers will find useful. It also creates a
product that is appealing to the senses of sight, touch, smell, sound, and taste. It also develops a
product that elicits emotional attachment and eventually becomes a big part of the consumer's
personal expression.

The technical mind is the inventor of technology. Although the entrepreneur may not have a
technical mind, this is what motivates him or her to turn new information into something practical and
operational. A technological adaptor is also a technical mind. He or she applies old knowledge to
new applications in a variety of industries. Finally, the technical mind is a renderer of technology. He
or she resolves to configure and reconfigure the technological design of a new product to make it
work for the product creator.

By generating market space for new products, the business mind leverages their potential. In
order to maximize the market value of the new product, it also arranges sufficient forces and
resources to develop, launch, and sell it. Beyond the product development process, the business
mind also handles the new product's external and internal business environment.

Let us use the development of a new product as an example of how the creative mind, the
technical mind, and the business mind are used.

Sample Illustration 1: The Lampturn

Two MBA students embarked on their venture thesis. They were Ronaldo Pingol and
Cristina Pastrana. They developed a new product called Lampturn.

Essentially, this new product was a desk lanter that reflected colorful and moving
images onto the lantern screen. The product was positioned as a novelty night lamp for
children's bedrooms or a mood lamp for living rooms. The images were illuminated on the
lampscreen by an electric bulb of small-wattage. As the lamp was lit, the heat of the lamp
caused the lamp to turn. While the screen revolved around the four sides of the rectangular
lamp, an illusion of changing shapes and sizes was created while the images moved from
one end of the screen to another.

The creative minds of Pingol and Pastrana were activated as they searched for a
novelty product for their venture thesis. They were intrigued by the reflector/projector
lanterns in three movies: The Little Mermaid, Up Close and Personal, and Eye for an Eye.

Their technical minds were challenged. They had no technological backgrounds. They
did not possess the skills to fashion such lamps. They had to figure out how to make the
lamps turn, how to make their screens and how to make the images mesmerizing for
children and adults alike.

Their business minds were also put to the test. Who would be their best target market?
How would they market the lamp? Who could make the lamp for them once they developed
the prototype? How could they raise the funds for the project? Could they produce the lamp
at a cost that would generate profits for them?
Product Conceptualization and the Creative Mind
With its theatrical display of images, the lamp was designed to generate mood and
environment, delight and intrigue viewers, and act as a highlight for interiors." It might be utilized as
a nightlight, a pacifier for a child, or a decorative and conversational piece.

In the middle of the darkness, the highly colorful and dynamic shapes, and the pictures and
mood-evoking environment, the use of light enhanced Lampturn's sensorial-emotional appeal. The
purpose of Lampturn is to make people feel wonderful.

Lampturn has an obvious aesthetic attraction. The meaning of the lamp images would have a
big impact on how the lamp may be elevated to self-actualization. It would also depend on the
desired state of the seller which the lamp should produce.

Product Development and the Technical Mind

The technical mind must intervene to offer the quality and performance criteria through
technology in order to translate the product concept into a practical product.

In the instance of Lampturn, the product was just a matter of putting existing technology to use
(or technology rendering). What the business owners needed to do was adapt the current
technology to their product concept.

During their search for the right technology for their product concept, the entrepreneurs ran into
a number of roadblocks. First and foremost, the product must resemble the movie lantern. Second,
the lamp should be durable and secure enough to be placed in a child's room. Third, the lamp should
be simple to move and show. Fourth, the lantern must be reasonably simple to construct in order to
facilitate duplication and mass production. Fifth, the light must be constructed using low-cost
materials.

Product Launch and the Business Mind

The business mind takes the product from the prototype stage to production and then to its
final destination, the marketplace. For commercial purposes, the product must be made shop-ready.

The business mind must figure out how to increase product sales to the target market in the
most efficient way possible. It's crucial to hire and deploy the correct distribution and salesforce.

The next phase in the Lampturn example was to test market the product prototype once the
entrepreneurs accepted the final prototype. The test was divided into two parts. Two focus group
discussions (FGDs) and selling activities at Christmas bazaars comprised the first phase. The
second phase involves placing and selling the lantern at various locations to establish its pricing.

To increase turnover, novelty retailers often priced the lantern between P2,895.00 and
P1,200.00. The product was priced between P1,200.00 and P1,400.00 in home decor stores
(although one store was able to sell them at P2,000.00 per lantern). It was simple to sell the
merchandise to the retailers. In the first 23 days, 58 units were sold, showing a promising market.

The entrepreneurs positioned the product as a home decor piece, for children's bedrooms or
living room displays, and for women aged 15 to 50, based on their test marketing experience. The
findings of the second test marketing phase enabled the entrepreneurs to make a good marketing
plan that would maximize their revenues and profits.

Sample Illustration 2: New Improved Product

 Two entrepreneurs, Geraldine Domingo and Carla Ortega wanted to improve an
existing product, that is, the fried garlic in oil (FGO) otherwise known as "Crunchy
Bawang." The product was commanding a higher price of P180 per bottle although they
thought it could be substantially upgraded.

The two entrepreneurs bought several bottles of the existing FGO and decided to
conduct taste tests and interviews at a school cafeteria of graduate students to determine the
positive and negative attributes and features of the product. One hundred respondents were
chosen during lunchtime. The respondents liked the peculiar garlic taste (67%), its
crunchiness and texture (92%), and the bottled convenience it offered (56%). What they
disliked about the product was its relatively bland taste (74%) compared to fresh products,
its oiliness (71%), and its food safety aspects (38%) because there was no expiration date,
no manufacturer's name, its poor packaging, and no details on the ingredients. Eighty nine
percent said they would buy the product while 11% said no. The preferred prices were
between P76.00 and P100.00 (74%), P100.00 to P125.00 (11%), P125.00 to P150.00 (8%),
P50.00 to P15 (5%) and P151.00 to P175.00 (2%).

In terms of usage, the entrepreneurs discovered that 33% used the FGO as rice
toppings while 67% placed it on their plates beside the viand. The entrepreneurs also
interviewed the buyers of the existing FGO by waiting for them near the store selling the
FGO. They found out that the buyers regularly bought the FGO to enhance the taste of their
cooked food. The buyers also did not like the oiliness of the FGO and its high price,
although the convenience seemed to make up for the price.

The two processes allowed the entrepreneurs to conclude that: (1) there was a good
demand for the product; (2) the product could be improved by lessening the oil, enhancing
the taste, and coming up with a better package; and (3) customers could buy a bigger
volume if the prices were lower:

From the taste test and interviews of FGO buyers, the entrepreneurs plunged into the
product development stage. This consisted of three parts: (1) preliminary testing; (2)
establishment of specifications for the product; and (3) standardization of the production
process.

Part 1: Preliminary Testing

The entrepreneurs interviewed food experts and examined food processing literature in the first
portion of the project. "Fried garlic soaked in oil and enclosed in a bottle as a food system was
exceedingly unstable," they were warned. They realized that the cooking oil needed to be
replenished on a regular basis. There was also the risk of undercooking fried food on the inside.
These findings and other such recommendations propelled the entrepreneurs to conduct several
experiments to determine the following:

o The right garlic size and shape that would be the easiest to cook and the most
pleasing in appearance;
o The expected yield of FGO from one kilo of unpeeled garlic;
o The right frying temperature;
 o The minimum peeling time for garlic; and
o The minimum mincing time for garlic.

Part 2: Establishment of Specifications for the Product

The entrepreneurs defined the exact requirements for the product based on the raw material
and the vegetable oil in the second phase of product development. The entrepreneurs chose four
different types of garlic to utilize, as well as two different types of vegetable oil (after eliminating the
very expensive oils for cost reduction purposes).

In terms of methodology, the entrepreneurs assembled a panel of 25 third and fourth-year food
technology students from a prestigious university. Using the Analysis of Variance or ANOVA
approach, the taste test on the 25 panelists was conducted to evaluate the optimal color, odor,
crunchiness, flavor, and acceptance of the FGO. The ANOVA approach tallied the taste test findings
and assessed if the mean scores given by the test results were statistically different. This was
accomplished by positing the null hypothesis that no difference existed between the mean scores of
the various alternatives investigated.

The entrepreneurs chose the desired garlic variety and the right vegetable oil based on the
results of the product test. Food technologists, not consumers, were needed for this section of the
product testing process since they were better informed about the technical characteristics of color,
odor, texture, flavor, and crunchiness. Moreover, their taste buds were deemed more sophisticated
because of their training and exposure to different types of food and cooking styles.

Part 3: Standardization of the Production Process

The standardization of the entire food preparation and cooking process was the third phase of
product development. The entrepreneurs intended to standardize the frying time, the best oil to use,
the best oil recycling frequency, and the best calcium chloride soaking time. The results of the
entrepreneurs' numerous tests were once again presented to food technologists. The mean scores
of the test results were tabulated and they were, again, subjected to the ANOVA method to
determine their statistical significance.

Finally, once the entrepreneurs were confident that they had identified the best FGO to
produce and commercialize, they created the entire FGO manufacturing process. This was broken
down into three stages: (1) pre-frying, (2) frying, and (3) post-frying. The entrepreneurs were able to
become more efficient in converting production input into output thanks to this work procedure