THE PRODUCT IS THE

PHYSICAL OUTPUT OF THE

WHOLE PRODUCTION PROCESS.
A HETEROGENEOUS PRODUCT HAS DISSIMILAR
CHARACTERISTICS, PARTS, AND PHYSICAL APPEARANCE.
IT CAN BE EASILY IDENTIFIED FROM OTHER PRODUCTS.

HOMOGENEOUS PRODUCT HAS A PHYSICAL

APPEARANCE, TASTE, OR CHEMICAL CONTENT
THAT CAN HARDLY BE DISTINGUISHED FROM THAT
OF THE OTHER PRODUCTS. BUSINESSES THAT
PRODUCE HOMOGENEOUS PRODUCTS INCLUDE
MAKERS OF SOFT DRINKS, AND MEDICINES.
PRODUCT DESCRIPTION

• promotes and explains what a product is and why

it’s worth buying. The purpose of a product
description is to provide customers with details
around the features and benefits of the product so
they’re obliged to buy.
• Know who your target market is, focus on the product
benefits, tell the full story, use natural language and
tone, use power words that sell, and use good images.
These are guidelines for you to have a good product
description; since some customers are very particular
with it since they consider the welfare of their family,
if it is safe to use
 PROTOTYPE

• A prototype is a duplication of a product as it will be

produced, which may contain such details as color,
graphics, packaging and directions. Benefits are the
reasons why customers will decide to buy the products
such as affordability, efficiency or ease of use. The
features of the product or service merely provide a
descriptive fact about the product or service.
• Prototype is created before the massive production
of such product; an entrepreneur must consider
prototyping. One of the important early steps in the
inventing process is making a prototype
CUSTOMERS ARE ALWAYS RIGHT.

• The entrepreneur’s main concern is the satisfaction

of a customer, for they are the life blood of the
business. Without them, all the efforts, will be
wasted as well as the chance to venture into a new
business.
 SUPPLIER

• In a manufacturing venture, the supplier plays a vital role. They

are your business partners, without them your business will not
live. You need them as much as you need your customers to be
satisfied. But as an entrepreneur you have to choose a potential
supplier who has loyalty and values your partnership:

• a supplier who would lead you to the fulfillment of your business

objectives, mission and vision.
VALUE CHAIN IS A METHOD OR ACTIVITIES
BY WHICH A COMPANY ADDS VALUE TO AN
ITEM, WITH PRODUCTION, MARKETING,
AND THE PROVISION OF AFTER-SALES
SERVICE. THE MAIN GOAL AND BENEFIT OF
A VALUE CHAIN, AND THEREFORE VALUE
CHAIN ANALYSIS, IS TO MAKE OR SUPPORT
A COMPETITIVE BENEFIT.
A SUPPLY CHAIN IS A STRUCTURE OF ORGANIZATIONS, PEOPLE,
ACTIVITIES, DATA, AND RESOURCES INVOLVED IN MOVING A
PRODUCT OR SERVICE FROM SUPPLIER TO CUSTOMER.

• The main objective of supply chain management includes

management of a varied range of components and
procedures, for instance, storing of raw materials, handling
the inventory, warehousing, and movement of finished
product from the point of processing to the point of
consumption.
 ACTIVITY 1

“In your home, when you want to eat egg sandwich before going to school,
your mother would surely prepare it for you. Your egg sandwich would not be
produced without a process.”
1. Who would be your manpower? _______________________________
2. What would be your materials? ________________________________
3. What machines or tools would you use? _________________________
4. What methods are needed to produce the egg sandwich? (Cooking procedure
enumerate them).
BUSINESS MODEL
• Business model describes the factors of how an
organization creates, delivers, and captures value in
economic, social, cultural or other contexts. The
development of business model construction and
variation is also called business model innovation
and forms part of a business plan.
•It is a company's plan on how it will make
revenues and make a profit. It describes what
products or services the business plans to
manufacture and market, and how it plans to
do so, as well as what expenses it will incur.
A BUSINESS MODEL IS AN OUTLINE FOR HOW YOUR
COMPANY PLANS TO MAKE MONEY. IN GENERAL, A
BUSINESS MODEL EXPLAINS FOUR THINGS:

• What product or service a company will sell.

• How it intends to market that product or service.
• What kind of expenses the company will face.
• How the company expects to turn a profit.
TYPES OF BUSINESS MODELS AND
EXAMPLES
Retailer model
• A retailer is the last link in the supply chain. These
businesses purchase goods from manufacturers or
distributors and then sell them to customers for a price
that will both cover expenses and turn a profit
• Examples: Many of the businesses you patronize day to
day are probably retailers, from grocery stores to
pharmacies.
Manufacturer model
• A manufacturer converts raw materials into products.
Then, they sell those products to distributors, retailers or
directly to consumers.
• Example: Manufacturing businesses build everything
from furniture to pharmaceuticals. They can be
companies of any size and in almost any industry.
Fee-for-service model
A fee-for-service is just what it sounds like: A business charges a set fee for a
specific service. A business set up on this model can increase its earnings by
doing work for additional clients or by raising its rates.
Depending on what type of work the business does, it might charge an hourly
rate, monthly retainer or commission. It may also create a fee schedule with a
set rate for different types of services.
Example: Hairstylists, accountants and real estate agents all charge fees for
their specialized services. They may work independently or be affiliated with
a salon, office or brokerage that provides resources in exchange for a
percentage of their earnings.
Subscription model
• A subscription business model can be applied to both traditional brick-and-
mortar stores and e-commerce businesses alike. Essentially, the customer
makes a recurring payment for ongoing access to a service or product. A
company may directly ship its product in the mail, or you may pay a fee to
use its services.
• Example: Many local farms offer farm shares or community-supported
agriculture subscriptions, where clients get access to fresh produce on an
ongoing basis while crops are in season.
Bundling model
• The bundling business model involves companies selling two or more products
together as a single unit, often for a lower price than they would charge selling
the products separately.
• This type of business model allows companies to generate a greater volume of
sales and perhaps market products or services that are more difficult to sell.
However, profit margins often shrink since businesses sell the products for less.
• Example: Many class-based fitness centers and gyms use a type of bundling
model, where clients pay fees for a certain number of classes per month. The
more classes a client buys, the cheaper each individual class becomes, even
though their total spend increases.
Product-as-a-service model
• Product-as-a-service businesses charge customers to use
physical products. They may charge a subscription fee, a
per-use or per-mile fee, or a combination of both.
• Example: Bike rental companies offer products as a
service. Customers might pay an annual membership fee
plus a per-mile fee each time they ride, or they might
have the option to rent a bike for the day.
Leasing model
• Under a leasing business model, a company buys a product from a seller. That
company then allows another company to use the product they purchased for a
recurring fee. Leasing agreements are usually most efficient with big-ticket items
like manufacturing and medical equipment, but some companies lease smaller items
too.
• Leasing is similar to the product-as-a-service business model, but leases usually
have longer terms — days or weeks compared to minutes or hours. Leasing
companies are unlikely to charge a subscription or membership fee for access to
their products.
• Example: A business that rents machinery like backhoes, augers and dozers to
individuals for their home construction projects is using a leasing business model.
Franchise model
• A franchise is an established business blueprint that a franchisee purchases
and reproduces. The franchiser, or original owner, works with the franchisee
to help them with financing, marketing and other business operations to
ensure the business functions as it should. In return, the franchisee pays the
franchiser a percentage of the profits.
• Example: Domino’s, Anytime Fitness and Ace Hardware are all examples of
the franchise model.
Distribution model
• A company operating as a distributor is responsible for taking manufactured
goods to the market. To make a profit, distributors buy the product in bulk
and sell it to retailers at a higher price.
• Example: A chain of beauty salons that buys supplies in bulk and sells some
of them to other salons is using a distribution business model, though they
may have other revenue streams too.