17-1

PRODUCT
DEVELOPMENT,
OPERATIONS AND
FINANCIAL PLAN
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BRAND MANAGEMENT
BRAND refers to the identity of a company,
product or an organization.
BRAND MANAGEMENT the supervision of
the tangible and intangible elements of
brand.
BRANDING the process of integrating the
strategies formed from marketing mix to
give an identity to the product or service.
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Fundamentals of Product
Development
 Product Development is a process of
developing, testing and commercializing
a product or service with four sequential
steps: (1) developing a product/service
description (2) creating a prototype (3)
testing the prototype (4) validating the
market.
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PRODUCT OR SERVICE
DESCRIPTION
 It describes how a product/services works and
how it benefits the customers.

Points to consider:
1. It should directly address the needs of the
primary target market.
2. It should highlight the features that will cater
the customer’s needs or problems.
3. Realistic superlatives could be used.
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CREATING A PROTOTYPE OF THE

PRODUCT OR SERVICE
 PROTOTYPE is a preliminary model of new product or
service that is created to test a product concept or
service process.
ADVANTAGES:
1. Enable the entrepreneur to engage in trial-and-error,
provides room for improvement, and refines the
functionality of the product design or service
process.
2. Provides a window to test the performance and
specifications of various materials and service
processes.
3. Helps the entrepreneur effectively describe the
product or service to the product team.
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Creating a Prototype
Advantages:
 Enables the entrepreneur to engage in trial-and-error
provides room for improvement.
 Provides a window to test the performance of
various materials and service.
 Helps the entrepreneur effectively describe the
product/service to the product team.
 Elicits respect from key stakeholders and
customers.
 17-7

Testing the Product Prototype

The following are the testing methods applied by the
entrepreneur:
 Focus group discussion
 Legality and ethical test

 Safety test
 Product costing test
 Component test

 Competitors’ product/ service test

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Validation of Market Acceptability

 It is the process of finding out if the intended
primary target market will be buying the product or
availing the service.

 It is a critical factor that the entrepreneur must

validate before launching the product or services.
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The 4Ms of Operations

 METHODS (An aspect which represents the day-to-
day operations of the business, the processes to be
followed in delivering product or service).

Manufacturing-is the process of translating raw

materials into finished goods that are acceptable to
customer’s standards. It consists of three elements:
a. Inputs
b. Process
c. Output
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 Manpower (the right human resources who will

handle certain business operations, usually
maximizes himself to handle all aspects of the
business)

Job Description-enumerates the duties and

responsibilities of the potential employee including
the scope, limitations and terms and conditions.
(Job title, compensation and benefit range,
responsibilities, work schedules.)
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 Machines (the technology used in efficiently

operating the business, “best friend” of manpower
in producing goods and offering services)
Equipment and Other Facilities
Telecommunications and Information Technology
a. Landline phones
b. Mobile phones
c. Laptop/ desktop
d. POS machines
e. Accounting and inventory software
f. Website
 17-12

 Materials (used in creating a product or performing a

service, which includes supply chain management)
(1) Manufacturing own products or offer services
(2) Outsourcing
-the process of appointing a third party
manufacturer to do the manufacturing operations of
the business.
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THE BUSINESS MODEL

Target high-value Satisfying the

customers customer becomes
too costly and
Offer products or irrational
services with great
value Being a market
Offer products or dealer is difficult to
services with sustain
reasonable profits
The The
Green Return on
Red Investment (ROI)
Lights Lights
 17-14

THE FINANCIAL PLAN

 This is the portion of the business plan that

speaks of the product or service
performance.
 Capital
 Collateral
 Gross Revenue
 Income Statement
 Balance Sheet
 Cash Flow Statement