HOLY ROSARY ACADEMY OF LAS PIÑAS CITY
HELE/TLE/ TECHVOC DEPARTMENT
TEACHER:
MS. SHERYLYN
SUBJECT/LEVEL: ENTREPRENEURSHIP 11 (2ND QUARTER)
Lesson 1:
FUNDAMENTALS OF PRODUCT DEVELOPMENT
Lesson Description:
This Lesson will introduce you to the fundamentals of product development and the operational
requirements of a business represented by the 4Ms – manpower, method, machine and materials. You
should learn the methods before commercializing or launching to the product or service.
Lesson Objectives:
At the end of the lesson, students are expected to:
1. Understand and be able to discuss the fundamentals of product development
2. Familiarize with the 4 sequential steps of product development
Content:
FUNDAMENTALS OF PRODUCT DEVELOPMENT:
First, let’s define Product Development – it is the process of developing, testing and commercializing a
product or service with the ultimate objective of solving the problem of the primary target market.
It is composed of four sequential steps:
1) Developing a product or service description
2) Creating a prototype
3) Testing the prototype
4) Validating the market
Let’s discuss each step for easy understanding:
1) DEVELOPING A PRODUCT OR SERVICE DESCRIPTION  The product or service description simply describes how a product or service works and how
it benefits the customers. A clear product or service description is important because this will
serve the blueprint of all business operations.
The following are the tips in developing a product or service description:
1) It should directly address the primary target market in a personal manner using everyday
language. The entrepreneur should put himself or herself in the customer’s shoes, where the
product description will be addressed to.
2) It should highlight the features that will cater to the customer’s needs or address the customer’s
problems.
3) Realistic superlatives should be used for the product description.
2) CREATING A PROTOTYPE OF THE PRODUCT OR SERVICE
After defining the product or service, the entrepreneur will proceed with one of the most exciting
but also very challenging part of the product or service development: the creation of a prototype.
What is a PROTOTYPE?
A prototype is a preliminary model or sample of a new product or service that is created to test a
product concept or service process. This is an exciting process for the entrepreneur because he or she will
be able to see that his or her ideas will soon become a tangible reality. The entrepreneur’s creativity and
ingenuity will be used in creating the prototype.
What are the advantages of creating a prototype first before proceeding the full
implementation/commercialization of the product or service?
1. Creating a prototype enables the entrepreneur to engage in trial-and-error, provide room for
improvements, and refines the functionality of the product design or service process.
2. Creating a prototype provides the entrepreneur a window to test the performance and
specifications of various materials and service processes. Every detail of the product or service
should be scrutinized carefully .
3. A prototype helps the entrepreneur effectively describe the product or service to the product
team. Members of the product team include marketing, operations, engineers, suppliers,
business partners and legal and human resources. It provides the product team the information
needed to create the right product or service as planned.
4. Creating a prototype elicits respect from key stakeholders and customers. At the same time, a
prototype gives credibility to the entrepreneur. Some entrepreneurs only present vague and big
ideas but not details as to its feasibility and implementation
 Creating prototype is the stage where the entrepreneur can experiment, develop and make
some improvements in the potential product or service. The objective of the entrepreneur at
this stage is to verify if the product or service concept will work at the simplest, fastest and
cheapest way.
3. TESTING THE PRODUCT PROTOTYPE
 All the efforts exerted in the creation of a prototype will be put to waste if the prototype will
not be tested. Testing the prototype is a vital process before an actual product or service is
launched to the market.
 Testing the prototype will uncover the final loopholes that need to be fixed before
commercialization. It gives the entrepreneur a leeway to examine and scrutinize the prototype
and provide feedback as to what can be improved before the launch. These improvements and
changes must be completed first before moving forward to the next step.
 For a prototype that has already been refined, testing it for the last time after the changes
have been made will validate its readiness for commercialization.
The following testing methods are applied by the entrepreneur:
1. Focus group discussion – The participants will provide relevant insights about the new
product or service. The objective of the FGD is to identity errors, deficiencies and issues that
may impede the success of the product. Participants also need to provide suggestions and
practical solutions on how to improve these deficiencies.
2. Legality and ethical test – Prior to launching, the entrepreneur must ensure that the product
or service complies with all relevant laws and regulations and has a necessary license or permit
to operate a particular business.
For example, food products must be cleared first with the Bureau of Food and Drugs
(BFAD) before they are offered to the public. The entrepreneur must also make sure that the
manufacturing/production of goods or offering of the service does not generate ethical issues
such as being threat to health, safety and environment.
3.Safety Test – The entrepreneur must ensure that the product is safe to use, safe to be
consumed (food and beverages), and is safe to be applied (cosmetic products). The product
should not in any way harm the customer or put the customer in peculiar situations. In services,
the entrepreneur must ensure that the processes to be performed by the service provider must
not be detrimental to the safety and health of the customer.
4. Product costing test – The entrepreneur must examine every stage of the manufacturing
process or every process of the service blueprint to evaluate and finalize the costs involved. This
is the time when the entrepreneur can match the expected costs versus his or her budget.
Modification in the manufacturing process or service blueprint can still be made at this point to
align with the cost objective of the entrepreneur.
5.Component test – Each component of the product or service must be tested independently
to identify component failures for goods or service failures for services. Any failure identified
must be redesigned and tested again until it becomes fully operational and functional.
6.Competitors’ product /service test – The entrepreneur must test a similar line of products
or the competitors’ product or service itself to compare and get the best practices to be applied
to the new product or service.
 Testing the product prototype is mandatory to ensure that the product or service will not fail the
customers and will deliver its definitive purpose. This will elicit customer satisfaction and
eventually, customer loyalty and retention.
 This is the time to prove that the concept formulated by the entrepreneur will work and is feasible
in real life. All the mistakes accounted for and the improvements to be fixed should be performed
first prior to commercialization of the product or service.
4. VALIDATION OF MARKET ACCEPTABILITY
Validation of market acceptability is the process of finding out if the intended primary
target market will be buying the product or availing the service.
Market acceptability is a critical factor that the entrepreneur must validate before launching
the product or service, because this can strongly suggest if the business will be successful
or not.
It either validates or disconfirms the perception of the entrepreneur about the sustainability
of the chosen primary target.
This is also the time to deeply understand the value that the product or service brings to the
customer and their prospective purchase behavior, because it helps the entrepreneur build
a more relevant and meaningful product or service
This process is the last step before the product or service can be introduced to the market.
References:
1) Batisan, Ronaldo S., Entrepreneurship DIWA Senior High School Series, Diwa Textbooks
2) Edralin, Dr.Divina M., Entrepreneurship K-12 Revised Edition, Vibal Publishing House