4 M’s of Operation

Method, Manpower, Machine and Materials.

Design Process Sequence

1. Method – A particular form of procedure for accomplishing or approaching something,

Develop a Product Development

Product Development – sometimes referred to as new product management, is a series of steps that
includes the conceptualization, design, development and marketing of brand new or nearly branded
products and services. The goal of product development is to develop, sustain and increase an
organizations market share by satisfying consumer demand.

The 7 Steps of Effective Product Development

1. Solicit Feedback. Now. – It is not enough to run nascent products by friends and family. Instead,
vet early-stage plans and prototypes with potential customers. (In other words, strangers). The
idea is to get people to tell you whether the product meets their needs and if, not what might
improve it. Is the product the right shape? Are buttons or the functional components is the right
place? Is it the right color? Does it perform the way people want it?.
2. Refine your design with simplicity in mind – A straight forward product design is essential. The
same goes brand continuity among every item you sell. Your product has to capture someone
attention within the first three seconds of him or her glancing at it. Quality design is the best
investment you can make. Product packaging should be clean and compelling as well, with easy
to read text. Busy packaging that explodes with colors or design elements will only frustrate
consumers. In most consumer product categories, packaging is your only communication with
customers. People need to know what you are selling from 30 feet away. When developing
packaging, consider where your product will be sold. Retailers want packaging that will not take
up too much space, and many are looking for eco-friendly options. The cost of redoing it is not
cheap.
3. Do not skimp on Materials or Manufacturing – A low cost vendor is not necessarily you best
bet. It is important not to make purchasing decisions based solely on price. You have to go for
quality and reputation. That may mean spending a little extra, given that top-shelf suppliers,
labs and manufacturers tend to charge more. Look online, attend trade shows and collect
industry recommendations. You may need to hire an agent to find a factory you are thinking of
collaborating with, even if it is 8,000 miles away. To ensure that production is adequate, create
guidelines for every manufacturing details.
4. Price it right – Many entrepreneurs fail to factor in all overhead costs, including shipping and
duties when considering pricing. Other mistakes: gauging incorrectly what consumers will be
willing to pay, not knowing where you want to sell the product and thinking you can make the
same profit margin from high and low end retailers.
5. Do not overstock – You do not run out your product. Suppliers offer discounts for larger orders.
However, tying up all your capital in inventory can turn your company into the Titanic. If you
think, you are going to sell 100 pieces, do not go and buy 1,000. Instead, buy 110.
6. Protect your ideas – Intellectual property laws can protect you only if your arm yourself
accordingly. As early as possible you should trademark your product name, purchase the
corresponding web domain and file a provisional patent application, which will not break the
bank but will allow you to stake a claim on your idea while giving you a year to file a formal
application.
7. Consider retailers and communicate wisely – Landed a meeting with your potential retailer?
You need to anticipate all questions they might lob your way so you can help them see how to
market and sell your product to their particular customer base. It is all about specificity. Keep
your pitch simple. The most effective pitches relay three concise, memorable selling points for
potential buyers. “I have to put myself in their shoes and know that they report to someone.
You do not want your presentation to be overly complex.

Eight Major Steps in the New Product Development Process.

1. Ideas – This entails generating ideas for new products. Organization can generate hundreds or
even thousands of ideas and narrow them down to just a few. Idea sources can be both internal
and external.
2. Screen Ideas – This means narrowing the ideas to select the best ones. The goal is to reduce the
number of ideas.
3. Development and Testing – The idea must now be developed into a concept. The organization
must develop the new product into different product concepts. Target consumers to discover
the value of each concept then test the new concepts.
4. Developing Market Strategy – A Target market description, value proposition and sales goals are
conceived at this time.
5. Business Analysis – This step reviews the sales, costs and profit projections of the new product
to decide if the organizational goals are met.
6. Product Development – A physical product is developed. Often, multiple versions or prototypes
are created.
7. Test Market – The product is tested in a realistic market setting. This step provides the
organization the ability to not only test the marketing, but also the product.
8. Commercialize – At this stage, the product is available for purchase in the marketplace.

Apparatus – The technical equipment or machinery needed for a particular activity or purpose.

Invention – A unique or novel device, method, composition or process.

Prototype – A first, typical or preliminary model of something, especially a machine, from which other
forms are developed or copied.

Simplicity – Something, which easy to understand or explain seems simple, in contrast to something
complicated.
Market Validation – is a series of interviews of people in your target market. These interviews are used
to test a product concept against a potential target market. A Market Validation should always be done
before introducing a product.

Market Validation can be done with a few as three or four interviews, but are more valid using a larger
data set. If you are testing a consumer product, you may want hundreds of interviews. If you are testing
a business to business product, you can often get a good market validation out of 20-30 interviews. Pick
the number of interviews that you want and multiply it by three to get the number of contacts you will
need.

You can find people interview in your target audience through a number of methods including the
following.

1. Cold Calling – The most direct method is direct cold-calling into companies. Ask for the person
with the appropriate title and tell them that you are seeking their advice on a new product.
People are more likely to talk to you if you are seeking their advice than they will be if you are
trying to sell them a product.
2. Advertising – Online Advertising is fast and very targeted. To find the right audience, use
advertising in an electronic publication that goes to your target market. You will need an
incentive for people to sign up for the interview. You can use a small gift or a drawing for a
larger price.
3. E – Mail – You can rent e-mail lists or use viral marketing to get to the right audience. If you
already know a handful of people well enough, email them. You might want to try to get people
to sign up by passing on an email. They will need an incentive for passing on the email as well as
for signing up.

Be sure to let your interviewees know when you plan to conduct the interviews. Set up appointments as
soon as possible because any appointments will end up being rescheduled. Also, be sure to let them
know how much of their time it will take.

Supplier Selection Process – Choosing the right supplier involves much more than scanning a series of
price list. Your choice will depend on a wide range of factors such as value for money, quality, reliability
and service.

What you should look for in a Supplier.

1. Reliability – Remember, if they let you down, you may let your customer down.
2. Quality – The quality of your supplies needs to be consistent your customers associate poor
quality with you, not your suppliers.
3. Value for Money – The lowest price is not always the best value for money. If you want
reliability and quality from your suppliers, you will have to decide how much you are willing to
pay for your suppliers and the balance you want to strike between cost, reliability, quality and
service.
4. Strong Service and Clear Communication – You need your suppliers to deliver on time, or to be
honest and give you plenty of warning if they cannot. The best suppliers will want to talk with
you regularly to find out what needs you have and how they can serve you better.
5. Financial Security – It is always worth making sure your suppliers has sufficiently strong cash
flow to deliver what you want, when you need it. A credit check will help reassure you that they
will not go out of business when you need them most.
6. A partnership approach – A strong relationship will benefit both sides. You want your suppliers
to acknowledge how important your business is to them, so they make every effort to provide
the best service possible. Moreover, you are more likely to create this response by showing your
supplier how important they are to your business.

Identifying Potential Suppliers – You can find suppliers through a variety of channels. It is best to build
up a shortlist of possible suppliers through a combination of sources to give you a broader base to
choose from.

Recommendations – Ask friends and business acquaintance. You more likely to get an honest
assessment of a business strengths and weaknesses from someone who has used its services.

Directories – If you are looking for a supplier in your local area, it is worth trying directories.

Trade Associations – If your needs are specific to a particular trade or industry, there will probably be a
trade association that can match you with suitable suppliers.

Business Advisors – Local business support organizations, such as chambers of commerce, can often
point you in direction of potential suppliers. You can also contact our strategic information centre.

Exhibitions – Offer a great opportunity to talk with a number of potential suppliers in the same place at
the same time. Before you go to an exhibition, it is a good idea to check that the exhibitors are relevant
and suitable for your business.

Trade press – Trade magazines feature advertisements from potential suppliers. You can contact our
Strategic Information Centre for a list of specialist trade magazines.

Choosing a supplier – Once you have a manageable shortlist, you can approach the potential suppliers
and ask for a written quotation and if, appropriate, a sample. It is best to provide them with a clear brief
summarizing what you require, how frequently you will require it and what level of business you hope to
place.

Get a quotation – It is worth asking potential suppliers to give you a firm price in writing for, say, three
months. You can also ask about discounts for long term or high volume contracts.

Financial Projections – Estimates of the future financial performance of a business.

Gross Profit – A company’s total revenue (equivalent to total sales) minus the cost of goods sold.

Income Statement – A financial document generated monthly and or annually that reports the earnings
of a company by stating all relevant revenues (or gross income) and expenses in order to calculate net
income.

Revenue – The amount of money that a company actually receives during a specific period, including
discounts and deductions for returned merchandise.

Shortlist – A limited list important items or individuals; especially: a list of candidates for final
consideration.
Supplier – A party that supplies goods and services.

Value Chain – A set of activities that a firm operating in a specific industry performs in order to deliver a
valuable product or service for the market.

Variable costs – Those things that change based on the amount of product being made and are incurred
as a direct result of producing the product.