Chapter 10 notes.docx

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Northeastern University
Business Administration
BUSN 1101
William Shimer

Chapter 10: Product Design and Development Product - Something that can be marketed to customers because it provides a benefit and satisfies a need. Types of Product Developments • New-to-the-Market Products • New to the company • Entrepreneurial Start-Ups o Characterized by innovative products o Goals include profitability and growth o Focuses on new opportunities o Owners are willing to take risks • How to take a calculated risk o Decisions making regarding new products can be improved with input from  Information gathered from research  Knowledge gained from personal experience Sources of New Product Ideas • Entrepreneurs and small business owners • Solicit ideas from people within the organization o Marketing o Sales o Research o Manufacturing • Entrepreneurial units • Speak with people the outside organization o Customers o Competition Sales from New Products Customers - buy products to fill unmet needs and because they expect to derive some value or benefit from them Identifying Business Opportunities • Utility • Time utility. The value to a consumer of having a good or a service available at a convenient time. A concessionaire selling bottled water at a summer concert is making liquid refreshment available when it’s needed. • Place utility. The value to a consumer of having a product available in a convenient location. A street vendor selling hotdogs outside an office building is making fast food available where it’s needed. • Ownership utility. Value created by transferring a product’s ownership. A real estate agent helping a young couple buy
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