Choosing
an Idea:
Establishing
yourself as a successful entrepreneur depends, in part upon choosing a good
idea. That idea must only be good for the market, but good for the project and
good for the entrepreneurs. It should also be manageable by you without much
dependence on others. Importantly the idea should give satisfying results to you.
As
an entrepreneur when you are searching for an idea worthy of your commitment
don’t pursue one idea at a time. Develop five or ten in parallel until one
emerges so appropriate that it begins to dominate your thoughts and fantasies.
Choice
of a product:
The
product was first introduced in the late 60’s and the concept of a sanitary
napkin was popularized through the 70s while the 80s introduced new variations
like beltless napkin and tampons.
Since
the very concept of a sanitary napkin was so new to India, one realized that
conventional retailing alone was not enough to sell the product. What was
important was educating women about the product and about personal hygiene, so
the manufacturers started schools, screening firms on menstruation and how to
cope with it. This was followed up by free sampling.
Estimated
to be a growing Rs.30 crore industry (that’s an astonishing 180 million pieces)
with a growth rate of more than 15 percent, manufacturers are unanimous that
this still just the tip of the iceberg. It is likely to scale new heights in
the 90s.
The
market leaders and pioneer in the field is undoubtedly Johnson and Johnson with
Carefree, Stayfree, OB tampons and now Fresh day Panty liners
OBSERVATIONS
With
the constant awareness campaign the entrepreneurs have targeted the consumers
and made an impact on them. The product has a ready market. Technology is
available. Raw material is in plenty. With the widening of the market the
demand for the product has increased many fold. It is profitable. It is
healthier, comfortable and socially accepted. Market is vast but tricky. The
product is tempting entrepreneurs/ manufactures to step into this field.
SELECTION
OF PRODUCT
At
this stage, the entrepreneur is concerned with identifying a particular product
that he hopes to market successfully at a reasonable profit. Therefore the
selection of the right product is very essential for being successful in the
business venture. The right product here means that which can be marketed at a
reasonable profit which will go towards growth business.
THE
ADOPTION PROCESS:
The
adoption of an innovation demands planned management of change (overcoming the
resistance to change) An adoption process is a process bringing about a change
in a buyer’s attitudes and perception. Consumer adoption process covers the
steps that a consumer usually goes through in determining the feasibility of
buying new products
1. Awareness:
A person learns about a new idea, product or practice. He has general
information about it, e.g. through advertisement. He has however limited
knowledge about special qualities, usefulness, performance etc. regarding the
innovation. He merely knows about its existence.
2. Interest:
He now develops an interest in the innovation. He demands more detailed
information about the new product, its utility its performance and so on. He
listens with interest to Jingles on the radio or TV ads, reads press ads and
learns more about it from others, and is now inclined to actively seek the
desired information from sales – persons, opinion leaders, peers, friends, etc.
3. Evaluation
or mental trial: The accumulated information and evidences are weighed by the
person in order to assess the basic soundness or worth of the innovation. He
tries to weight the value of the new product and the extent to which it is good
for him. In a sense, he conducts a mental trial of the new product.
4. Trial (physical): The person now is ready to
put the idea into practice. Competent personal assistance is necessary to put
the innovation to use.
5. Adoption: It is the final stage in which he
makes a decision to but. The person now decides to adopt the new idea, product
or practice for continued use. If post purchase experience is good, he becomes
a repeat buyer and a talking advertisement of the innovation.
PRODUCT PLANNING AND DEVELOPMENT STRATEGY
Marketers have four alternative ways of
bringing about an increase in sales and profits:
1. Market penetration: It involves the
expansion of sales of the existing products in the existing markets by selling
more to present customers or gaining new customers in the existing markets.
2. Market Development: In market
development a present product is introduced to a new market or segment. Market
development is the creation of new markets by discovering new applications for
existing goods, e.g. Mini – bus may be made available for goods or passengers.
3. Product development:
Product development occurs when a firm introduces new products into a market in
which it is well established. Product development is the introduction of new
products in the present market, e.g. new synthetic fibers for known textile
products.
4. Diversification: Diversification
occurs when a firm seeks to enter a new market with a completely new product.
Such a firm has neither market expertise not product knowledge.
NEW PRODUCT IDEA
Excluding the continual search for new ideas,
the time and costs involved in the activities relating to product planning and
development process from experience in the U.S>A is as follows:
Many innovative ideas are needed to find one
good idea worth for commercialization and many new ideas fail to pass the
screening stage. Few ideas are compatible with the corporate resources and
goals. Finally five ideas are eliminated for lack of profit potential. Finally
having profitability only one new product idea becomes eligible for market
introduction and officially enters its life cycle.
PRODUCT PLANNING AND DEVELOPMENT PROCESS
1. New product ideas: We visualize the
detailed features of a model product. Ideas may be contributed by scientists,
professional designers, rivals, customers, sales force top management, dealers
etc. We may need sixty new ideas to get one commercially viable product.
2. Idea screening: We have to evaluate
all ideas and inventions. Poor or bad ideas are dropped and through the process
of elimination, only the most promising and profitable ideas are picked up for
further detailed investigation and research.
3. Concept development and testing: All
ideas that survive the process of screening (preliminary investigation) will be
studied in detail. They will be development into mature product concepts. We
will have a precise description of the ideas and features of the proposed
product. At this stage, we can incorporate consumer preference into out agenda
for concept development and testing product ideas.
4.
Business
Analysis: Once the best product concept is picked up,
it will be subjected to rigorous scrutiny to evaluate its market potential,
capital investment rate of return on capital etc. Business analysis is a
combination of marketing research cost benefit analysis and assessment of
competition.
5.
Product
development Programme: We have three steps in this stage when
a paper idea is duly converted into a physical product.
a.
Prototype development giving a visual image of the product.
b.
consumer testing of the model or prototype and
c.
branding, packaging and labeling.
6.
Test
Marketing: The entire product marketing programme is
tried out for the first time in a small number of well – selected test markets,
i.e. test markets i.e. test cities or areas. Test marketing is necessary to
find out the viability of a full marketing programme for national distribution.
Customer reactions can be tested under normal market conditions. It helps the
company to learn through trial and error and to get additional valuable clues
for product improvement and for modifications in our marketing mix.
7.
Commercialization:
Once the test marketing gives the green signal for the product with or without
expected modifications the company can proceed to finalize all features of the
product. Now marketing management launch a full – fledged advertising and
promotion campaign for mass distribution.
CONCEPT
OF PROJECTS AND CLASSIFICATION
Meaning
of Projects:
Giitinger
has defined it as the whole complex of activities involved in using resources
to gain benefits.
Characteristics
of a Project:
Though
various cannotation have been given to the concept of a project they have four
basic characteristics:
1.
Investment pattern
2.
Benefits or gains
3.
Time limit
4.
Location.
In
short “ the project is an economic activity with well – defined objectives and
having a specific beginning and end” It should be amenable to planning,
financing and implementation as a unit where both costs and returns are
measurable.
Projects
have been classified in various ways by different projects.
1.
Quantifiable
and Non – Quantifiable Projects
Little
and Mirrless have divided projects into broad categories, viz. quantifiable
projects and non – quantifiable projects. Quantifiable projects are those in
which a plausible quantitative assessment of benefits can be made. Non –
quantifiable projects are those where such an assessment is not possible.
Projects concerned with industrial development, power generation, mineral
development fall in the first category while projects involving health,
education and defense fall in the second category.
2.
Sectoral
Projects
The
Planning Commission in India accepted this sectoral bias as the criterion for
classification of projects. A project may under this classification fall into
any one of the following sectors:
1.
Agriculture and
Allied sector.
2.
Irrigation and Power
sector.
3.
Industry and Mining
sector.
4.
Transport and
Communication sector.
5.
Social Service
sector.
6.
Miscellaneous.
3.
Techno
– Economic Projects
Projects
are sometimes classified on the basis of their techno – economic
characteristics. Three main groups of classification can be identified here:
1.
Factor
Intensity – oriented classification: On the basis of this
classification projects may be classified as capital – intensive or labour –
intensive depending upon whether large – scale investment in plant and machinery
or human resources is involved.
2.
Causation
– oriented classification: Here projects are
classified as demand based or raw materials based projects – depending on the
non availability of certain goods and services and consequent demand for such
goods or services or the availability of certain raw materials, skills or other
inputs as the dominant reason for starting the project.
3.
Magnitude
– oriented classification: In this the size of
investment forms the basis of classification. Projects may thus be classified
as large – scale, medium – scale or small – scale projects depending upon the
total project investment.
4.
Financial
Institutions Classification: All India and State
Financial Institutions classify the projects according to their age and
experience and the purpose for which the project is being taken up. They are as
follows:
1.
New Projects.
2.
Expansion Projects
3.
Modernization
Projects.
4.
Diversification
Projects.
The
Projects listed above are generally profit – oriented.
5.
Service
Projects: The services oriented projects are
classified as under:
1.
Welfare Projects.
2.
Service Projects.
3.
Research and
Development Projects.
4.
Educational Projects.
