It is often good to identify a number of criteria upon which product selection is based. Marks/Weights can be allotted to each criterion to achieve an objective evaluation.
Steps Involved in New Product Selection Process
There are three basic stages/steps involved in product/venture selection. These are idea generation, evaluation and choice.
Idea Generation: Product ideas or investment opportunities come from different sources such as business/financial newspapers, research institutes, consulting firms, natural resources, universities, competitors. etc
The starting point for idea generation could be a simple analysis of the business’s strengths and weakness. Ideas could also be generated through brainstorming, desk research and various types of management consensus procedures.
Evaluation: Screening of the product ideas is the first step ill evaluation. Such criteria as potential value of the product, time money and equipment required, fitting of potential product into the business’s long range sales plan and availability of qualified people to handle its marketability need be thoroughly considered.
Each identified product/investment opportunity needs to be adequately evaluated. A pre-feasibility study of the product market, technical and financial aspect is necessary at this stage to have a clear picture of the associated cost and benefits. A pre-feasibility is a preliminary version of a feasibility study. It is similar to a feasibility study except that it is less detailed. It is usually carried out for large and complex product/project to determine whether to proceed to the more elaborate feasibility study.
Choice: A choice is made of product which has been found to be commercially viable, technically feasible and economically desirable. At this stage, necessary machineries are set in motion.
Causes of Product Failure
A wrong choice when made, often leads to product failure. Product failure may be caused as a result of one or combination of the following:
- Management oversight during the basic planning stages – initial research may be either inadequately done or bungled in the interpretation.
- Subtle changes in the market. For instance, competitor may introduce a competing product into the market unexpectedly.
- Lack of sound market appraisal
- Product problems and defect e.g. the manufacturing of a product that is too costly or too complicated.
- Inadequate marketing support. For Instance, the company may have rated the product so high in the market that they cut back on promotion.
- Lack of consumer education about the product.
Product selection is one thing, the sustainability of the product in the market is another thing entirely. There need to at least stabilize the sale of the product. This is where product modification comes in because of the dynamic nature of the business environment. However, the technique to use to modify a product is dependent upon the circumstance of the product in relation to the buyer. There are some possible alternatives of product modification, namely:
Quality improvement– which aims at strengthening the competitive position of the product. The improvement may be in the appearance or end use.
Feature improvement- which is to increase the number of real or imagined product benefits.
Style improvement – aims at improving the aesthetic appeal of the product rather than its functional performance.
Service improvement e.g. technical advice, faster supply, breaking bulk, etc. Often used by smaller companies competing with large ones.
Promotional benefits e.g. giveaways competitions, etc. are used to add value to the product.
Facilities for selected products
Raw materials: for instance, Nigeria is endowed with natural resources. Indeed, all the raw materials requirements of most industries in Nigeria can be sources locally. Businesses for which Nigeria has comparative advantage in terms of raw materials availability, viability and market opportunities include:
– Maize starch derivatives production
– Ginger processing
– Rubber product ion
– Sugar production
– OIL seed chemicals production
– Kaolin processing
-Granulated limestone production
– Crude saIt processing etc
Other factors to consider are ;
- Choice of technology
- Infrastructure facility