Republic of the Philippines

City of Olongapo
GORDON COLLEGE
Olongapo City Sports Complex, East Tapinac, Olongapo City
Tel. No. (047) 224-2089 loc. 314

DETAILED LEARNING MODULE

Title: DEVELOPING A BUSINESS PLAN (DP)

Module No. 3 .

I. INTRODUCTION
Entrepreneurs must have a full knowledge as to what products are needed in the society. The product
will be for the satisfaction of the group of the target market. A product can be tangible or intangible
in nature that can be offered for satisfaction of the recipients it may be an idea, a physical entity (a
good), service or any combination of the three.

II. LEARNING OBJECTIVES

After studying this module, you should be able to:
1. Propose solution/s in terms of product/s and service/s that will meet the need using
techniques on seeking, screening, and seizing opportunities:
a. Analyze the market need;
b. Determine the possible product/s or service/s that will meet the need;
c. Screen the proposed solution/s based on viability, profitability, and customer
requirements; and
d. Select the best product or service that will meet the market need.

III. TOPICS AND KEY CONCEPTS

Product: Its Nature and Sustainability

LEVELS OF PRODUCT
Tangible Products are the basic physical appearance which can be an idea having precise specifications and
is offered under a given/specified description or a model number.
Augmented Products include the image and service features of a certain entity. It gives emphasis on the
intangible benefits that the customer will be getting from buying the product.
Generic Products emphasize the impact of the product to the consumer, not the seller. This will signify the
purpose of its existence and the primary objective in creating the product.

TYPES OF PRODUCT
1. Goods are sale of the physical products from the manufacturer to the consumer of final and ultimate
user. These are tangible products that can measure the satisfaction with result or evidences as
manifested through physical development.
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 Republic of the Philippines
City of Olongapo
GORDON COLLEGE
Olongapo City Sports Complex, East Tapinac, Olongapo City
Tel. No. (047) 224-2089 loc. 314

a. Durable Goods – are sale the physical products that are used over a long period of time. These
products are expensive because of the quality of the materials used.
b. Non-Durable Goods – are the physical products that are quickly and easily be consumed or worn
out, become obsolete, unfashionable or no longer popular. These products are inexpensive and can
easily be damaged.
2. Services are intangible products that satisfaction can be measured in future preferences.
a. Rented-goods services – are the consumer rented facility of the sellers in a certain period of time.
b. Owned-goods services – are the repair and maintenance services rendered by the sellers to the
products of the customer.
c. Non-good service is personal service on the part of the seller; most common are the expertise and
profession of the seller.
Characteristics of Services
1. Intangibility is the services that cannot be displayed, transported, stored, packaged or
inspected before buying.
2. The credibility of the service provided most of the time counts.
3. Inseparability is the service provider and services that cannot be separated. It cannot
accomplish the purpose if one is missing.
4. Variability is when the service is difficult to standardize because it varies upon the
performance of the provider.

Consumer Products
These are goods and services destined/produced for the final consumer for personal, family, or
household use. The use of the goods or services designated it as a consumer product.

1. Convenience products are purchased with the minimum or less effort because the buyer has
knowledge of product characteristics prior to shopping.
a. Staples are low priced items that are routinely purchased on a regular basis and are products
that are used every day.
b. Impulse products are the items that the consumer does not plan to buy.
2. Shopping products are products that the consumers acquire through further knowledge and
information in order to make final purchase decision. Consumers will exert effort in searching or
looking for information because these products have high prices and are bought infrequently and
are categorized as follows.
a. Attribute – based shopping products provide customers with information and evaluated
product features, performance, options, warranties and other factors.
b. Priced – based shopping products enable customers to judge product attributes to be the
same and look around for the least expensive item.
3. Specialty products are the items with particular brands and stores to which consumers are loyal.
They are willing to make a significant or specific effort to acquire the brand desired units and will
pay a higher or above the price of similar products.

Industrial Products
Industrial products are goods or services purchased for use/consumption in the
production/manufacturing of other goods or services, in the operation of a business or for resale to other
customers.
1. Accessory equipment is selected priced portable goods which last long period of time, requiring a
moderate amount of consumer decision making.
2. Raw materials are unprocessed basic materials from extractive and agricultural industries. Natural
environment promotes a good source of raw materials.
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 Republic of the Philippines
City of Olongapo
GORDON COLLEGE
Olongapo City Sports Complex, East Tapinac, Olongapo City
Tel. No. (047) 224-2089 loc. 314

3. Industrial or operating supplies are inexpensive convenience goods which are rapidly consumed
and are necessary for the day-to-day operation of the firm.
4. Component materials are semi-manufactured goods which undergo further changes in form and
later to be a part of the finished products.
5. Installations are very expensive materials, non-portable goods which are used in the production
process and do not become part of the finished product.
6. Fabricated parts are finished products of other companies which form part of the manufactures
product without further changes in form, but given added feature to make a new product.

New Product Development Process

The process consists of two sets: one is internal which looks at the company’s objectives and resources, while
the other is external which looks at the customer’s needs and wants.
Product Satisfying Features
Product patronage in the market is conditioned by the strategies and policies employed by the
manufacturer and the marketing organization on the product’s attributes.
1. Design It matters to the elements that collectively form of good or service that will satisfy customers
and gain competitive advantage.
2. Product Colors It is the customer’s rejection or acceptance of the product. This could be true in
clothing, cars or furniture and other fixtures.\
Color can be an important consideration for highly technical products.
3. Product Quality this is set of features and attributes of a product or services that determine its
ability to satisfy human needs.
Product Warrantees one very important attribute of the product is warrantee. It is the state where the buyer is
assured that the product meets the specifications stated in the product labels.
Best Product for Market Need

Tips in Choosing the Business Name

1. Easy to Recall or Remember – the business name must be understandable so it is easily stored in the
memory.
2. Pleasant Meaning Creates Pleasant Feelings – It produces positive or favorable feeling upon saying or
mentioning to the public.
3. Easy to Pronounce – the business name must be cited as freely as it can be.
4. Easy to Spell – the business name must be simple. Words that are used in everyday communication
will be an advantage.
5. Related to the Product – the business name must describe the product. It represents the features of the
product.

Product Life Cycle

The Product Life Cycle concept describes a product’s sales, profits, customers, competitors, and
marketing emphasis from its beginning until is removed from the market.

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 Republic of the Philippines
City of Olongapo
GORDON COLLEGE
Olongapo City Sports Complex, East Tapinac, Olongapo City
Tel. No. (047) 224-2089 loc. 314

STAGES OF PRODUCT LIFE CYCLE

STAGE 1. Product Development
The company must think of a new product. A new product is a modification, creation, and innovation of
an existing product which makes product more meaningful to the customer.

The new product planning process involves a series of steps:

1. Ideas Generation – searching and looking for a new product or business opportunities. The
employees, channel members, competitors, and customers can be a great source.
Methods
a. Brainstorming – all the members of the group can contribute in sharing ideas, comments,
and suggestions.
b. Analyzing Existing Products – a successful product that captures great market can be
analyzed as a basis in creating a new product.
c. Reading Trade Publications – an inspirational story of a a successful entrepreneur can
lead into a development of a new product.
d. Visiting Suppliers’ Facilities – Supplier’s raw materials can be used as a method to
innovate and modify existing product.
e. Surveys – getting feedback coming from the customers and potential market.
2. Idea Screening – ideas which are unsuitable, unattractive, or poor are junked. Ideas together with
attributes are rated on the basis of a rating from 1-10.
Ideas are rated on the following categories: general, marketing and production characteristics.
3. Concept Testing – ideas which have passed the screening stage will now require feedback from the
consumer. It measures consumer enthusiasm by asking potential consumer to react a picture,
statement or oral description.
4. Business analysis – is a review of a market factors, revenues, cost and trends.
a. Demand Projections – sales potential; sales growth; rate of purchase; distribution intensity.
b. Cost projections – per unit cost; raw materials cost; cost of existing facilities and resources; breakeven
point.
c. Competition – market share of company and competitors; strengths and weakness of competitors;
potential competitors.
d. Required investment – engineering patent search, product development, testing, promotion, production,
distribution.
e. Profitability – time to recover initial cost; per unit profits, distribution intermediaries; control over price;
return on investment.
5. Product Development – ideas are converts into tangible form. Stage involves:
a. Product construction: type and quality of materials, method of production, production
time and cost requirements peer unit, plan capacity, sizes and colors.
b. Packaging: materials used in promotion or storage; cost; size and colors.
c. Branding: choice of new or existing name; exclusivity; trademark protection.
d. Product positioning: selecting a market segment.
e. Consumer attitude and usage testing.
6. Test Marketing – involves a selling of a fully developed product in a selected city and observing the
actual on the spot performance under the chosen marketing plan. Depending on the results, a firm
can decide to go ahead, modify the product or services, modify the marketing plan or drop or delete
the product.
7. Commercialization – this involves the actual marketing of the product in the target market. The
different activities to introduce the product to the market must be presented.

STAGE 2. Introduction
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 Republic of the Philippines
City of Olongapo
GORDON COLLEGE
Olongapo City Sports Complex, East Tapinac, Olongapo City
Tel. No. (047) 224-2089 loc. 314

A new product is introduced into the market place and the objectives is to generate customer
interest.
STAGE 3. Growth
The product gains wider consumer acceptance and the objective are to expand distribution and the
range of available product alternatives. More firms enter the profitable and tested market.
STAGE 4. Maturity
The product’s sales level and companies try to maintain lower price, better product features for as
long as possible. Market is saturated, penetrated and competition is at its highest level.
STAGE 5. Decline
The product’s sales falls as substitutes and new competitors enter the market.

IV. TEACHING AND LEARNING MATERIALS AND RESOURCES

Module, Slide Presentations, Video Clips Links

V. LEARNING TASK
ACTIVITY#1: BUSINESS 101: To succeed as an entrepreneur, you must develop the ability to select and
offer the right products or services to your customers in a competitive market. More than any other factor, your
ability to make this choice will determine your success or failure. Using the guided questionnaire below analyze
your prepared product/services to begin with.

Exclusive_for_Gordon_College_Use_Only_Not_for_Sale
 Republic of the Philippines
City of Olongapo
GORDON COLLEGE
Olongapo City Sports Complex, East Tapinac, Olongapo City
Tel. No. (047) 224-2089 loc. 314

1. What particular product do you think will be visible and be accepted by consumer in the market
today? Explain.
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2. In meeting the need of the customers, what specific activity plan will you do to improve it?
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3. How capable are you to produce the product?
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4. What are your potential market?
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5. Enlist the different government permit you need to comply for you to open a business. How will you
comply with each of their requirements?
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6. What barriers needed for you to overcome for a potential new product entry?
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Exclusive_for_Gordon_College_Use_Only_Not_for_Sale
 Republic of the Philippines
City of Olongapo
GORDON COLLEGE
Olongapo City Sports Complex, East Tapinac, Olongapo City
Tel. No. (047) 224-2089 loc. 314

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VI. REFERENCE
Entrepreneurship, Unlimited Books Library Services and Publishing Inc.,Marife Agustin
Acierto.:pages 89-94
Entrepreneurship, Unlimited Books Library Service sand Publishing Inc.,Marife Agustin-
Acierto.:pages 107-110

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