Chapter 4: product and service development
The Concept
of Product/Service:
v Entrepreneurs face challenges in identifying new
product/service or market opportunities.
v Organizational success relies on customer
satisfaction achieved through product and service development.
v Successful products not only have attractive designs
but also deliver robust performance.
v Product design aims to satisfy customers, maximize
value, and meet primary needs and desires.
v Companies introduce smaller, efficient, and intelligent
products with a lean operational approach.
v A startup's success depends on a distinctive
proposition that addresses customer needs.
v Successful products either eliminate existing pains
or provide significant tangible benefits.
v The myth that anyone can succeed with any idea is
debunked; knowledge and experience matter in navigating challenges.
Product/Service Development Process
Product/service
development is a crucial process for companies to respond to market signals,
adapt to changes in customer demand, adopt new technologies, explore new areas,
and ensure continuous growth. It plays a central role in achieving strategic
objectives, renewing the company's business model, and defending against
competition.
1. Idea Generation: In this stage, companies actively seek new ideas. Sources of ideas can include consumers, existing products and services, distribution channels, the government, and research and development.
2. Idea Screening: The purpose of this stage is to filter out less viable ideas and focus on the most promising ones. Ideas are evaluated and categorized into three groups: Promising Ideas, Marginal Ideas, and Rejects.
3. Concept Development and Testing: Promising ideas are refined into tangible product concepts. Questions are asked to determine the target market, desired benefits, and consumption patterns. Concept testing involves obtaining feedback from a relevant group of target consumers to gauge their reactions.
4.
Marketing Strategy Development: After
concept testing, a preliminary marketing strategy plan is developed to
introduce the new product/service to the market. This plan includes
considerations such as market size, structure, consumer behavior, pricing,
distribution strategy, marketing budget for the first year, and long-term sales
and profit goals.
5. Business Analysis: In this stage, the proposed product concept and marketing strategy are evaluated for their business attractiveness. Sales, cost, and profit projections are prepared to assess whether they align with the company's objectives. Financial measures like breakeven analysis may be used to evaluate the viability of the new product proposal.
6. Product Development: Once a product concept passes the business test, it proceeds to the research and development (R&D) or engineering stage.
v Here, scientists and engineers work to transform the
concept into one or more physical versions, aiming to create a prototype that
embodies the key attributes from the product concept statement.
v This process considers both functional characteristics
and psychological aspects of the product. Prototypes undergo various tests,
including functional tests in laboratory and field conditions, and consumer
tests.
7.
Market
Testing: Also known as, product testing or market research is the process of
assessing the viability and acceptance of a product or service within a
specific target market.
v This includes gathering
data and feedback from potential customers to assess the performance, appeal,
and market fit of the product before a full-scale launch.
v Market testing helps
businesses make informed decisions about product modifications, pricing, and
marketing strategies based on real-world responses from the target audience.
8.
Commercialization:
is the
process of introducing a new product or service into the market for widespread
consumption.
v It involves transitioning from the development and testing phases to full-scale production, marketing, and distribution.
v Commercialization aims to maximize the product's market share, revenue, and profitability.
Intellectual
Property Protection/Product/Service Protection
Intellectual
Property
Intellectual
property refers to a creation of the mind, such as inventions, artistic works,
designs, and symbols that are protected by legal means. It encompasses a range
of valuable assets, including patents, trademarks, copyrights, and trade
secrets.
Intellectual property rights grant creators and innovators exclusive
rights to their creations, enabling them to control and profit from their
ideas.
1.
Patent: is an official document that provides inventors with exclusive rights to
their inventions. It is a contract between the inventor and the government,
where the inventor discloses their invention in exchange for the exclusive
right to exploit it for a limited period. Patents protect new inventions or
significant improvements to existing inventions.
v They provide inventors
with the right to prevent others from making, using, selling, or importing
their patented invention without permission.
Ø Utility Patent: A utility patent protects
any new invention or functional improvements on existing inventions.
Ø Design Patent: This patent protects the
appearance of an object and covers new, original, ornamental, and unobvious
designs for articles of manufacture.
What Can Be Patented Then?
·
Processes: Methods of production,
research, testing, analysis, technologies with new applications.
·
Machines: Products, instruments,
physical objects.
·
Manufactures: Combinations of physical
matter not naturally found.
· Composition of matter: Chemical compounds, medicines, etc.
2. A trademark encompasses a word, symbol, design, slogan, or a combination thereof, serving to identify the source or sponsorship of specific goods or services. These distinctive elements, registered with government offices, could include names, marks, symbols, or mottos associated with a company's product or service
3. Copyright is a legal right
preventing others from printing, copying, or publishing original works of
authorship. It offers exclusive rights to creative individuals, safeguarding or
protecting literary or artistic productions.
The Ethiopian Intellectual Property
System:
In Ethiopia, the
intellectual property system is governed by several laws and directives. As an
active member of the World Intellectual Property Organization (WIPO) and a
participant in international agreements and treaties, Ethiopia recognizes the
significance of protecting intellectual property rights..
Ethiopian Intellectual
Property Office (EIPO): The Ethiopian government established the Ethiopian
Intellectual Property Office in 2003. Its objectives include:
·
Facilitating
legal protection and exploitation of intellectual property in the country.
·
Collecting,
organizing, and disseminating technological information contained in patent
documents.
·
Studying,
analyzing, and recommending policies and legislation on intellectual property.
·
Promoting
knowledge and understanding of intellectual property among the general public.
1.
Patent
Protection:
The Patent Proclamation
and its Implementing Regulation are the main laws governing patent protection
in Ethiopia. To be granted a patent, an invention must fulfill three
conditions:
·
Novelty: The
invention should not have been published or publicly used before.
·
Industrial Applicability: The
invention must have practical utility in industrial manufacturing or use.
·
Non-Obviousness: The
invention should not be an obvious development to experts in the relevant
field.
v Certain inventions are excluded from patentability
under the proclamation, including those contrary to public order or morality,
plant or animal varieties, essentially biological processes for plant or animal
production, and methods for playing games or performing commercial activities.
v Patent holders have the exclusive rights to make,
use, and exploit their patented inventions. However, there are limitations to
these rights, such as acts performed for non-commercial purposes, scientific
research and experimentation, and the use of patented articles on foreign
vehicles temporarily present in Ethiopia.
v The duration of a patent is typically 15 years, with the
possibility of a five-year extension for demonstrating proper working of the
invention in Ethiopia.
2.
Trademark
Protection:
Trademark protection in
Ethiopia is governed by the Trademark Registration Directive issued in 1986.
The objectives of trademark protection include distinguishing goods and
services, preventing unfair trade practices, providing information on trademark
ownership, and resolving disputes.
Trademark protection is
granted after the publication of a cautionary notice. Trademark registration
allows enterprises, both local and foreign, to centrally deposit trademarks
used to distinguish their goods or services.
3.
Copyright
Protection:
Copyright and Related
Rights Proclamation, enacted in 2004, provides protection to literary,
artistic, and scientific works. This includes books, articles, speeches,
musical works, audiovisual works, architectural works, and more.
Copyright protection is
granted to authors who are Ethiopian nationals or have their habitual residence
in Ethiopia. It also applies to works first published in Ethiopia or published
in another country within 30 days in Ethiopia. The protection of copyright
extends for the life
of the author plus 50 years.
Additionally, the
rights of performers, producers of phonograms, and broadcasting organizations
are protected by law.