Economic feasibility of product or service
Economic feasibility of producing your anticipated product or service:
The best marketed products often outsell the best products if not marketed well. Focus on two very important concepts: understanding the process of personal selling and understanding the pricing of new products & services.
Beware of overdesigning the product to the point that the price is beyond your customer.
Keep production costs manageable and volume appropriately high.
High development and low demand condition equals unprofitable opportunity.
Costs include designing, producing, distributing, marketing & supporting the new product. Examine competitor’s financials to help scope your own financial forecasts and goals. Beware of underpricing your product. If offering a comparable level of features, price your product just under the price of competitors. See if your price is high enough to cover costs when fixed costs are large.
The best marketed products often outsell the best products if not marketed well. Focus on two very important concepts: understanding the process of personal selling and understanding the pricing of new products & services.
Beware of overdesigning the product to the point that the price is beyond your customer.
Keep production costs manageable and volume appropriately high.
High development and low demand condition equals unprofitable opportunity.
Costs include designing, producing, distributing, marketing & supporting the new product. Examine competitor’s financials to help scope your own financial forecasts and goals. Beware of underpricing your product. If offering a comparable level of features, price your product just under the price of competitors. See if your price is high enough to cover costs when fixed costs are large.
This blog post is based on my learnings from the course on ‘entrepreneurship’ offered by Maryland Technology Enterprise Institute, University of Maryland through Coursera (2014).
Comments
Post a Comment