Financial markets assignment
HOW YOU SEE IT
Think of a product or service that you no longer use because it became obsolete, outdated, or has been replaced with something new due to innovation. Then answer the following questions:
- Describe the product or service.
- Why did you initially purchase the product or service?
- Why do you no longer use it?
- Have you replaced the product or service with anything else?
This is information to help answer questions
THE BIG PICTURE
When you go into a store or shop online, do you ever wonder how the products got there in the first place?
This week, we’ll take a close look at how businesses create new products and services through the Product Development Process. We’ll consider how products move through a natural Product Life Cycle. We’ll see that, by listening closely to the people who buy their products, businesses can continue to create new products and features that meet the changing needs and desires of their customers. Next week, we will study different aspects of Production: common methods of manufacturing products and ensuring the products are of the highest quality.
Rochelle and her team at Alikay Naturals do an incredible job of creating products that meet their customers’ needs. It’s a key part of the story of their success. Rochelle started her business by listening to one of the most important customers—herself. She had a need for a beauty product that didn’t exist. So what did she do? She went out and made it for herself! What happened next is a common story in the world of business. People around her—her friends and family—started telling Rochelle about their own beauty needs and desires and asked her to make similar products for them. Through hard work and a simple process for creating great products, she’s been able to meet the needs of her friends and family members—and many more customers.
Rochelle’s story is inspiring. She built a new business from scratch, and now her products sit on the shelves of leading traditional and online retailers, such as Target and Amazon. She’s a great example of how a disciplined approach to creating new products and a commitment to quality can turn a great idea into a well-loved and successful business.
- Businesses use a simple, repeatable process for creating new products or services. It’s called the Product Development Process. The four simple steps of the process are: (1) generating ideas, (2) testing and analyzing, (3) developing the product or service, and (4) launching the product or service.
- Products have a natural progression—called the Product Life Cycle—that starts with Introduction and moves through Growth, Maturity, and Decline. Business leaders must be able to recognize a product’s position in its life cycle in order to decide when to improve existing products, discontinue outdated products, and introduce new products.
- Innovation—the act of creating something new—is essential for businesses to continue to compete and thrive. There are four main types of innovation: sustainable (eco-friendly), frugal, sustaining, and disruptive.
Why Is This Important?
Product development is the engine for making innovations—new ideas—come to life. This is at the heart of what businesses do. In fact, without an understanding of how to develop new ideas and turn them into products, businesses wouldn’t exist. The companies that have been around for decades, such as GE or Apple, continue to thrive because they know how to listen to customers, generate new ideas, and turn those ideas into products their customers love and—most importantly for the business—purchase. Companies who aren’t able to go through this process won’t have anything to sell that customers want. Those companies will lose their customers to competing businesses. Without customers, a company won’t be around for long. That’s a big risk for a business.
Companies also need to know how well a product is doing in the market. Is it still new and exciting, and are sales growing? Are customers continuing to buy it, and have sales been steady over the last few months? Or do people seem to not want the product anymore, and are sales starting to fall? These phases are all natural parts of the product life cycle. It’s important for businesses to be able to recognize each of these phases. For example, if customers no longer want a particular product, a company can begin the process of creating a new, better product to replace the current one. Businesses need to know when and how to introduce these new products.
How Does This Connect to the Other Parts of Business?
Products and services are the backbone of a business. Companies exist because they have something valuable to offer their customers. Without that, a company has nothing to sell—and customers have nothing to buy. That, of course, means there is no money for the accountants and finance team to track and measure. Sure, a business can have a leadership team and strong management, but it will just be people in an office with nothing to sell. How will it compete with other businesses with a product?
This is why we’re starting with product development. Throughout the rest of this course, you’ll learn how products are sold to customers, how those sales lead to profits and growth, and how strong teams can lead companies to do even more. But remember, all good businesses are built around a product or service that meets a need or addresses an opportunity.
Now, let’s jump right into this week’s materials with an Explore Activity.