What is Product Selection in Business? What are the Common Legal Aspects and Considerations
Explain product selection: Product selection business involves a gamut of decisions and processes that the business investor must face in order to successfully establish a business that can and will meet the needs and demands of the customer, amidst competition, in the marketplace.
The capacity to pick the best from an array of choices concerning product selection wizard tool will go a long way in determining whether an entrepreneur will post good returns on his/her investment. A product is usually the first, tangible contact that informs the views, perceptions and opinions that a customer will make about any business.
Such products bear in them the psychological symbols of the drive, mission and overall direction that the business embodies.
Product selection guide
The product selection business can be viewed through the prism of certain factors that determine the nature and value of the choices and opportunities open to the entrepreneur, whose enterprise must remain profitable and competitive in the market place. These factors are as follows:
The Demand-Supply Mix
The size and extent of the market needs for a product or service will to a very large extent play a dominant role in the selection of a product to meet the particular need/want. The product that meets these needs in the least costly way, while bringing in handsome returns on investment for the entrepreneur will inform the decision of the business, in its product selection and design. Essentially most criteria for product selection is predicated on the fact that there is a demand for the product that is selected.
The availability of funds is another important consideration in the selection of product in business. Financial wherewithal will confer the ability of the investor to carry essential business activities critical to the success of the food or drug product selected.
Such activities include research and development, promotional programs, creating distribution networks, sales and marketing activities, advertising drives as well as other actions incident to the success of the product selected.
Availability and Access to starter (raw) Materials
Once the Product selection stages comes up with a product that possess the fundamental indices for success, in terms of mass market appeal, the entrepreneur must now determine the resources needed to bring the product to tangibility.
Hence, the availability of raw materials incident to the creation of the selected product is of paramount importance.
Also the entrepreneur must consider how readily the business can access such raw materials, the costs implications of either moving the materials to production sites or establishing the manufacturing plants close to the location of the raw materials. If the feeder materials are imported, the business owner must decide how this variable will influence his decision concerning what product to pick for the market.
The process of turning raw material into the selected product or the activities bordering on the rendering of a service must be taken into account during product selection.
The entrepreneur, after determining what the market is demanding or needs, must ascertain the technicality of the production process, the available technology that is most cost-effective, labor type and size, as well as other activities that have significant bearing in meeting the needs of the market place.
Further issues to be considered will include what kind of machinery will be most suitable for the production process; will such equipment be imported as well as considering new or refurbished machinery. The entrepreneur must bear in mind that the product selected must be able to satisfy customers from technical and practical points of view.
This factor can be considered the limiting test that will inform the product selection process. The entrepreneur will often make a choice from an array of products that meet the demands/needs of the market place. S/he will most likely settle for that product that bears the highest profit potential, after all incident costs relating to production and other marketing activities have been deducted.
In addition, the method of product selection will go for a product that possesses the ability to utilize redundant capacity or complements/boosts the sale of another product in the market place.
Availability of Qualified Manpower
The success of the product selection business is hinged on the availability of requisite personnel who will handle the various stages of the production process, in bringing the product to the market place. The costs of manufacturing the selected product must be kept to a minimum, which is achieved when qualified manpower are saddled with the manufacturing process.
This factor is often beyond the control of the entrepreneur. However the economic and fiscal policies of the Government will greatly influence the product selection criteria and template of the entrepreneur. For instance, if the authorities enact laws that favor the patronage of locally produced inputs as against imported raw materials, the entrepreneur will have to factor in this policy in determining what product is to be selected for the market.