ProductA set of tangible , intangible and associated

attributes capable of exchange for value with a ability to satisfy consumer and business needs.

According to alderson product is bundle of utilites consisting of various product features and acccompanying services.

E.g- while purchasing a car (tangible product)we are purchasing other services like free services

Criteria to select the productInternal factors: External factors(a)Cost (a)Demands of consumers(b) Experience (b)competition(c) Differentiation (1)pure competition(d)Financial strength (2)monopolistic (e) Functional departments (3) oligopoly(f) Personal factors (4)Pure monopoly

(c)suppliers(d) technological

improvements(e)Demographic factors(f)Economic and natural

environment(g)Political and legal rule(h) socio cultural

1.Cost

if the entrepreneur is thinking of completely new product then the cost will be high as it includes research and development cost, initial investment on machinery, training to employees

If the product is modification the cost will be lesser

if the entrepreneur plan to sell an existing product then the cost will be comparatively lesser .

2.Experience

cost advantages offer will be enjoyed by both who first entered in to the business and who have experience in the same field

(e.g)genentech for biotechnology

IBM for computers

3.ExperienceThe entrepreneur should seleect the

product which is different from competitor and this difference need not be actual or real difference but it may be psychologcal difference

(e.g)Mercedes benz4.Financial strength

If the entrepreneur selects luxury or high class items then the initial investment will be high

If it is semi luxury product then the investment is comparatively lesser

It it is perishable products then the investment is lower

5. Functional departmentsfinance dept- availability of funds.R&D-innovationpurchasing-sufficient supplies of raw

materialsmanufacturing- suffcient productive

capacity to meet productive target.therefore the entrepreneur has to consult

these dept heads before selecting the product. 6.Personal factors of an entrepreneur

if he is able to take risks ,ability to face challenges, optimistic , self confident ,flexible ,versatile, creative, dynamic, resourceful, perceptive with foresight, knowledge of markets then the entrepreneur can go for new products and if not the entrepreneur can go for existing product

External factors1.Demand of customers

product can be selected if the entrepreneur identify the needs and trends of customer

2.Competiton(a)pure competition-many small buyers and small sellers selling homogeneous products.

If the entrepreneur not willing to take risk he can enter in to such industry(b)monopolistic competition-many sellers and many buyers and each sellers has to sell differentiated products

the entrepreneur choose the products with slight difference

(c) Oligopolyfew large interdependent firms that

account for bulk of industry sales.Each oligopolist have large number of

customers the actions of one tends to directly affect others in the industry

(d)Pure monopolyOne firm produces the product but it has

no close substitutes(e.g) electricity

4.Suppliersentrepreneurs need to keep in mind the

internal resources of the company and need to check availability of raw materials .

He has to check the availability of raw materials their efficiency, their promptness etc.

5.Technological improvementsthe entrepreneur should keep in pace the

change in technology he should think of selecting the product the product which is updated otherwise the entrepreneur move out of his business.

6.Demographic factors(a)age(b)sex(c)trends in birth and death rate(d) age distribution(e) educational background.(f) geographical distribution

7.Economic conditionThe entrepreneur has to into

consideration of purchasing power of the consumers in their country. He has to consider both income and spending pattern of consumers

8. Natural environment9.Political and legal rule

Barriers to get success 1.Technical problems2.Poor timing3.Prohibitive costs of development4.Niche and fragmented marketing5.Development time6.Competitors7. govt.constraints