Why this is important
You need to properly define a product or service before you offer it so that you:
- offer the right product or service for the market;
- charge the right price for it; and
- sell enough to achieve what you want to achieve.
Who might do this
You might do this if you are:
- setting up a new business or social enterprise;
- expanding a business or social enterprise; or
- changing or adapting the products or services offered by your business or social enterprise.
What it involves
Defining a product or service involves:
- defining your product or service in detail and how it is different to other similar products or services;
- deciding how much to charge for your product or service;
- setting targets of how many or how much you will sell or distribute.
Other units that link closely with this
|WB1||Check what customers need from your business|
|WB3||Plan how you will sell your products or services|
|BD1||Check the likely success of a business idea|
What you need to do
- Decide on the detail of your business product or service and how it could be provided.
- Find out who your competitors are and how their product or service differs from yours.
- Work out who your customers will be.
- Work out the likely demand for your product or service.
- Decide how many you expect to sell or distribute.
- Research all the costs of providing your product or service.
- Decide what price to charge for your product or service.
- Work out how much profit you may make from your product or service.
- Work out and decide when and how you could sell or distribute the product or service.
- Make sure you can achieve what you want to achieve from your product or service.
What you need to know and understand
Products or services
- How to describe a product or service.
- How to find out about the market and its prices in a sector.
- How to work out the cost of providing products or services.
- Different ways to price a product or service and their benefits.
- How costs affect a product or service
- How price affects sales.
- Where to find out about your competitors products or services.
- How competitors’ products or services may differ (for example price, quality, delivery times, payment terms, level of service).
- How to analyse the market and competition.
- How to find out who your customers might be.
- How you can find out what customers want.
- Where and when a product or service can be sold.
- How to set realistic sales targets.
- What you want to achieve from your product or service.