Selection Criteria ‘s for New Launching of Product
An entrepreneur can decide to sell a completely new product or modify the existing product and sale in the market. The decision regarding what to sell, how to a sale and whom it is to be sold depends on various criteria.
If the entrepreneur is thinking of a completely new product the cost will be very high as it includes the cost of research and product develop other than initial investment into new machinery training to employees & the cost of raw material. if it is just a modification of an existing product than the cost will be less hence depending upon the cost or the capacity to spend the type of new product can be determined.
The extent to which an entrepreneur can establish a brand image, service product innovation or reputation describes its differentiation. An entrepreneur should select such product which differentiates it from competitors.
C) Financial Strenght
If an entrepreneur selects a luxurious product like a car, vehicles jewelry etc than it is a very high investment is required which call for finance from other sources like a financial investment, share, debentures, secured loans etc. If the product is semi luxurious or shopping goods like TV, DVD washing machine then the investment is comparatively less but if the product is non-luxurious like soap, vegetables, cloth very less investment is required. Hence depending upon the financial strength the type of product can be selected.
d) Personal factors
The nature of an entrepreneur is also deciding criteria. If he is self-competent, optimistic, able to take self-risk, versatile creative, dynamic & has knowledge of market then he can take up a completely new product building decision other than continuing existing product.
e) Functional Departments
All the functional departments in an enterprise have an impact on the entrepreneurial plan and action. The finance department is a concern with the availability of funds, R&D department focus on innovation, the purchasing department has to obtain sufficient raw material, the manufacturing department is responsible to the met production target etc.