Entrepreneurship Module 6:

Selecting the Best Product or

Service
 Introduction
• This module guides students in selecting the
best product or service based on market
needs, feasibility, and competitiveness.
• Product selection is the process of choosing
which products to offer in a business, store, or
marketplace. It involves evaluating different
products based on factors like demand,
profitability, competition, target audience
preferences, and market trends.
 Key Factors in Product Selection:
1. Market Demand – Identifying what customers need or want.
2. Profitability – Ensuring the product has a good profit margin.
3. Competition – Analyzing competitors and differentiation
opportunities.
4. Quality & Supplier Reliability – Ensuring consistent product
quality.
5. Trends & Innovation – Keeping up with new and popular
items.
6. Cost & Pricing Strategy – Balancing affordability and
profitability.
7. Target Audience Fit – Matching products to customer
preferences.
 Reasons Why Product Selection is
Important:
•Drives Sales & Revenue – Offering the right
products attracts customers and boosts sales.
•Meets Customer Needs – Selecting products
that solve problems or fulfill desires increases
customer satisfaction.
•Enhances Competitive Advantage – Unique
or high-quality products help differentiate a
business from competitors.
•Optimizes Inventory Management – Prevents
overstocking slow-moving items and reduces
losses.
•Maximizes Profit Margins – Selling profitable
products ensures financial growth and stability.
•Improves Brand Reputation – Offering
reliable and trending products builds trust and
customer loyalty.
•Reduces Business Risks – Carefully
selecting products minimizes financial losses
from poor-selling items.
•Aligns with Market Trends – Staying updated
with customer preferences ensures long-term
success.
Key Considerations in Product Selection
• 1. Financial Gain
• 2. Low Capital Requirements
• 3. Favorable Return Rate
• 4. Feasibility and Innovation Potential
• 5. Availability of Resources and Suppliers
 Understanding Customer Needs
• Understanding customer needs is crucial for
any business because it helps create products
and services that solve problems, improve
satisfaction, and drive sales. When businesses
know what their customers want, they can
tailor their offerings, marketing strategies, and
customer service to meet expectations.
 Types of Customer Needs
1. Functional Needs – Basic requirements a product/service
must fulfill (e.g., a phone should make calls).
2. Emotional Needs – How a product makes the customer
feel (e.g., luxury brands provide status and confidence).
3. Social Needs – Needs related to social acceptance and
belonging (e.g., eco-friendly products appeal to
sustainability-conscious consumers).
4. Convenience Needs – Customers want products that save
time and effort (e.g., online shopping with fast delivery).
5. Price Needs – Customers seek value for money and fair
pricing.
• Example: helping to reduce time, effort and expense.
 Understanding Customer Needs
• - Identify what problems your product can
solve
• - Understand consumer desires and
preferences
• - Ensure the product has a strong market
demand
• - Provide real value and usability
 Size of your potential reachable market

• The size of your potential reachable market

refers to the total number of potential
customers who could realistically buy your
product or service. It helps businesses
understand their market opportunity and
growth potential.
Factors in Selecting a Business Idea
• - Passion and Skills of the Entrepreneur
• - Market Demand and Competitor Analysis
• - Resources and Capabilities
• - Legal and Government Regulations
 What is a Potential Market?
• A potential market refers to the group of
people or businesses who are not yet
customers but could become buyers of a
product or service in the future. These
individuals have a need for the product and
may have the financial ability to purchase it
but have not yet done so.
 Key Characteristics of a Potential Market:

• ✅ Unreached Customers – People who fit the

target audience but haven’t purchased yet.
✅ Growing Demand – A market segment with
increasing interest in the product.
✅ Market Expansion Opportunity – A chance to
reach new customers through marketing, new
locations, or product adjustments.
✅ Untapped Segments – New demographics,
geographic areas, or industries that might be
interested.
 Importance of Innovation in Business
• - Helps create a unique product
• - Differentiates from competitors
• - Attracts more customers
• - Ensures long-term growth
 Need to Comply with government rules and
regulations
•Business Registration & Licensing –
Register your business and obtain necessary
permits.
•Tax Compliance – Pay income tax, sales tax,
or VAT, depending on the country.
•Labor Laws – Follow regulations on employee
wages, working hours, and benefits.
•.
•Consumer Protection Laws – Ensure
product safety, fair advertising, and
transparent pricing.
•Health & Safety Regulations – Maintain
workplace safety standards (especially in
food, manufacturing, or healthcare
industries).
•Environmental Laws – Follow regulations
on waste disposal, emissions, and
sustainability.
 Why Compliance is Important:
✔ Avoids legal penalties and fines
✔ Builds trust with customers and investors
✔ Ensures smooth business operations
✔ Protects employees and the environment
Can the product be superior in quality, presentation
or marketing when there is a comparable product?

• Unique Selling Proposition (USP)

• USP is what makes a product stand out.
• Example: A smartphone with the longest
battery life in the market.
Key Characteristics of a Strong USP:
• ✅ Unique – Offers something competitors
don’t.
✅ Valuable – Solves a key problem or fulfills a
strong need.
✅ Clear & Concise – Easy to understand in one
sentence.
✅ Customer-Focused – Speaks directly to the
target audience’s needs.
 Business Planning Essentials
• A solid business plan includes:
• - Business Goals
• - Target Market Analysis
• - Financial Planning
• - Marketing Strategies
• FAB Analysis stands for Features, Advantages,
and Benefits. It is a framework used in
marketing and sales to understand and
communicate the value of a product or service
to potential customers. By identifying the
features, advantages, and benefits of a
product, businesses can better align their
messaging with customer needs and
motivations.
 FAB Breakdown:

1.Features
1.These are the characteristics or attributes of the
product or service.
2.Example: A smartphone with a 12-megapixel
camera, 6GB RAM, and 128GB storage.
2. Advantages
1.These describe the advantages or superior
aspects that these features offer over other
products or competitors.
2.Example: The 12-megapixel camera provides high-
quality photos, and 6GB RAM ensures smooth
multitasking.
3. Benefits
1.The personal impact or value the customer
receives from the features and advantages. It
answers, “What’s in it for me?”
2.Example: The camera lets you capture memories
in stunning detail, and the smooth multitasking
allows for an enhanced user experience, making
your life easier and more efficient.
 FAB Example:

1 2 3 4
Let’s take a laptop as an Feature: 15-inch display Advantage: The high- Benefit: You can enjoy a
example. with Full HD resolution. definition screen provides better viewing experience
clear, vibrant visuals. for work, entertainment,
and gaming, making tasks
more enjoyable and
efficient.
 Product Features, Advantages & Benefits

• Example:
• Feature: 100% Organic
• Advantage: Healthier Choice
• Benefit: No harmful chemicals
 Conclusion
• Key Takeaways:
• - Select a product that meets market needs
• - Ensure feasibility and innovation
• - Plan and research thoroughly