SELECTION OF A PRODUCT

Very essential for being success in business venture. The various factors that influence the entrepreneur in selecting the right product are:

• The import restrictions or whether the import of the selected items is banned- In case of banned item, the domestic market will offer considerable scope for selling as the demand for such a product would not be met by import.
• Whether the entrepreneur or his partners have substantial experience in the manufacture and marketing of certain products. Most often, the items selected are of those lines of products in which entrepreneur or his colleagues have gathered enough experience.
• Degree of profitability that rules in the market. Such information can be obtained from the banks or the financial corporations or the market itself.
• Concessions available from the government for producing a product that may be import substitution. Entrepreneur will select a particular product that enjoys a substantial amount of incentives, concessions, liberal taxation policies etc.
• Products belonging to priority industries or small- scale sector- certain products are listed by the government for purchasing exclusively from the small- sector.
• Market for the product – if the product also has an export market, it widens the scope of marketing and hence the success of the enterprise.
• Certain products are permitted for production only if the others belong to de- licensed category. Hence a product belonging to licensed category or de- licensed category is also considered before selecting the product.
• Products enjoying specific advantages such as locations viz, if produced in free trade zone in a backward area.
• Product belonging to an ancillary unit serves as a major component for the OEM- provides a ready demand and hence ensures easy marketability.
• Finally, whether the machinery and raw materials required to manufacture the product would be imported or indigenous, requirement of skilled/ unskilled labor, indigenous technical know-how or foreign collaboration. The study of project idea is the starting point of the feasibility analysis.