MicroSave Briefing Note # 9: Key Questions That Should Precede New Product Development

Publication Date: 2001
Published by: MicroSave
Document Type: Other (PDF)

View this Document (149 KB)   Email this Document

What are the issues that need to be addressed before starting product development?

This paper identifies six issues that microfinance institutions (MFIs) need to address prior to starting new product development :

• Motivation: What has been the motivation for the new product development?
  • MFIs should ideally be motivated by the desire to become more client-driven.
• Commitment: Are the MFIs adopting product development as a process?
  • MFIs should follow a systematic approach with adequate market research, pilot-testing and planned roll-out of the new product.
• Capacity: Can MFIs handle the strains and stresses of introducing a new product?
  • MFIs should conduct a thorough institutional analysis, review strategy, financial viability, organizational structure, marketing and systems.
• Cost effectiveness and profitability: Do MFIs fully understand the cost structure of their products?
  • MFIs need to understand exactly how much each part of their operations costs to facilitate informed management decisions.
• Simplicity: Can existing product(s) be refined, repackaged and re-launched before developing a new one?
  • MFIs should carefully consider options for refining, repackaging or re-launching their existing products to save money and time.
• Complexity and cannibalization: Are MFIs falling into the product proliferation trap?
  • MFIs should recognize that they cannot design a product to respond to each and every individual specific need.
  • They should group the most common and prevalent needs and develop products accordingly.

• Reduction in drop-outs,
• Attraction of new clients,
• Contribution of the long-term sustainability of the MFI.