Lesson video

Hi there, everyone.

My name is Mr. Booth, and welcome to your Design and Technology lesson for today.

It's brilliant that you can be here with me.

Today, we're looking at commercial viability, and this is part of the saving space context, the iterative design, student living unit.

We're gonna be looking at what makes products successful when we try to sell them, and how you can relate this to your work when you are in school.

The outcome of today, I want you to be able to identify and understand the factors in making products commercially viable, and also how you can then incorporate those ideas into your own practice.

We have three keywords today.

The first one is commercial viability, the likelihood of a product being successful in its target market and making a profit.

So if we're talking about that, we need to know what profit is.

That's our next key word.

The money a business earns after paying all of its costs.

And finally, of course, another important aspect of this is the target market.

The specific group of people a product is designed and sold for.

Keep a lookout for all these keywords throughout this lesson.

Two learning cycles in today's lesson.

The first is commercial viability, and then we'll move on to how we ensure a product is commercially viable.

So let's start with commercial viability.

Commercial viability is the likelihood of a product being made, sold, and being successful in its target market and making a profit.

That is the key to selling products, isn't it?

Being successful in selling products.

A profit is the money a business earns after paying all of its costs, what's left in the bank after all the costs have been paid.

In other words, it asks, can this product make money and work well once manufactured?

That's another way of framing this.

To understand profit, businesses look at costs.

That's the first thing.

Everything the business spends to make the product.

This might include materials, manufacturing, packaging, wages, transport, marketing, and lots of other aspects.

The revenue, the money earned from selling the product.

So if a product sells for 25 pounds, that's the revenue that the company will get.

But then, of course, we have profit.

What's left once the company has paid for all those costs.

So if it costs 15 pounds to make and sell the debt for a desk light, the profit might be 10 pounds, for example.

Profit is important because it shows if our product is financially worthwhile.

Without profit, even a well-designed product cannot survive in the market because the company is not actually making any money.

Quick check for understanding.

What is the money a business earns after paying all of its costs?

Is it A, capital, B, revenue, C, profit, or D, expenses?

Pause the video now, have a go at this, and come back to me when you've got your answer.

It is, of course, C, profit.

Well done.

If a product is too expensive to produce or no one wants to buy it, then the company could actually lose money.

Commercial viability helps businesses make smart decisions about materials, manufacturing, pricing, and of course, marketing, how they can actually sell it to us as the consumers.

It ensures the product is realistic, meets customer needs, and can compete with similar products on the market.

Commercial viability helps businesses make informed decisions by considering a few things.

The materials, selecting options that balance cost, performance, and sustainability.

So the product remains affordable to produce.

Manufacturing, choosing processes that are efficient, reliable, and suitable for the intended scale of production.

Pricing, setting the price that customers see is fair while still generating enough profit to sustain the business and move the business forwards.

And then, of course, marketing.

Identifying the right target market and correctly advertising the product to maximize sales.

Without commercial viability, a product idea might fail, even if it's aesthetically pleasing or works well.

So commercial viability is a key aspect of product design.

To ensure a product is commercially viable, a designer needs to consider this throughout the design process rather than it be an afterthought at the end of the process.

By then, it's just simply too late.

Here are two examples of kettles.

We have an Alessi designer kettle, and then a non-designer, more standard kettle.

The Alessi kettle retails for over 100 pounds, whereas the kettle on the right, the more standard one, retails for approximately 30 pounds.

That's a significant difference between the two.

Both of these kettles are classed as commercially viable despite being very different in price.

We have the Alessi kettle, remember, is 100 pounds, and we have the non-designer kettle around 30 pounds.

Now why do you think this is?

Why are they both successful, even though they have very different prices?

So pause the video now, have a think about that with your partner, and then come back to me when you've got an answer.

So what do you think?

Well, both kettles are commercially viable because they are aimed at different target markets.

A target market is the specific group of people a product is designed and sold for.

Quick check for understanding.

The specific group of people a product is designed and sold for is called our, A, target market, B, consumer, C, demographic.

Pause the video now, come back to me when you've got your answer.

It is, of course, to A, target market, well done.

Now let's have a closer look at our two kettles and their target markets, and why they might be commercially viable.

The expensive kettle appeals to customers who want high quality materials, more advanced features, stylish design, and therefore, are willing to pay more.

Whereas, the lower cost kettle is aimed at customers, who just want a basic affordable product to boil water to make cups of tea.

Each kettle meets the needs and price expectations of its target market, so both can sell well and make a profit.

So we're now onto your first task.

Firstly, I would like you to define commercial viability, then explain why it is important for designers to consider commercial viability throughout the design process.

And then we've got a little bit of a task for you with this.

A company is developing a new desk light.

The design team need to check its commercial viability before moving into full production.

Explain how considering materials, manufacturing, pricing, and marketing can help the company decide whether the product is commercially viable.

Pause the video now, have a go at this task, and come back to me when you've got your answers.

So first of all, I wanted you to define commercial viability.

Now a good definition for this is commercial viability means whether a product can be successfully made, sold, and make a profit for that company.

I then wanted you to explain why it is important for designers to consider commercial viability throughout the design process.

Nice answer for this would be designers should consider commercial viability throughout the design process so they don't waste time or money on a product that won't sell.

Really important to do that right from the start.

They can also make better decisions that help the product succeed by thinking about it early on.

This means the final design is not only functional and attractive, but also realistic and profitable for a business.

I then wanted you to consider this scenario.

A company is developing a new desk light.

Explain how considering materials, manufacturing, pricing, and marketing can help the company decide whether the product is commercially viable.

To judge if the desk light is commercially viable, the company must choose materials that are affordable, but strong enough for daily use.

They also need manufacturing processes that can produce parts quickly and cheaply.

The price must cover all costs while remaining competitive, so customers are willing to buy it.

Effective marketing is needed to reach the target market, such as students or home office workers, and communicate the lamp's key features.

These factors together show whether the desk light can be made and sold at a profit.

Well done.

Now onto the second learning cycle, how to ensure a product is commercially viable.

Research into the market is vital for commercial viability.

Designers and manufacturers must be aware of several areas to help them make appropriate decisions.

To check if a product is commercially viable, designers might look at things like the cost, the target market, the materials and processes they might be using, the competition, so other products that are on the market, and also the profit they actually want to make, how much profit do they need to make for their situation?

Quick check for understanding.

Which of the below do designers consider to ensure their product is commercially viable?

Is it A, a designer's favorite color, B, prototype materials, C, profit, D, target market.

Pause the video, now have a go at this, and come back to me when you've completed it.

It is, of course, C, profit, and D, target market.

Well done.

So let's have a closer look at each of these.

So cost, is it affordable to make and sell at a good price?

This means thinking about how much it costs to produce the product, including materials, manufacturing processes, labor, and packaging.

The materials are really key to this.

If you are importing expensive materials from far away, it's gonna cost a lot of money.

Manufacturing processes, these vary massively in how expensive they are.

For example, if you have a polymer product that you are gonna injection mold that has an extremely high setup cost, but it means you can produce lots of the same item.

Labor, where are you gonna get your labor from and how much are you gonna pay them?

That's a real significant cost that you need to think about.

And finally, believe it or not, packaging can actually have a significant impact on the cost of your product.

If the product is too expensive to make, the final price might be too high for its customers.

Design is aimed to keep costs low, so they can sell the product at a price people are willing to pay, and of course, still make a profit.

So if we have a look at really simple scenario here, this is the cost to manufacture.

What we then have is our line and the price it's sold at is obviously above that line.

Everything above that line is profit to the company.

Target market, the target market is the group of people the product is designed for.

This could be anybody, it could be teenagers, parents, athletes, whoever your product is aimed at.

It's important to know what this group wants, needs, and can afford.

If the product doesn't appeal to them or solve a real problem, it simply will not sell.

Designers often do market research to understand their target market before making a product.

For example, if you design a water bottle and your target mar market might be active teenagers, aged 13 to 18, who play sports regularly, that might be a target market.

Your research may tell you that you need the design to be lightweight, durable, stylish, and easy to carry, because those features suit the lifestyle of the teenagers aged 13 to 18.

If you design it to suit the teenage target market, it's more likely to sell and more likely to be commercially viable, and make you a profit.

Materials and processes.

To make a product commercially viable, the materials and processes used must be readily available and suitable for the production.

For example, if a designer chooses a rare or imported material, it might cause delays in delivery or increased costs, where it's not actually necessary or suitable.

Using standard materials and efficient manufacturing methods helps keep production smooth and affordable, and means you can sell it for a price that your customers are happy with.

Quick check for understanding.

Why would a rare or imported material affect the commercial viability of a product?

Is it A, it will make the product lighter.

B, it could cause delays and increase costs.

C, it guarantees the product will be more popular, or D, it will improve the product's color.

Pause the video now, have a go at this, and come back to me when you've got your answer.

It is, of course, B, it could cause delays and increase costs.

Let's a look at competition.

If there are many similar products already on the market, it can be harder to break into that target market.

Just think about our water bottle example we used on a previous slide.

There are hundreds of different designs of water bottle on the market.

Designers must look at what's already on the market and think about how their product is different or better.

Is it innovative enough?

Does it actually change what's on the market?

Maybe it has lower costs, maybe it's more stylish, more sustainable, or has better features.

But standing out from the competition makes a product more likely to be commercially viable.

Now, research is vital to ensuring designers know about similar products.

This can be done by carrying out an existing product analysis.

Let's have a look at what Lucas has done.

"During my design process, I looked at existing products on the market that were similar to mine.

I looked at the materials they used, the cost they were being sold for, and what made them appealing to my target market.

" So that's a great bit of research that Lucas has done there.

And finally, profit.

A product needs to make more money than it costs to produce and sell.

This is called making a profit.

A product that is aesthetically pleasing, but doesn't make any money, isn't commercially viable, no matter how good it is or how good it looks.

Designers calculate things like selling price, production costs, and expected sales to make sure the product can bring in a good profit.

All of these areas have to be considered and be in balance to make sure the product is commercially viable.

Let's look at those again.

So we have the cost, the target market, the materials and processes, the competition, and of course, the profit.

So we're now on to task B.

I want you to consider this scenario.

A company is designing a new foldable laptop stand.

Explain why researching the market is important when checking if the product is commercially viable.

In your answer, I would like you to refer to the cost, target market, materials and processes, competition, and of course, profit.

I then want you to consider your own product and carry out research into each of the below to check and ensure the commercial viability of it.

Once again, it's the cost, the target market, materials and processes, competition, and profit.

Pause the video now, have a go at this, and come back to me when you've completed it.

So how did you get on?

Let's have a look at some sample answers that might be very similar to yours.

So first of all, we had a company designing a new foldable laptop stand, and I wanted you to explain why researching the market is important when checking if the product is commercially viable.

Your answers might include this.

Research helps designers understand the costs, so they can choose materials and processes that keep the product affordable to make.

It also helps identify the target market, ensuring the product meets their needs and is priced at a level they are willing to pay.

By researching materials and manufacturing processes, designers can select options that are suitable, affordable, and efficient.

Checking the competitions shows what similar products already exist and what features or prices the new products must compete with.

All of this supports decisions that affect profit, helping the company judge whether the product can be sold successfully, and of course, make money.

Next, I wanted you to consider your own product and carry out research into each of the areas to check and ensure the commercial viability of it.

Now, your ideas might include something similar to Andeep's.

"We have competition.

I looked at other products similar to mine on the market and found out most are made out of polymers and retail for around 15 to 20 pounds.

Mine will be a little bit more expensive due to my chosen material of timber, but I hope this will be a selling point for quality materials.

" And then target market.

"I consider my target market from the start of the design process and designed aspects of it to suit them and their needs and wants.

I'm confident that it will appeal to them.

Well, that's brilliant, Andeep.

So that brings us to the end of today's lesson about commercial viability.

You've been absolutely fantastic.

Let's have a quick summary.

Commercial viability is the likelihood of a product to be made, sold, being successful in its target market, and ultimately, making a profit for the company.

Commercial viability helps businesses make decisions about materials, manufacturing, pricing, and of course, marketing, how they're gonna sell it.

It ensures the product is realistic, meets customer needs, and can compete with similar products in the market.

That's really important.

To ensure a product is commercially viable, a designer needs to consider this throughout the design process, rather than it being an afterthought at the end of the process.

By then, it will simply be too late.

So designers gotta consider this right at the beginning of the process.

You've been brilliant today.

I look forward to seeing you all next time, goodbye.