Lesson video

Hello, thank you for joining me for your design and technology lesson.

My name is Mrs. Conway, and I will be guiding you through your learning today.

So today's lesson outcome is: "I can identify and understand the factors in making products commercially viable," and these are our keywords.

We have "commercial viability," "profit," and "target market." I'll go through each one of these as we work through the lesson.

So the first thing we're going to look at then is commercial viability.

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

A profit is the money a business earns after paying all of its costs.

In other words, it basically asks: can this product make money and work well once it's been manufactured? Quick check for understanding on that first slide, then.

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 here just to take a moment to think about your answer.

Okay, and the correct answer was C, profit.

So the money a business earns after paying all of its costs is the profit.

Well done if you got that right.

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

Commercial viability helps businesses make smart decisions about things like materials, manufacturing, pricing, and also marketing.

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

Now, without commercial viability, a product idea might fail.

Even if it is aesthetically pleasing or works well, if it's not commercially viable, it may fail.

And to ensure a product is commercially viable, a designer needs to consider this throughout the whole design process.

It can't just be an afterthought at the end of the process.

So here are two examples of kettles.

On the left, we have an Alessi designer kettle, and on the right, we have a non-designer kettle.

The Alessi kettle retails at over 100 pounds, whereas the kettle on the right retails at approximately 30 pounds.

Now, both of these kettles are commercially viable despite being very different in price.

Why do you think this is? Just take a moment to think about this, and you might want to talk about it with people next to you.

Why do you think both of these kettles are commercially viable, even though they are very different price points? Just pause the video here if you'd like to take a moment to think about this question.

Both kettles are commercially viable because they are aimed at different target markets.

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

Quick check for understanding on that point, then.

The specific group of people a product is designed and sold for, are they called? A, target market; B, consumer; or C, demographic? Pause the video here.

Just take a moment to think about your answer.

And the correct answer was the target market.

So specific group of people a product is designed and sold for are called the target market.

Let's go back to our kettles.

The expensive kettle appeals to customers who want high-quality materials, advanced features, stylish design, and are willing to pay more for those things or are able to pay more as well.

The lower-cost kettle is aimed at customers who just want a basic, affordable product to boil water.

Each kettle meets the needs and the price expectations of its own target market.

So both can sell well and also make a profit.

It's going to be over to you now to have a go at a couple of tasks.

The first thing I'd like you to do is to define commercial viability.

What do I mean by that? The second thing I'd like you to do is to explain why it is important for designers to consider commercial viability throughout the whole design process.

Pause the video here to have a think and have a go at both of these tasks.

So the first thing I asked you to do was to define commercial viability.

Let's just look at an example answer.

Commercial viability means whether a product can be successfully made, sold, and make a profit.

Just compare that to your answer.

The next thing I asked you to do was to explain why it is important for designers to consider commercial viability throughout the design process.

Okay, let's have a look at a sample answer.

Designers should consider commercial viability throughout the design process so they don't waste time or money on a product that won't sell.

They can 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.

Again, just compare your answer to that.

It won't read exactly the same, but have you got the key points? So next, we're going to look at 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 look at cost, target market, materials and processes, competition, and profit.

Right, which of the below do designers consider to ensure their product is commercially viable? Is it A, designer's favorite color; B, prototype materials; C, profit; or D, target market? Pause the video here.

Just take a moment to think about your answer.

And the correct answer, you have two options here: profit and target market.

Both of these things need to be considered to ensure a product is commercially viable.

So let's look in more detail then at how we ensure a product is commercially viable.

So the first thing we need to consider is cost.

Is it affordable to make and sell at a good price? Now, to do this, we need to really think about how much it costs to actually produce the product, and that includes things like the materials, the manufacturing processes, labor, and also the packaging.

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

Designers aim to keep costs low so they can sell the product at a price that people are willing to pay and still make a profit.

So if we have the cost to the manufacturer, we then consider the price that it's sold at.

Anything more than its cost to manufacture is the profit.

So by keeping the cost to manufacture as low as possible, you can hopefully try to increase the amount of profit made.

Next, we consider the target market.

Now, the target market is the group of people the product is designed for, and that's usually a group of people such as teenagers, parents, or athletes.

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 won't sell.

Designers often do market research, and they do this to help them understand their target market before making a product.

It's to make sure that they actually understand what their wants and needs are.

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

Your research may tell you that they need it to be lightweight, durable, stylish, and easy to carry because those features suit the lifestyles of their target market.

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

Next, we consider materials and processes.

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

So, for example, if a designer chooses a rare or imported material, it might cause delays in delivery or increase the costs.

By using standard materials and efficient manufacturing methods, this helps to keep the production smooth and affordable.

Remember, the lower the cost to manufacture, the more the profit.

Okay, quick check for understanding on what we've covered, then.

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 cost; C, it guarantees the product will be more popular; or D, it will improve the product's color? Pause the video here.

Just take a moment to think about your answer.

And the correct answer was B.

So if you choose to have rare or imported materials, then it could cause delays and increase costs, which in turn affects the commercial viability of your product.

Next, we consider competition.

Now, if there are many similar products already, it can be harder to break into the target market.

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

Maybe it has a lower cost or is more stylish, more sustainable, or has better features.

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

A really common example of this is games consoles.

They are constantly thinking about how their product is going to be more appealing to the target market to make sure that it is commercially viable.

Now, research is vital to ensuring designers know about similar products, and this can be done by carrying out an existing product analysis, for example.

So Lucas here is just explaining: "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." Existing product analysis is really, really useful for this kind of research when you're trying to decide what is going to be your main competition.

Okay, next, we look at profit.

Now, a product needs to make more money than it costs to produce and sell.

We've gone through that.

Now, this is called, if you remember, making a profit.

Now, a product that is aesthetically pleasing but doesn't make any money isn't commercially viable.

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

Now, all of these areas that we've been through have to be considered and be in balance to make sure the product is commercially viable.

Let's just remind ourselves of what those were.

Cost, target market, materials and processes, competition, and profit.

Okay, it's going to be over to you now to have a go at another task.

I'd like you to consider your own product and carry out research into each of the below to check and ensure the commercial viability of it, and you might decide to make some changes based on that research.

Let's just remind you then of what those areas are.

They are cost, target market, materials and processes, competition, and profit.

Okay, pause the video here to have a go at this task, and good luck.

Right, how did you get on? Hopefully, you got a lot of research that gave you more information on making sure your product can be commercially viable.

Let's just look at an example from Andeep here, and of course, this will be different to yours, but just look at what he's considered and make sure you considered yours thoroughly as well.

So, he's looked at competition and target market.

I did ask you to do all of them, though.

We're just gonna look at his examples of competition and target market for now.

So under competition, he has said, "I looked at other products similar to mine on the market and found out most are made out of polymers and retail at 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." He also looked into his target market: "Now, I considered my target market from the start of the design process and designed aspects of it to suit them and their needs and wants.

So I'm confident that it will appeal to them." Remember what we talked about, the fact that you need to consider these things from the start of the design process.

Here, for target market, Andeep has done that, and that will help to ensure the commercial viability of his product.

Let's summarize today's lesson, then.

Today, we've been looking at commercial viability.

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

Commercial viability helps businesses make decisions about things like materials, manufacturing, pricing, and marketing.

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

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

Well done for all of your hard work today.

Thank you so much for joining me for the lesson, and I will see you soon.