Introduction | Get Started | Learn | Practice | Apply | Explore Further | Checkpoint
In the module, we will review:
• Effective costing plans
• How to develop a costing plan for an innovation project
• Frameworks to guide the costing process for commercialization
There is constant comparison with competitive products on the market to confirm that a new product has advantages to the users. After these studies, there is enough information to detail the market for the product and to draw up a complete market plan for launching the product, including market trials, methods of selling, promotion and advertising, and methods of distribution.
The production development differs if the present plant is to be used, or if a new plant is to be built, or if new equipment is to be bought or built. A preliminary process equipment design can be made or, if current plant is to be used, the layout and adaptation of this equipment for the new process determined. The production is ‘fine-tuned’ and quality assurance developed.
Costs and prices are studied, the investments needed for marketing and production are estimated and a financial analysis is made. Then the decision is taken to stop, or to test the market and production plans, or to allow the product to go forward to launching. The production and the marketing are integrated first in large-scale production and market testing, and then in an operational plan. A final commercial report, based on the information collected, analyses whether the product fits in with the commercial and financial aims of top management.
The steps and some of the activities in commercialization are shown below.
