Key Questions that Should Precede New Product Development

Addressing issues before starting product development

This paper identifies six issues that 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.

Finally, the paper highlights the importance of product development in making MFIs market-responsive. The more client-responsive products:

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

About this Publication

By Wright, G., Brand, M., Northrip, Z., Cohen, M., McCord, M. & Helms, B.