Susan,
Not an easy question. This is just off the top of my head:
These are just some of the things you need to consider when designing:
MarketWhat is the need you are addressing?
What is the problem you want to solve?
What it the target market?
What are the trends in society check out:
http://www.faithpopcorn.com/Who is the user?
Who is the purchaser/decision maker? (not always the end user)
How much are they willing to pay?
What is your competitive advantage?
PhysicalSize
Weight
Ease of use, ergonomics, fit to your hand or body
Color
Will it need to be painted or decorated?
EmotionalWow factor
What makes your product different?
What is the overall appearance, it it ugly or nice to look at?
What are some emotional triggers that would compel someone to buy the product
Safety concerns like BPAs in food or water products
Engineering/ManufacturingHow much will it cost to produce?
What is the material or materials to be used?
Recyclable-think green
What type of manufacturing process will be used?
Can you reduce the number of parts?
Government regulations (FDA, Toy Safety Standards, UL approval, etc.)
I'm sure there are more but this should get you thinking.