Product Decision, Analysis and New Product Development

Presented by: Shreedevi Manivannan

Product Design
It is concerned with the form and function of a

product. Form design involves the determination of what a product should look like i.e., the shape and appearance of the product, what will it be made of (product structure) and how will it be made (process design). Functional Design deals with what functions the product will perform and how it performs these.

What Does Product Design Do?

Translates customer needs into

product/service requirement. Refining existing products (marketing) Developing new products (NPD) Formulating quality goals (QA, production) Formulating cost targets (accounting) Constructing and testing prototypes (marketing, production) Documenting specification (Product Design)

Objectives of Product Design

Overall objective is profit generation in the

long run To achieve desired product quality To minimize development time & cost To reduce the cost of the product To ensure producibility or manufacturability (Design for manufacture & Assembly)

Factors Influencing Product Design

Customer Requirements/Convenience of Operators Trade-off between Function & Form Types of materials used Work methods & equipments Cost/Price Ratio Product Quality Process Capability Effect on existing products Packaging

Characteristics of Good Product Design

Function or performance Appearance or aesthetics Reliability Maintainability Availability Producibility Simplification Standardisation

Approaches to Product Design

Designing for Customers (Quality Function Deployment)

Voice of the customers Designing for Manufacture & Assembly (DFMA) Over-thewall approach has now changed to Concurrent Engineering. Design
for Manufacture : Design compatible with organizations capability. Design for Assembly : Focus on reducing the number of parts of the product OR on assembly methods and sequence to be employed.
Specification (Detailed description of the product); Standardization (Reduces variety among a group of product); Simplification (elimination of complex features through product design)

Designing for ease of production:

Concurrent Engineering
Old over-the-wall sequential products design process

Each function did its work and

passed it to the next function

Improved Concurrent Engineering process

All functions form a design team

that develops specifications, involves customers early, solves potential problems, reduces costs, & shortens time to market

Approaches to Product Design

Designing for Quality : This includes a Robust

Design, Designing for Production, Designing for Automation & Design for Reliability Designing for Ergonomics (Human Factor Engineering) Designing for Environmental Protection (Green Designs & Universal Designs) Design for Disassembly & Recycling

Definition
New Product Development

Development of original products, product improvements, product modifications, and new brands through the firms own R & D efforts.

Why Go Into New Products Development?

A. Product Life Cycles B. Corporate Reasons for New Product

Development C. Marketplace Reasons for New Product Development D. Technological Reasons for New Product Development E. Governmental Influences on New Product Development

New Products Development Process

Guidelines and Objectives Concept Generation Business Analysis The Concept Refinement System Qualitative Refinement Quantification and the Blueprints Business Analysis Check Developing and Testing of Products Developing and Testing of Advertising and Packaging Business Analysis Check Market Test Business Plan Preparations and Full Scale Marketing

Guidelines and Objectives

A set of guidelines and very specific objectives (by

time period) for the new product development program. The guidelines and objectives should not only be cleared by top management, but also be disseminated to and agreed upon by all departments. New product development is a team effort. That is the reason why you need to agree from the very beginning on your guidelines and objectives.

Concept Generation
As part of your new product development program,

you will need to acquire a large number of new product concepts called concept portfolio A large number is very important. You should avoid dealing with one good idea. Always work, in the early stage, with a large number of ideas and handle them in convenient groups. Aim at satisfying known consumer needs, appropriate technology to be selected later.

Business Analysis
The whole objective of new product development is

to develop a business. This system allows us to sort our concepts by viewing them as potential business propositions. It will allow us to estimate future efforts before we spend any market research dollars. We must always keep in mind that our ultimate goal is to develop business, not product.

The Concept Refinement System Qualitative Refinement

The refinement process begins with focus group

interviews involving members of the target market. In the most simple case, three focus groups should suffice for up to six concepts. Each group consists of about 10-12 participants, and is moderated by a trained, professional moderator.

Objectives of the Concept Refinement System

It allows us to identify the new concepts that have some

general consumer interest. In any focus group, a large number of concepts will neither immensely interest nor be rejected by the consumer. The most important thing to be learned from the focus groups is the consumers understanding of the product concepts. Finally, you will have isolated a few new product concepts that appear to be interesting to the consumer, and the list of attributes for these concepts.

Quantification Process
Once the concepts have been polished by qualitative

research, we need to ascertain the nature and magnitude of the business proposition we are facing. Objectives of providing us with following data:

An estimate of each concepts sales potential Demographic (target) refinement (including psychographics) The Positioning Blueprint (for use in creating advertising, packaging, and naming the product) The Product Blueprint (for use by R&D)

Developing and Testing of Products

At this stage, you are able to submit the Product

Blueprint to the R&D/Manufacturing Group. This blueprint will not only tell them what is that you are aiming to market, but also allow them to judge the desirability of various trade-offs in the development process, because it will show the relative weights of various product attributes that are part of the product. During the development process a great deal of testing with the actual consumer should be done.

Quantification and the Blueprints

The sales volume figure is important because it will

be a key factor in your equation of just how desirable a business this new product concept really is. The blueprints are the most important output of this system.
Positioning Blueprint is the base for all consumer communications. Product Blueprint is the communication with the R&D/Manufacturing Group.

Positioning Blueprint

Product Blueprint

Business Analysis Check

To re-evaluate each concept utilizing the data from

the previous steps To use the same business analysis system applied in the Business Analysis step. To provide two additional and very important pieces of data

A rough sales potential projection for each concept To see much more clearly how the final product should appear, what must be built into it, and what you want to say about it.

Business Analysis Check

This is probably the last step you can make before

spending money in the marketplace. To utilize the latest trial and repeat-frequency data from product and advertising testing to prepare a tight financial plan. Using the business analysis system, you should make a last check of other variables to make sure that no large changes have occurred.

Market Test
There are two choices. First, a traditional test market-which

could be a geographical location (or a certain group of your consumer). Or, you can use a mathematical model that simulates conditions in your industry. The method you choose should yield the following: Very tight financial data. If you use an actual market, it should give you a great deal of data in the following areas: 1.Advertising weight and its relationship to consumer awareness and trial. 2.Marketing strategy and programs and further, trade strategy and programs

Technology at Every Step

Technological advancement is taking place by

leaps and bounds. Right from Idea Generation stage to Market Testing stage, technology paves the way for better R & D, reducing Turn-around-Time (TAT) and increasing efficiency for each process.

Thank You