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Product Design and

Development

Product Design and

Development

Chapter 2:

PRODUCT DEVELOPMENT

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2.2 PRODUCT DEVELOPMENT PROCESS 2.1. INTRODUCTION

-This chapter lays out a product development process that is more encompassing than the engineering design process described in Chap. 1.

- This chapter presents organizational structures for the design and product development functions and discusses markets and the vital function of marketing in detail.

- Since the most successful products are often innovative products, the chapter are concluded with some ideas about technological

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2.2.1 Factors for Success

 The quality, performance, and price of the product.

 The cost to manufacture the product over its life cycle.

 The cost of product development.

 The time needed to bring the product to the market.

Profit = Product Price - Product Cost

 only two ways to increase profit:

- increase the product’s price, justified by adding new features or improving quality

- reduce the product’s cost, through improvements in the production process.

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Increased sales revenue due to extended product life and larger

 short development cycle (early product release)

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2.2.1 Factors for Success

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2.2.2 Static (automobiles) Versus Dynamic Products (cell phone)

Static products exist in a market where the customer is not eager to change, technology is stable, and fashion or styling play little role. These are markets characterized by a stable number of producers with high price competition and little product research. The users are generally familiar with the technology and do not demand

significant improvement => emphasis is more on manufacturing research than on product design research.

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2.2.3 Variations on the Generic Product Development Process  product is being developed in response to an identified market need => market pull.

 company starts with a new proprietary technology and looks for a market in which to apply this technology => Technology push.

Often successful technology push products involve basic materials or basic process technologies

 A platform product is built around a preexisting technological subsystem. Ex: Apple Macintosh operating system or the Black & Decker doubly insulated universal motor. A platform product is similar to a technology push product in that there is an a priori assumption concerning the technology to be employed.

However, it differs in that the technology has already been demonstrated in the marketplace to be useful to a customer

=> the risk for future products is less.

Customized products are those in which variations in

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2.3. PRODUCT AND PROCESS CYCLES 2.3.1 Stages of Development of a Product

product change is rapid

emphasis on custom

tailoring

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2.3. PRODUCT AND PROCESS CYCLES 2.3.1 Stages of Development of a Product

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2.3. PRODUCT AND PROCESS CYCLES

2.3.2 Technology Development and Insertion Cycle

Simplified technology

development cycle Transferring from one technology to another developing technology

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2.3. PRODUCT AND PROCESS CYCLES

2.3.3 Process Development Cycle

-Some differences in terminology when dealing with processes instead of products. For example prototype (product) pilot plant (process)

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2.4 ORGANIZATION FOR DESIGN AND PRODUCT DEVELOPMENT

Spectrum of engineering

2.4.1 A Typical

Organization by Functions

Unless effective

communication can be maintained between

engineering and manufacturing and marketing, it will not

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cost-2.4 ORGANIZATION FOR DESIGN AND PRODUCT DEVELOPMENT

2.4.2 Organization by Projects

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2.4 ORGANIZATION FOR DESIGN AND PRODUCT DEVELOPMENT 2.4.3 Hybrid Organizations

Project managers are responsible for

scheduling, coordination, and arranging meetings

Functional managers are responsible

for budgets, personnel matters, and performance evaluations.

Project manager has complete

budgetary authority, makes most of the resource allocation

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2.4 ORGANIZATION FOR DESIGN AND PRODUCT DEVELOPMENT 2.4.3 Hybrid Organizations

- The functional organization or the lightweight project organization works well in a stable business environment, especially one where the product predominates in its market because of technical

excellence.

- A heavyweight project organization has advantages in introducing radically new products, especially where speed is important.

2.4.4 Concurrent Engineering Teams

-Concurrent engineering is a systematic approach to the integrated concurrent design of products and their related processes, including manufacture and support. With this approach, product developers consider all aspects of the product life cycle, from concept to disposal, including quality, cost, schedule…

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2.5 MARKETS AND MARKETING 2.5.1 Markets

The market is an economic construct to identify those persons or organizations that have an interest in purchasing or selling a particular product, and to create an arena for their transactions.

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2.5 MARKETS AND MARKETING

2.5.3 Functions of a Marketing Department

The marketing department in a company creates and manages the company’s relationship with its customers. It is the company’s window on the world with its customers. It translates customer

needs into requirements for products and influences the creation of services that support the product and the customer. It is about understanding how people make buying decisions and using this information in the design, building, and selling of products. The marketing department also plays a vital role in assisting with the introduction of the product into the marketplace. Marketing does not make sales

2.5.4 Elements of a Marketing Plan

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2.5 MARKETS AND MARKETING

 Evaluation of market segments, with clear explanation of reasons for choosing the target market

 Identify competitive products

 Identify early product adopters

 Clear understanding of benefits of product to customers

 Estimation of the market size in terms of dollars and units sold, and market share

 Determine the breadth of the product line, and number of product variants

 Estimation of product life

 Determine the product volume/price relationships

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2.6 TECHNOLOGICAL INNOVATION

2.6.1 Invention, Innovation, and Diffusion

Generally, the advancement of technology occurs in three stages:

 Invention: The creative act whereby an idea is conceived, articulated, and recorded.

 Innovation: The process by which an invention or idea is

brought into successful practice and is utilized by the economy.

 Diffusion: The successive and widespread implementation and adoption of successful innovations.

A market-pull model for technological innovation

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2.6 TECHNOLOGICAL INNOVATION

2.6.2 Business Strategies Related to Innovation and Product Development

Star businesses : High sales growth potential, high market share potential

Wildcat businesses : High sales growth potential, low market share Cash-cow businesses : Low growth potential, high market share Dog businesses : Low growth potential, low market share

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2.6 TECHNOLOGICAL INNOVATION

2.6.3 Characteristics of Innovative People

Roberts 15 have identified five behavioral types of people who are needed in a product team devoted to technological innovation.

Idea generator: The creative individual

Entrepreneur: The person who “carries the ball” and takes the risks

Gatekeepers: People who provide technical communication from outside to inside the product development organization

Program manager: The person who manages without inhibiting creativity

Sponsor: The person who provides financial and moral support, often senior management or a venture capital company

2.6.4 Types of Technology Innovation Need-driven innovation (technology pull)

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2.6 TECHNOLOGICAL INNOVATION 2.7. SUMMARY

The keys to creating a winning product are:

 Designing a quality product with the features and performance desired by its customers at price they are willing to pay

Reducing the cost to manufacture the product over its life cycle

Minimizing the cost to develop the product

Quickly bringing the product to market

For minimizing the time to market, some kind of project team is required. Generally, a heavyweight matrix organization with

appropriate management controls works best.

Marketing is a key function in product development. Products can be classified with respect to markets in several ways:

- Developed in response to market pull or technology push -A platform product that fits into an existing product line

- A process-intensive product whose chief attributes are due to the processing

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2.6 TECHNOLOGICAL INNOVATION 2.7. SUMMARY

Many products today are based on new and rapidly developing technologies. A technology evolves in three stages:

Invention—the creative act by which a novel idea is conceived

Innovation—the process by which an invention is brought into successful practice and is utilized by the economy

Diffusion—the widespread knowledge of the capabilities of the innovation

References

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