Product Design & Development

Product Design &
Development
Velmurugan Sivaraman

PD&D - Product Design & Development
Agenda for the discussion
Introduction – Design & Disciplines
Factors inspiring PDD, Product Life Cycle (PLC)
Product Analysis
Value Engineering
Selection of materials
Selection of manufacturing process
Rapid prototyping & Summary

Introduction - Product
What is

Product refers to a physical product or service or an idea which a
customer or consumer needs and for which he is ready to pay.
Physical products include tangential goods like grocery items,
garments to name a few…

Services are intangible products which are offered and purchased by
consumers. Services may also include an innovative idea on any
aspect of operation

Benefits
Functional
benefits
Psychological
benefits
Social benefits
A consumer may purchase a product to get three types of benefits-Functional, Psychological
and Social benefits.
For example, the purchase of a motor cycle provides functional utility of a transportation, but at
the same time satisfy the need for prestige and esteem and provides social benefit by the way of
acceptance from a group, by riding the motor bike.
Thus all those aspects should be considered while planning for a product

Product
Consumer
products
Industrial
products

Introduction - Design
What is DESIGN?

Introduction – Design
Design is the human power to conceive, plan, and realize products
that serve human beings, in the accomplishment of any individual or
collective purpose.

Introduction – Design Disciplines
Applied Arts / Fine Arts:-
For aesthetics to objects of function and everyday use
For decorative purpose like Paintings, Portraits, etc.

Architecture:-
Usually for buildings and other physical structures
For aesthetics of objects

Fashion:-
For aesthetics or natural beauty to clothing and accessories
Influenced by cultural and social latitudes
For Garments, Texture, etc.

Gaming Industry:-
For content and rules of a game
Gameplay, environment, storyline and characters

Engineering Design:-
Preliminary design
Schematics, diagrams, layouts of the project
Detailed design
Operating parameters, Test, Materials, Packaging
Production planning and tool design
Jigs, fixtures, and tooling
Production

Mechanical Design
For Machines like Lathe, Drill, etc.
For Turbo-machines like Turbine, Propeller, etc.
For Automobile like Chassis, Transmission, etc.
For Components like Gears, Shafts, Joints, etc.

Introduction - Development
What is DEVLOPEMENT?

Introduction – Development
In business and engineering, new product development (NPD) is the
complete process of bringing a new product to market.

PD&D - What is a new product?
An old product
introduced in a new
market
An old product
packaged in a different
way
An old product
marketed in a different
way
A product that
significantly broadens
the market for an
existing product
A product that adopts
or replaces an existing
product
A product that opens
an entirely new market

PD&D - Type of new product?
•Innovative products
•New product lines – to allow the firm to enter an existing market
•Addition to product line – to supplement the firm’s existing product line
•Improvements and revisions of existing product
•Repositioned products – existing products targets at new market
•Cost reduction new product that provide similar performance at lower
cost

PD&D - Examples of new product?
•High definition TV, Curved TV,
ipod, flat screen TV, Probiotic
Ice Cream
New to the world
•SPEED by BPCL
Product
improvement &
replacement
•Moser Baer
Cost reduction
new product

PD&D - New products can be used to… …
Increase / defend market share by offering more choice or updating
older products
Appeal to new segments
Diversify into new markets
Improve relationship with distributors
Maintain the firm’s reputation a leading edge company
Even out peaks and troughs in demand
Make better use of the organization's resources

PD&D - Why develop new products?Tocreatestars
andcashcowsfor
thefuture
Toreplace
decliningproduct
Totake
advantageofnew
technology
Todefeatrivals
Tomaintain/
increasemarket
share
Tokeepupwith
rivals
Tomaintain
competitive
advantage
Tofillgapinthe
market

PD&D - New Product Planning
This is the strategic stage
The firm
assesses
1. It current product portfolio
2. Opportunities and threats
The firm then determines the type of product which
would best fit in with the corporate strategy

PD&D - New Product Development
New product development is a process which is designed to
design, develop, test (verification & validation) and consider
the viability of products which are new to the market in order
to ensure the Growth or survival of the organization.

PD&D – Stages in New Product development (NPD)

PD&D
Idea generation
Idea generation is continuous, systematic search for new
product opportunities. It involves delineating sources of new
ideas and methods for generating them
Ideas for new products can be obtained from basic research
using a SWOT analysis (OPPORTUNITY ANALYSIS), Market and
consumer trends, company's R&D department, competitors,
focus groups, employees, salespeople, corporate spies etc.

PD&D
Idea screening
The object is to eliminate unsound concepts prior to devoting resources to them
The screeners must ask these questions
Will the customer in the target market benefit from the product?
What is the size and growth forecasts of the market segment/target market?
What is the current or expected competitive pressure for the product idea?
What are the industry sales and market trends the product idea is based on?
Is it technically feasible to manufacture the product?
Will the product be profitable when manufactured and delivered to the customer at
the target price?

PD&D
Concept development & testing
Concept development & testing present the
consumer with a proposed product and measure
attitudes and intention at this early stage of
development
Concept development & testing of prototypes can
help avoid costly mistakes.

PD&D
Market strategy development
Includes development of three part strategy plan
Describe the market’s size, structure, and behavior, the planned
product positioning, and the sales, market share, and profit goals
for first few years.
Outlines the planned price, distribution strategy, and marketing
budget for the first year.
Describes the long-run sales and profit goals and marketing-mix
strategy over time

PD&D
Feasibility Study / Business Analysis
Estimate likely selling price based upon competition and
customer feedback
Estimate sales volume based upon size of market
Estimate profitability and breakeven point

PD&D
Product design
Develop concept into physical product prototype
Large jump in investment – “point of no return”.
Test and refine prototype until product passes consumer
and legal scrutiny

PD&D
Test marketing
Test marketing involves placing a product for sale in one
or more selected areas and observing its actual
performance under the proposed marketing plan

PD&D
Market Entry / Commercialization
Commercialization involves implementing a total
marketing plan and full production
Launch the product
Produce and place advertisements and other
promotions
Fill the distribution pipeline with product
Critical path analysis is most useful at this stage

Product Design & Development
what makes a successful product?

Introduction

Thus management finds
itself in dilemma, it must
develop new products
to remain competitive in
the market, yet there is
heavy risk against their
success.
Introduction

Factors to study for PDD
Product Identification related factors
Gapindemand
–Demand>
Supply
Underutilized
resources–
contract
manufacturing/
lendingof
facilities
Diversification–
Limited
customerbase
Newproduct
Ideas–friends,
Co-workers,
environment
etc.

Marketing related factors
Prestigeofthe
company
Technologically
soundproduct
Customer
requirement
Marketpotential
Productlife
Competition

Finance related factors
Capitalinvestment–
Manufacturing
resources,plant&
machinery
Cashgeneration
Restrictionon
finance
Governmentsupport
Shares
Fixeddeposits
Marketborrowings

PLC - Product life cycle
a) Describes the stages a new product goes through
from beginning to end
b) Is a tool used by marketing professional to understand
the market, and plan the marketing mix

The life cycle of a product

Product life cycle stages
Early stages of product life cycle
a. Introduction
b. Growth
Later stages of product life cycle
a. Maturity
b. Decline
Facility and process investment
depends on product life cycle.
PLC - Product life cycle

PLC - Product Launch
Also called MARKET INTRODUCTION
i. An expensive phase
ii. High costs are associated with design,
manufacturing, promotional activities,
and inventory to meet anticipated
demand
iii. Other costs include new packaging,
labeling and market research
iv. Who buys new products?
Early Adopters

PLC – Push & Pull
1. Push
a. Marketers focus on the product placement
and obtaining preferential shelf and floor
space
2. Pull
a. Create advertisements that create a “BUZZ”
for the product
b. Many use samples, coupons, and other
promotional techniques

PLC - Characteristics
1. High Investment – Low profit
2. Minimal competition
3. Company tries to create acceptance and gain
initial distribution
4. Company needs both PUSH & PULL promotions
5. Targeted towards customers to increase
awareness and demand for product
6. Targeted towards channel to increase confidence
in the product

PLC- Summary
Full-Scale Launch of New Products
1) High failure rates
2) Little competition
3) Frequent product modification
4) Limited distribution
5) High marketing and production costs
6) Negative profits
7) Promotion focuses on awareness and information
8) Intensive personal selling to channels

PLC - Growth
1. Once the early adapters find and
use a new product, other
consumers are likely to follow
2. The product is visible, either in
daily life or in media, and
consumers see neighbors and
friends using it
3. Viral marketing is important
(Word of mouth)

Growth
1. Most crucial stage for marketers as a product will either catch
up or fail
2. If a product is removed from market before it has recovered
the costs, it is called a “BUST”

PLC - Growth

PLC – Growth Characteristics
1. Product is successfully launched
2. Demand and distribution increase
3. Competition intensify
4. Company might introduce
secondary products or support
services
5. Better revenue generation and ROI

PLC - Growth Summary
Offered in more sizes, flavors, options
1) Increasing rate of sales
2) Entrance of competitors
3) Market consolidation
4) Initial healthy profits
5) Promotion emphasizes brand ads
6) Goal is wider distribution
7) Prices normally fall
8) Development costs are recovered

Maturity
1. Period during which sales of a product
increase more slowly, if at all
2. Marketers keep the name of their
brand in front of consumers and
reminds them of the product’s features
(UTILITY) and lasting power

PLC – Maturity Characteristics
1) Competition is great
2) Product is established and promotion
expenditures are less
3) Little growth potential for the product
4) Penetration pricing, and lower profit
margins
5) The major focus is towards extending the
life cycle and maintaining market share
6) Converting customers product to your
own is a major challenge in maturity
stage

PLC - Maturity Summary
Many consumer products are in Maturity Stage
1) Declining sales growth
2) Saturated markets
3) Extending product line
4) Stylistic product changes
5) Heavy promotions to dealers and consumers
6) Marginal competitors drop out
7) Prices and profits fall
8) Niche marketers emerge

PLC - Decline
1. Unable to find new customers for a given
product or service, that product is in DECLINE
stage
2. A temporary decline may be reversed by
changing the price or a new advertising
campaign
3. If efforts are unsuccessful, the company can
look to redesign, repackage, or reformulate
their marketing efforts.

Decline – Decision point stage
Options
1) Maintain the product in hopes that the
competitors will exit
2) Reducing the marketing support and coast
along until no more profit can be made
3) Discontinue the product when no more profit
can be made or there is a successor product
4) Modify the product and prelaunch it as “NEW
& IMPROVED”

PLC – Decline Summary
Rate of decline depends on change in tastes or
adoption of substitute products
1) Long-run drop in sales
2) Large inventories of unsold items
3) Elimination of all nonessential marketing expenses

Summary - PLC

Cause of NEW PRODUCT’s failure
A. Overestimation of Market Size
B. Product Design Problems
C. Product Incorrectly Positioned, Priced or Advertised
D. Costs of Product Development
E. Competitive Actions
F. To create successful new products, the company
must:
understand it’s customers, markets and competitors
develop products that deliver superior value to
customers

Product analysis

Product analysis
Additional
considerations
Ithastobe
manufactured
andassembled–
minimumand
ease
Additional
considerations
Producthasto
work
Additional
considerations
Ithastosell
Additional
considerations
Itmustbe
profitable

Product analysis – Several aspects are considered

Value engineering concept
a) The purpose of value analysis is to improve the quality of the
product while maintaining or reducing it’s costs - in short, get
more for less
b) All the material qualities and operations that are duplicative
should be done away with in order to reduce unnecessary
costs
c) Globally competitive environment
Important questions
How companies are able to launch a new product with upgraded
quality at a lower price?
Are these companies selling at loss?
Are they manipulating with quality and performance of
the product?
The answer to last two questions is “NO”

what is Value engineering?
Is it cost
reduction
Is it item
elimination
Is it function
deletion
Is it use of
cheaper
material
Is it use of
lower cost
process
Answer to
all these
questions is
No. It is
more than
this.

Value engineering… … … … …
In 1947 a vice president at General Electric, HARRY ERLICKER,
observed the occurrence of a rather unusual phenomenon
that had been appearing throughout the industry… … …
And that unusual phenomenon led to the development of
VALUE ENGINEERING
Definition
The society of American value engineering defines the value
engineering as “the systematic application of recognized
techniques which identify the function of a product or
service, establish a monetary value for that function, and
provide the necessary function reliably at the lowest overall
cost.

Selection of materials
An ever increasing variety of materials are now available, each having it’s own
Characteristics
Applications
Advantages
Limitations
The challenge is to select the optimal material according to the requirement

Variety of materials
Variety of materials
Ferrous metals
Non ferrous metals (aluminum, magnesium,
copper, nickel, titanium etc.)
Plastics (thermoplastics / thermosets)
Ceramics and diamond
Composite materials
Nano-materials, shape memory alloys

Factors considered for selection of materials

Criteria for selection of material

Selection of manufacturing process
Quality
requirement
s(surface
finishetc…)
Volumeofthe
product
Sizeofthe
product
Shapeofthe
product(Intricacy
andComplexity)
Materialofthe
product
Themanufacturing
processisselected
basedonthefollowing
factors

Rapid prototyping
What is prototyping?
A preliminary and original full or small scale and usually
functional version of something (new design or
construction)that has been or will be copied or will be
developed.
Why a prototype is needed?
To realize conceptualization of a design
For testing (functional, performance, durability, etc.)&
analysis modification in the actual product
Required before the full scale production of the
product.

what is Rapid prototyping?
Rapid - Fast
Prototyping
Making a first full or scale and usually functional version
of a new design or a construction
Definition of rapid prototyping
“Fabrication of a physical 3–Dimensional part of any
arbitrary shape directly from a CAD database by a
quick , highly automated and totally flexible process”

CAD / CAM
CAD/CAM = Computer Aided Design and Computer Aided
Manufacturing. It is the technology concerned with the use of
computers to perform design and manufacturing functions.
CAD can be defined as the use
of computer systems to perform
certain functions in the design
process
CAM is the use of computer
systems to plan, manage and
control the operations of
manufacturing plant through
either direct or indirect
computer interface with the
plant’s production resources

CAD / CAM
In order to
establish the
scope and
definition of
CAD/CAM in
an engineering
environment
and identify
existing and
future related
tools, a study of
a typical
product cycle
is necessary.
The following
Figure shows a
flowchart of
such a cycle.
The Manufacturing Process
The Design Process
Synthesis
Analysis The CAD Process
The CAM Process
Design
needs
Design definitions,
specifications, and
requirements
Collecting
relevant design
information and
feasibility study
Design
conceptualization
Design
modeling and
simulation
Design
analysis
Design
optimization
Design
evaluation
Design
documentation and
communication
Process
planning
Order
materials
Design and
procurement of
new tools
Production
planning
NC, CNC, DNC
programming
Production
Quality
control Packaging
Marketing
Shipping

CAD / CAM
The product begins with a need which is identified based
on customers' and markets' demands
•The product goes through two main processes from the
idea conceptualization to the finished product
The main sub-processes that constitute the design
process are
•Synthesis
•Analysis

Summary

Client – User – Designer Relation
• who has objectives that must
be realizedClient
• who have their own wishesUsers
• who must design something
that can be built and that
satisfies everybody
Designer

Summary
Thank You
Questions

Product Design & Development

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