New Product Development

• Companies must be constantly modifying

existing products and developing new ones;
the marketplace demands it.
• How new is new? most new products are
modifications of or extensions to existing
ones.
• The introduction of a new product is a
strategic decision which should be guided by
the company’s goals and a new product
introduction strategy.
 Why need new product
• To replace declining products.
• To maintain/increase market share.
• To maintain competitive advantage.
• To fill a gap in the market.
• To bring a new customers.

Causes of New Product Failures

• Overestimation of Market Size

• Design Problems
• Product Incorrectly Positioned & price
• Costs of Product Development
• No access to the market
• Bad timing
 Product Attributes
• Product attributes define the characteristics of products,
enabling you to uniquely describe a product.
• Option attributes include details about a product that
shoppers can configure, such as size or color.
• Property attributes include inherent details about a product
that shoppers cannot configure, such as brand or material.
A product’s attributes are what makes it distinct
from other products.
Attributes include things like size, color, flavor, package type and
other features that are relevant to the category.
Organizing for Product Development (1 of 2)

• Historically – distinct departments

– Duties and responsibilities are defined
– Difficult to foster forward thinking
• Today – team approach
– Representatives from all disciplines or functions
– Concurrent engineering – cross functional team
Organizing for Product Development (2 of 2)

• Traditional Approach
– “We design it, you build it” or “Over the wall”

• Concurrent Engineering
– “Let’s work together simultaneously”
 “Over the Wall” Approach

New
Product

Mfg Design
Breaking Down Barriers to Effective Design
 Design Teams

 Marketing, manufacturing,
engineering purchasing personnel
 Suppliers, dealers, customers
 Lawyers, accountants, insurance
companies
 Concurrent Engineering: Defined
Concurrent engineering is the bringing together of personnel from
various functions together early in the design phase.
CE can be defined as the simultaneous development of project design
functions, with open and interactive communication existing among
all team members for the purposes of reducing time to market,
decreasing cost, and improving quality and reliability
Time savings are created by performing activities in parallel
 Trends in Product & Service Design

Increased emphasis on or attention to:

Customer satisfaction (by translating customer wants and
needs into product and service requirements)
Reducing time to introduce new product or service
Reducing time to produce product
 Trends in Product & Service Design
Increased emphasis on or attention to:
The organization’s capabilities to produce or deliver the
item
Refining existing products and services
Environmental concerns
Designing products & services that are “user friendly”
Designing products that use less material
 Global Product Design
 Virtual teams
 Uses combined efforts of a team of designers working in
different countries
 Provides a range of comparative advantages over traditional
teams such as:
Engaging the best human resources around the world
Possibly operating on a 24-hr basis
Global customer needs assessment
Global design can increase marketability
 Design Guidelines
 Produce designs that are consistent with the goals of the company

 Take into account the operations capabilities of the organization in

order to achieve designs that fit with those capabilities

 Take into account the cultural differences related to product design

(for multinationals)

 Give customers the value they expect

 Make health and safety a primary concern

 Consider potential harm to the environment

 Design Quidelines

• Increased emphasis on components commonality

• Package products and services
• Use multiple-use platforms
• Consider tactics for mass customization
• Look for continual improvement
• Shorten time to market
 What is product design ?
Product design is the process of creating a
new product to be sold by a business to its
customers.

It is essentially the efficient and effective

generation And development of ideas
through a process that leads to new
products.
Suzuki's latest patent filings reveal a hybrid motorcycle design* (2020)
The level of detail in the drawings show that Suzuki may already have a prototype of some
sort
 Peter Tsai invented the core filtration material used in N95 masks. He had retired in 2019,
only to be called back by national labs, firms and healthcare workers facing shortage of
masks.

Since the outbreak, the 68-year-old inventor has been fighting the pandemic on two
fronts —
1. rapidly scaling up production of N95 masks and
2. finding new techniques to sterilise them for re-use.
 What makes the process of filing for patents absolutely crucial?
According to Audi, is that while many rivals purchase electric drive technologies, the German
car maker often relies on in-house development
The future is electric and Audi is well aware of the firm direction
global mobility is charging towards. The company recently announced
that its technical development team - also called Audi TE - had filed
more than 1,200 patents for electric drives in 2019 alone.

Underlining how digitalization and electric mobility top the list of

main emphasis points, Audi has informed that it currently holds
around 13,000 patent families across the world which translates to
23,000 individual patents and patent applications.

It is crucial to protect the development work being

carried out and filing for patents, therefore, becomes
almost as crucial as the development work itself.
Why is product design concept
used ?
Profit Maximization in Long run

Upgrade desired product quality

Reduce development time and cost to

minimum

Ensure producibility or
“Customers don’t care about your solution.
They care about their problems. Keeping
problem space and solution space separate and
alternating between them, as you iteratively
test and improve your hypotheses, is the best
way to achieve product-market fit.”

“Customers don’t care how much time

something takes to build. They care only if it
serves their needs.”
Steps in Product
Designing
 Idea Generation
Customer & competitor

research

Brainstorming sessions

Surveys

Customer input

Research & Development

team
 Concept screening

Is there a real, clearly

defined customer need
or want for this product
or service ?

Can we fully develop

this product or
service ?

Is the profit potential for

this product large
 Competitive analysis
“ Best of ” ideas are
incorporated to mitigate
any competitor advantage.

Verify buyer market

size for similar
offerings to validate
development
investment.
 Concept Testing
Principle target is to
quantify actual
customer enthusiasm
for the product or
service.

Get solid feel that the

market of buyers is
genuinely interested in
the concept before we
develop it into a
tangible offering
 In-depth analysis
Formal list of
features & benefits,
key USP (unique
selling proposition),
etc.
Summary of all
resources needed
for development.
Marketing plan with
ROI projections.
Summary of
competitive products,
 Prototype Development
Product name, specific marketing
messaging, etc, are solidified.
Prospective buyers review the prototype
and asked if they like it, would they buy
it, what would make it better, etc.
 Commercialization
The product is finalized
and launched full
scale
 Product Life-Cycle Strategies
• Product life cycle (PLC): the course of a
product’s sales and profits over its life
 Introduction Growth Maturity Decline

Best period to increase Practical to change price or Poor time to change image, price, or Cost control critical
market share quality image quality
R&D product engineering Strengthen niche Competitive costs become critical
critical
Defend market position

Drive-thru restaurants Fax machines

Company Strategy/Issues

3 1/2” Floppy
disks
CD-ROM

Sales
Station wagons
Internet
Color copiers

HDTV

Product design and development Forecasting critical Standardization Little product differentiation
critical Product and process reliability Less rapid product changes - more Cost minimization
Frequent product and process design Competitive product improvements minor changes
changes Over capacity in the industry
and options Optimum capacity
Short production runs Increase capacity Prune line to eliminate items not
Increasing stability of process
returning good margin
High production costs Shift toward product focused
Long production runs
Limited models Enhance distribution Reduce capacity
Product improvement and cost
OM Strategy/Issues

Attention to quality cutting

Product Life Cycle, Sales, Cost, and
Profit
Cost of
Development
& Manufacture
Sales Revenue
Sales, Cost & Profit .

Profit
Cash flow
Loss
Time

Introduction Growth Maturity Decline

 Product Life Cycle
Introduction
• Fine tuning
– research
– product development
– process modification and enhancement
– supplier development
• Low sales
• High cost per customer acquired
• Negative profits
• Innovators are targeted
• Little competition
 Product Life Cycle
Growth
• Product design begins to stabilize
• Effective forecasting of capacity becomes
necessary
• Adding or enhancing capacity may be necessary

• Rapidly rising sales

• Average cost per customer
• Rising profits
• Early adopters are targeted
• Growing competition
 Product Life Cycle
Maturity
• Competitors now established
• High volume, innovative production may be
needed
• Improved cost control, reduction in options,
paring down of product line

• Sales peak
• Low cost per customer
• High profits
• Middle majority are targeted
• Competition begins to decline
 Product Life Cycle
Decline
• Unless product makes a special contribution, must
plan to terminate offering

• Declining sales
• Low cost per customer
• Declining profits
• Slackers are targeted
• Declining competition
 Product Development without
Coordination
As the customer As Marketing
wanted it. interpreted it.

© 1984-1994 T/Maker Co. © 1984-1994 T/Maker Co.

As Engineering As Operations made it.

designed it.

© 1984-1994 T/Maker Co. © 1984-1994 T/Maker Co.

 Trends in Product & Service Design (1 of 2)

Increased emphasis on or attention to:

Customer satisfaction (by translating customer wants and
needs into product and service requirements)
Reducing time to introduce new product or service
Reducing time to produce product
Trends in Product & Service Design (2 of 2)
Increased emphasis on or attention to:
The organization’s capabilities to produce or deliver the
item
Refining existing products and services
Environmental concerns
Designing products & services that are “user friendly”
Designing products that use less material
 Global Product Design
 Virtual teams
Uses combined efforts of a team of designers working
in different countries
Provides a range of comparative advantages over
traditional teams such as:
Engaging the best human resources around the
world
Possibly operating on a 24-hr basis
Global customer needs assessment
Global design can increase marketability
 Design Guidelines (1 of 2)
 Produce designs that are consistent with the goals of the
company
 Take into account the operations capabilities of the
organization in order to achieve designs that fit with those
capabilities
 Take into account the cultural differences related to
product design (for multinationals)
 Give customers the value they expect
 Make health and safety a primary concern
 Consider potential harm to the environment
 Design Quidelines (2 of 2)

• Increased emphasis on components commonality

• Package products and services
• Use multiple-use platforms
• Consider tactics for mass customization
• Look for continual improvement
• Shorten time to market
Opportunity Identification

for

Product development
 Opportunity
• Horizon 1: improvements, variants, and
cost reduction of existing one.
• Horizon 2: new territory of one or both
of the market and technology
dimensions.
• Horizon 3: New category of
product/service with great uncertainty.
https://youtu.be/IF-IYkU0gmQ
the SOLAR HEATED MILITARY
TENTS at freezing Galwan
Valley for INDIAN ARMY.
The tents maintained an inside
temp of +15C at 10 PM, while
min outside temp was -14 C.
They are fully portable and
lightweight, can comfortably
occupy 10 Jawans.
This innovation Replaces tons
of kerosene and reduces
pollution.
 Opportunity identification
process
• Establish a charter
• Generate and sense many opportunities
• Screen opportunities
• Develop promising opportunities
• Select exceptional opportunities
• Reflect on the result and process.
 Techniques for generating
opportunities
• Follow a personal passion
• Compile bug lists
• Pull opportunities from capabilities (resources).
– Valuable, rare, not easy to imitate, non-
substitutable.
• Study customers
• Consider implications of trends
• Imitate but improve.
• Mind your internal sources.
Opportunities Begin the Product Planning
and Product Development Processes
Opportunity Tournament

Exceptional Opportunities

Concept System-Level Detail Testing and Production

Planning
Development Design Design Refinement Ramp-Up
 Pharmaceutical
Drug Development
Hollywood Film Studios
 Opportunity Identification Example

Scotch-Brite is a line of abrasive products

produced by 3M.

The Scotch-Brite was introduced during the

1950s. Development continues into the 21st
century with new products for various cleaning
uses
 1 1 1
mission PD product
statement process launch

3
explored
50 7
opportunities selected
Automobile Concepts
Source: Lunar Design
Product Naming Tournament
The Funnel in Various
Industries
Where do opportunities come from?

Source:
Terwiesch and Ulrich survey of 524 managers in diverse
service and product industries,
 What drives the quality of the opportunities?

 Mean quality of the opportunity identification process.

 Variance in quality of the opportunity identification process.
 Number of “draws” from the opportunity identification process.
 Accuracy of discerning the best subset of opportunities generated.
 Quality of opportunities
• Is there a real market and a real
product?
• Can we win?
• It is worth doing it?
 Project Down selection:
The PD Process Funnel

Concept System-Level Detail Testing and Production

Planning Development Design Design Refinement Ramp-Up
The demand for air purifiers is being generated mostly from the commercial
sector, but the demand from residential sector is also expected to grow
because of the increasing health concerns in the country.

According to TechSci Research report, “India Air Purifiers Market Forecast &
Opportunities, 2020”, market for air purifiers in India is projected to grow at
a CAGR of around 40% during 2015-20.

The leading companies in the Indian air purifiers market are: Eureka
Forbes, Kent RO, OSIM International, Sharp India and Daikin Air
Conditioning.

“India Air Purifiers Market Forecast & Opportunities, 2018” discusses the
following aspects of air purifier market expansion in India:
India Air Purifiers Market Size,
Share & Forecast Technology,
End User, Company &
Regional Analysis Price Point Analysis & Segmental Analysis
Changing Market
Trends & Emerging Opportunities
Competitive Landscape & Strategic Recommendations
• Is the product useful? Does
it enhance some activity or
allow customers to
accomplish an activity that’s
important to them?
• Is the product easy to use
and does it stay consistent
in use throughout the
product’s expected life
cycle?
• Is the product desirable?
Does the item respond to
who the customer is as a
person and complement
how he or she wants to
project themselves to
others?