Which of the following is not a factor of successful product and service design

Organization success is dependent on customer satisfaction and delight. Customer satisfaction is achieved through development of product and service, which have all attributes required by the customer. A success product or services do not only have attractive package design but should be also able to provide robust performance.

Thus, product design must be practical enough for production and powerful enough to provide a competitive advantage.

Product Design

A good product design has following common features:

• Utility: The product design should make product utility as per expectation of customers and provide steady performance through the product life.
• Aesthetics: Product aesthetics is important in success of the product. The product aesthetics is dependent on market and end customer.
• Producible: Product design should enable effective production of product through available production methods.
• Profitability: Product design should make economic sense as to deliver value to customer and sustainability to the organization.
• Differentiable: A good product design should enable product to be differentiate among its competition. This can be achieved by attractive packaging and also by providing additional service on the product.

Objectives of Product Design

The essence of product design is to satisfy customer and maximizes the value for the customer at minimum cost. The product or service should also be able to meet primary needs and desire of the customer. This may not require development of new product, but enhancement to existing product or service.

Stages of Product Design

Product design is a creative process which looks at all the available options and beyond. The process is can be divided into three stages:

1. First stage: His stage involves brainstorming, bringing ideas and analysis of customer and market feedback.
2. Second Stage: Idea is converted into a feasible solution to satisfy the customer expectation, using available resource and technology.
3. Third Stage: This is the last stage in which the product is introduced in the market.

Factors Affecting Product Design

A successful product design is combination factors as follows:

Correct Team Selection: This is very essential to get the correct team in place which has expert designers who are not only aware and comfortable with technology but also understanding of customer expectation.

Customer Involvement: Involvement of customer in product design and testing can provide insight into the direction of the project

Prototyping and testing: Product design is high risk concept as it involves commitment of capital and man-power; therefore, it is imperative that extensive prototyping and testing are done with customer and market.

Raw Material: It is essential that raw material to be used in the production meets the quality standards of the end product. Furthermore, procurement system needs to be in place to ensure continuous, cost effective supply.

Production method and process layout: Feasibility of production method and process layout determines future success of the product.

External Factors: Environmental and government regulations plays an important part in product design. And these norms are updated from time to time, so product design should have the flexibility to adapt.

Product Selection

Production selection process is done through a combination of financial analysis, risk analysis, existing product portfolio, raw material supply and pre-determined product criteria.

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New products and services are the lifeblood of all businesses. Investing in their development isn't an optional extra - it is crucial to business growth and profitability.

But embarking on the development process is risky. It needs considerable planning and organisation.

This guide will outline the key stages in the lifecycle of products and services so you know when the time is right for your business to start the development process.

It will explain how a planned and phased development process will help you make the wisest investment and budgeting decisions. It will also advise you on how best to create a development team and manage a project.

The lifecycle of products and services

There are five key stages in the lifecycle of any product or service.

Development - at this point your product or service is only an idea. You're investing heavily in research and development.

Introduction - you launch your product or service. You're spending heavily on marketing.

Growth - your product or service is establishing itself. You have few competitors, sales are growing and profit margins are good. Now's the time to work out how you can reduce the costs of delivering the new product.

Maturity - sales growth is slowing or has even stopped. You've been able to reduce production and marketing costs, but increased competition has driven down prices. Now is likely to be the best time to invest in a new product.

Decline - new and improved products or services are on the market and competition is high. Sales fall and profit margins decline. Increased marketing will have little impact on sales and won't be cost-effective unless new markets are identified.

Manage the lifecycle

Identifying where products or services are in their lifecycle is central to your profitability. Effective research into your markets and competitors will help you do this. See our guide on how to understand your competitors.

You can extend the lifecycle of a product or service by investing in an "extension strategy". You could:

• increase your promotional spending
• introduce minor innovations - perhaps by adding extra features or updating the design
• seek new markets

But ultimately this only delays a product or service's decline.

Ideally, you should always have new products or services to introduce as others decline so that at least one part of your range is showing a sales peak.

Developing your ideas

There's a lot at stake when developing a new product or service. To minimise risks and allocate investment and resources wisely, you should consider a number of factors:

• Will your new product or service meet customers' specifications? For example, consider its design, ease of use and performance benefits.
• How technologically feasible is the product or service? Can you meet the design, resource and manufacturing requirements?
• Are you clear about what you hope to achieve with the new product or service? Does it meet the strategy outlined in your business plan and play to your business' strengths?

The clearer you are about your plans, the better you can analyse the risks involved.

The following tips may also be helpful:

• consult members of your team about your development plans - they may contribute insights that you've overlooked
• seek the views of suppliers and other business associates - their specialist expertise could be invaluable
• test lots of ideas at the start of a project - it costs relatively little to assess which are most promising, but make sure you stop work on ideas that don't meet your criteria before committing a lot of time and resources
• ask your best customers what they think of your plans
• consider the regulatory framework within which your new product or service will operate
• don't overlook the environmental impact of your plans
• look beyond a new product or service's immediate potential and consider the longer term

Match products and services to market needs

New products and services have to offer benefits that meet your customers' needs. You need to discover what these are.

Market research, using techniques such as surveys and focus groups, will help you do this.

Remember that although the end user of your product or service might be your most important customer, you may have to take the needs of other parties into account.

For example, if you were planning a new DIY product, you would need to consider how retailers would stock it as well as how it would benefit professional decorators. If you're creating a toy, you should consider what parents as well as children will think of it.

Your competition

Not only must you meet your customers' needs, you have to do so in a way that is better than the alternatives offered by the competition.

Your new product or service needs a unique selling proposition - a feature or property that makes it stand out in the marketplace. Before entering the market you need to determine:

• how customers needs are currently met
• why customers would choose your product or service rather than the competition's, both now and in the future
• what risks you are prepared to take to launch your product or service into this market

To find out more, see our guide on how to understand your competitors.

Pricing your proposed service or product

Establishing a pricing strategy for a new product or service is an important part of the development process. You should consider pricing the moment you decide to take an idea forward as it will determine how much you can afford to invest in the project.

You will need to take the following factors into account:

• The benefits - or value - to the customer of your product or service compared with what the competition has to offer. Will the price be one that customers are prepared to pay?
• Whether or not you're first to market. Is your product or service revolutionary or are you following a market trend?
• The selling channels you want to use, which will affect your promotional spending and distribution costs.
• The speed with which you want to establish your product or service.
• The expected lifecycle of your product or service.
• Whether you are covering your costs.

Strategic pricing can be used to drive sales and regulate demand. See our guide on how to price your product or service.

The project development process

An effective development process for products or services should be divided into a number of key stages:

• Idea generation - to capture new ideas.
• Idea distillation - to screen out those ideas not worth taking forward.
• Concept definition - to consider specifications such as technical feasibility and market potential. If you're planning a new product, you should consider the design process now.
• Strategic analysis - to ensure your ideas fit into your business' strategic plans.
• Concept development - to create a prototype product or pilot service.
• Test marketing and finalising the concept - to ensure your product or service can be modified according to customer, manufacturer and support organisations' feedback. This means deciding the best timing and process for piloting your new product or service.
• Product launch - the trickiest stage. Before setting a date you must determine how to sell, promote and support your product or service. Getting it right first time is essential. But any decisions to delay your launch should be balanced against the danger that your competitors will beat you to market.

In practice some of these stages may overlap, but the presence of a staged process will help keep timing and costs under control.

Creating a project team

Every potential new product or service requires a dedicated development team.

In creating your team you need to include people with a variety of skills. For example, as well as a creative ideas person you may also need a technical expert, a marketing specialist, someone who can source components and someone who understands the supply-chain difficulties you could encounter.

All team members should understand your business' objectives and be committed to them.

There are many forms of effective team working and the right one for you will depend on your business' needs. For example, team members might:

• work as a unit dedicated to one project, reporting to a project manager
• work exclusively on one project but remain in separate departments reporting to department heads who are under the project manager
• work on several projects at once with both a department head and project manager to monitor progress

Teams need someone in a project management role to lead, co-ordinate and motivate the team. See the page in this guide on how to manage a development project.

Investment and cost control

Developing new products and services is an inherently risky process. You must plan any investment carefully and strictly control your costs.

You need to:

• factor any future investment in products and services into your strategic business plan
• plan exactly where this investment will be directed
• justify the expenditure on every project
• manage your costs

Before making investment decisions, consider how much your business stands to gain from a completed product or service. Weigh this against the risks you face.

Phasing new product development

One way to minimise your risks is to phase investments in projects. By reviewing a project at the end of each phase or stage of development, you can identify products or services that are unlikely to be successful before resources are wasted. If the product or service fails to meet established criteria, the project is ditched. If it meets them, resources sufficient to enable it to reach a next, predetermined, stage are allocated.

Finding support

A range of government grants and tax breaks is available for research and new product development.

Cost control

It's essential to keep a close eye on costs when you develop new products and services to avoid them spiralling out of control. You should:

• estimate development costs in advance, as described below
• monitor expenditure throughout the development process
• introduce phased investment, as described above

There are two main ways to estimate costs:

• a top-down approach where you consider previous comparable projects and use them as a benchmark
• a bottom-up approach where all team members agree on the costs they expect to incur with one project manager, who will then estimate the total cost

Remember that your costs could include staffing, materials, technology, product design, market research, prototyping and incremental overhead costs.

Manage a development project

Project managers are essential to ensure the successful development of new products or services. They'll be responsible for:

• controlling costs and allocating resources - for further information, see the page in this guide on investment and cost control
• drawing up the key parameters for the product or service's specification
• co-ordinating the product development team - for further information, see the page in this guide on creating a project team
• timetabling the development process
• troubleshooting

Timetabling the development process

Your project manager should draw up a critical path for the completion of key tasks. SMART (specific, measurable, agreed, realistic and time-limited) objectives can help to control and co-ordinate the development team's advance along this path and stages can be used to monitor progress.

However, flexibility must be built into your plans. Any number of unknowns can come into play and result in, for example, a change in the project's specifications or expected completion date.

Original document, Develop new products and services, © Crown copyright 2009
Source: Business Link UK (now GOV.UK/Business)
Adapted for Québec by Info entrepreneurs

Our information is provided free of charge and is intended to be helpful to a large range of UK-based (gov.uk/business) and Québec-based (infoentrepreneurs.org) businesses. Because of its general nature the information cannot be taken as comprehensive and should never be used as a substitute for legal or professional advice. We cannot guarantee that the information applies to the individual circumstances of your business. Despite our best efforts it is possible that some information may be out of date.

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