Whether it is the compatibility of computers or a light bulb for homes, product ideas are sometimes self-evident. Success in innovation often hinges on the design, development and the execution. In the case of IBM 360 it was the gargantuan task of re-engineering the architecture of computer systems that led to the establishment of new standards in computing.
In new product development (NPD), once the ideas and concepts have been generated and screened, it is time for R&D to design and craft the new products. They do so by combining art, science, and technology to transform the concepts into new products.
This chapter imparts an understanding of the product design techniques and the processes, including sensory research, the Kano model, conjoint analysis and the house of quality. You will learn how ideas are turned into reality, from concepts to products.
To begin, consumer requirements need to be translated into engineering and manufacturing parameters that are measurable and controllable. This usually results in some tension between marketing and R&D. Marketers spell out what consumers want, but, to create the new product, what engineers require are technical specifications. A set of methods called quality function deployment (QFD) helps to translate the marketer’s description of consumer needs into the engineer’s language of technical specifications.
The house of quality is a prominent QFD technique that brings together in a “house” configuration the attributes that consumers need and the engineering characteristics that will influence those attributes. Utilizing an inter-relationship matrix to relate the consumer attributes to the engineering characteristics, the technique is able to translate a product concept into the technical specifications for a prototype. It also improves cross-department communication by serving as “a kind of conceptual map that provides the means for inter-functional planning and communication” (Hauser and Clausing, 1988).
A key issue in product design is the trade-off between quality and cost: Are consumers willing to pay for the optimum combination of features that gratify their needs? Are they prepared to pay the additional cost for an improvement in performance?
Designers are also confronted with the challenge of negatively correlated characteristics. For instance, taste versus low calories, taste versus nutrition, power versus safety, ubiquitous versus exclusive, quality versus price and so on. Sometimes a creative solution can satisfy multiple needs. Most of the time, however, a trade-off is called for. To make an informed decision, the designer needs to know the combination of price and features that target consumers finds most desirable.
Conjoint analysis, a technique developed by Paul Green at the Wharton School, answers these questions. It is a predictive technique used to determine customers’ preferences for the different features, including price, that make up a product or service.
Conjoint analysis works well for consumer durables and has also been used for FMCG products. Yet sometimes it may become challenging to convey tastes, as in food products, or fragrances, in a conjoint analysis. Sensory research and consumer product testing offer an alternative methodology where preference ratings by consumers are modelled to determine the importance of each attribute.
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In an analytics-driven business environment, this analytics-centred consumer marketing workshop is tailored to the needs of consumer analysts, marketing researchers, brand managers, category managers and seasoned marketing and retailing professionals.
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