Product Design

DE ZG541
BITS Pilani Lecture - 4 Samata Mujumdar
Pilani Campus
 BITS Pilani
Pilani Campus

DE ZG541, Product Design

Lecture No. 4
  Product Planning – Last week discussion…
Identifying opportunities
Evaluate and prioritize projects
Allocate resources and Plan timing
Complete Pre-Project Planning
 Identifying Customer Needs
Gather Raw Data from Customers
Interpret Raw Data in terms of Customer Needs
Organise the needs into a Hierarchy
Establish the relative importance of the needs

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What do people want?

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Customer Needs translated…correctly
or wrongly???

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 Process Flow diagram
Market pull,
Technology push,
Platform,
Customer Business Customized,
Opportunities High risk products
requirement Ideas

Concepts Quick build

products

Product
definition

Complex systems

Source: Product Design and Development by Karl T. Ulrich and Steven D. Eppinger

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 Opportunity Identification
 In the context of product development, an opportunity is an
idea for a new product.

 An opportunity is a product description in embryonic form,

a newly sensed need, a newly discovered technology, or a
rough match between a need and a possible solution.
 An opportunity can be thought of as a hypothesis about
how value might be created

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Types of Opportunities
 Because risk of failure increases as opportunities deviate from what
the team already knows well, we can divide the opportunity
landscape into categories based on the uncertainty “horizon” faced
by the team.
 Horizon 1 opportunities are largely improvements,
 extensions, variants, and cost reductions of existing products for
existing markets.
 They are relatively low-risk opportunities.

 Horizon 2 opportunities push out into less known territory in one or

both of the dimensions of the market or the technology.
e.g. Cummins Engines – Automotive/ Naval/ Locomotive/ Power
generation
 Horizon 3 opportunities represent attempts to exploit opportunities
that in some way are new to the world, embodying the highest level
of uncertainty e.g. Smart phones
2/6/2023 / NASA
Product Design ZG541 / BITS
SelfPilani
driving vehicles 8
Opportunity Identification

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Opportunity Identification

The tournament structure of the

opportunity identification process.
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 Opportunity Identification Process
We divide the opportunity identification
process into six steps as follows:
1. Establish a charter.
2. Generate and sense many
opportunities.
3. Screen opportunities.
4. Develop promising opportunities.
5. Select exceptional opportunities.
6. Reflect on the results and the
process.

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Pre- Project Planning

Vision

Mission

Long Term Charter

Goals

Short Term Scope of work

Goals

Projects

Product/process/service development
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 Establish a charter.
 Organizations create new products to
achieve goals such as growing
revenues from existing customers,
filling a hole in a product line, or
entering new market segments. (cost
driven- Maruti Cars)
 Entrepreneurs starting new
organizations also have goals like
creating a new product related to an
area of personal interest.
Create a physical product in
 The innovation charter articulates these the cat toy / power tool
goals and establishes the boundary category that we can launch
conditions for an innovation effort. to the market within about a
 Charters are closely analogous to year through our existing
(although somewhat broader than) the retail sales channel.
mission statement for a new product.
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 Generate and sense many
opportunities.
 About half of innovation
opportunities are generated
internally to an organization and
about half are recognized from
customers and other external
sources
 Typically, the team will want to
identify dozens if not hundreds of
raw opportunities.

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The distribution of sources of
opportunities in innovation

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Techniques for Generating
Opportunities
 Follow a Personal Passion
 Compile Bug Lists
 Pull Opportunities from Capabilities
 Study Customers
 Consider Implications of Trends
 Imitate, but Better
– Media and marketing activities of other firms.
– De-commoditize a commodity.
– Drive an innovation “down market.”
– Import geographically isolated innovations.
 Mine Your Sources
– Lead users
– Representation in social networks.
– Universities and government laboratories.
– Online idea submission.

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 Techniques for Generating
Opportunities
 Follow a Personal Passion
 List your passions—endeavors that keep you
awake with excitement—and then consider how
emerging technologies, trends, and business
models might influence them.
 Identify unmet needs that you have in
connection with a personal interest.
Nutrient delivery system worn during testing
 Compile Bug lists by the inventor, Matt Kressy – for while
 Successful innovators are often chronically bicycling / army / navy personnel

dissatisfied with the world around them.

 They notice unmet needs of users, including
themselves.
 List (or photograph) every annoyance or
frustration you encounter over a period of days
or weeks and then pick the most universal and
vexing ones and dream up solutions.
 Any problem is an opportunity.

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 Techniques for Generating
Artists – already capability is available
Opportunities
Pull Opportunities from Capabilities
 firms achieve above-average profits by
exploiting unique resources.
a resource must be:
 Valuable. To be valuable, a resource must Inj. moulding
either allow a firm to achieve greater
performance than competitors or reduce a
weakness relative to competitors.
 Rare. Given competition, a valuable resource Water jet/ laser jet
must be rare.
 Inimitable. For value and rarity to persist, a
resource must not be easily imitated.
 Non substitutable. Even if valuable, rare, and
inimitable, a resource providing advantage
can’t be easily substituted.
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 Techniques for
Generating Opportunities
Study Customers
• Opportunities can be identified by studying
customers in a selected market segment.
• These studies (also called user
anthropology or consumer ethnography)
The Trek Lime bicycle incorporating the
provide a deeper understanding of the true Shimano Coasting component group
customer needs than you can obtain
through surveys.
Consider Implications of Trends
• Changes in technology, demography, or
social norms often create innovation
opportunities.
• Ubiquitous mobile telephone service, for
example, enables a wide variety of
information delivery services.
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 Techniques for
Generating Opportunities
• Imitate, but Better
– Media and marketing activities of other firms.
– De-commoditize a commodity. – e.g. Madhur sugar / parry
sugar / Gemini / fortune / safola oil / Dawat basmati
• CCD / star Bucks / Barista
– Drive an innovation “down market.” toy market to healthcare
– Import geographically isolated innovations. Redbull energy
drink in Thailand for truck drivers.
• Mine Your Sources
– Lead users.
– Representation in social networks.
– Universities and government laboratories. E.g.Bell labs / semi
conductors / Japanese innovations
– Online idea submission.
• Dell runs a Web site IdeaStorm for soliciting innovation opportunities from
customers.
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 Screen Opportunities
 The goal of screening is simply to eliminate opportunities that are
highly unlikely to result in the creation of value and to focus attention
on the opportunities worthy of further investigation.
 The aim is not to pick the single best opportunity. Given many
opportunities to be screened, the process must be relatively efficient,
even at the expense of perfect accuracy
 For this step, a very effective screening criterion is the holistic
judgment by a group of individuals of whether or not the opportunity is
worthy Two methods are effective approaches to screening: Web-
based surveys and workshops with “multivoting.”
 Both methods rely on the independent judgments of a group of people.
 You can also use an in-person workshop to evaluate opportunities.
In a format we have used frequently, each participant presents one or
more opportunities to the group.

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 Develop Promising Opportunities
 Rarely does it make sense to bet on a single opportunity.
 Too much uncertainty clouds the prospects for success.
 After screening opportunities, the team should invest modest levels of
resources in developing a few of them.
 At a minimum, an opportunity passing the initial screen warrants an
Internet search for existing solutions and an informal discussion with a
few potential customers.
 In developing promising opportunities, the goal is to resolve the greatest
uncertainty surrounding each one at the lowest cost in time and money.
 One way to structure this step is to list the major uncertainties regarding
the success of each opportunity, the tasks you could take to resolve the
uncertainties, and the approximate cost of each task.

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Select Exceptional Opportunities
 Once a handful of opportunities have been
developed with modest investment of resources,
enough uncertainty should be resolved in order to
pick the exceptional few opportunities that warrant
a significant investment in product development.

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 Select Exceptional Opportunities
 Real-Win-Worth-it, summarizes the three questions an organization
should attempt to answer when screening opportunities:
 Is the opportunity real? Is there a real market that you can serve with
the product?
 Criteria here include market size, potential pricing, availability of
technology, and the likelihood the product can be delivered in the
required volume at the required cost.
 Can you win with this opportunity? Can you establish a sustainable
competitive advantage?
 Can you patent or brand the idea? Are you more capable of
executing it than competitors? For example, do you have superior
engineering talent in this field?
 Is the opportunity worth it financially? Do you have the resources
needed (financial and developmental) and are you confident that the
investment will be rewarded with appropriate returns?
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 Reflect on the Results and the Process
 However, market success is not the only success
criterion for the process.
 Some questions to consider in reflecting on the
opportunity identification results and process are:
 How many of the opportunities identified came from
internal sources versus external sources?
 Did we consider dozens or hundreds of
opportunities?
 Was the innovation charter too narrowly focused?
 Were our filtering criteria biased, or largely based on
the best possible estimates of eventual product
success?
 Are the resulting opportunities exciting to the team?

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 The Product Planning Process
 The product plan identifies the portfolio of products to be developed by
the organization and the timing of their introduction to the market.

 This plan divides projects into four categories: new platforms,

derivatives of existing platforms, product improvements, and
fundamentally new products.

 Product plans are developed with the company’s goals, capabilities,

constraints, and competitive environment in mind.

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 Four Types of Product Development
Projects
Product development projects can be classified as four types:

 New product platforms: This type of project involves a major

development effort to create a new family of products based on a new,
common platform. The new product family would address familiar markets
and product categories.
 Derivatives of existing product platforms: These projects extend an
existing product platform to better address familiar markets with one or
more new products.
 Incremental improvements to existing products: These projects may
only involve adding or modifying some features of existing products in
order to keep the product line current and competitive.
 Fundamentally new products: These projects involve radically different
product or production technologies and may help to address new and
unfamiliar markets. Such projects inherently involve more risk; however,
the long-term success of the enterprise may depend on what is learned
through these important projects.
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The Product Planning Process

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Balancing Portfolio

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Balancing Portfolio

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 Case Study - Renault Duster
 This case study looks at
what contributed to the car's
success.

Renault Duster

Source: https://www.businesstoday.in/magazine/case-study
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 Case Study - Renault Duster
 When French automotive giant
Renault first entered India through
a joint venture with Mahindra &
Mahindra, it placed high hopes on
its maiden product offering Logan -
a mid-sized sedan launched in
2007.
 But the car with its dated looks and
high pricing failed to strike a chord
with Indian consumers.
 Such was the scale of the failure
that it ended up killing the joint
venture in 2010.

Source: https://www.businesstoday.in/magazine/case-study
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 Case Study - Renault Duster
 Renault desperately needed a "volume driver" to shore up its
operations.
 It identified a gap in the SUV segment.
 "There were SUVs costing Rs 20 lakh and above
manufactured by global players and those priced from Rs 6
lakh to Rs 10 lakh produced by Indian companies.
 The company launched the Duster priced between Rs 8 lakh
and Rs 12 lakh in July 2012.
 The Duster's success was such that Renault had to triple
production within months of its launch from seven per hour to
20 per hour.

Source: https://www.businesstoday.in/magazine/case-study
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 Case Study - Renault Duster
 How did a predominantly European car win the hearts and minds
of difficult Indian customers?
 The company went back to the drawing board to understand the Indian
customer.
 It identified a focus group of about 200 people whose profile matched
the potential buyer of the Duster.
 It then short-listed 30 families from this focus group across five Indian
cities for an ethnographic study spread over two months.
 During this period members of the product development team lived
with their target customers to observe them, understand their lives and
needs.
 They also spent time with the customers to know what they liked and
did not like about their vehicles.
Source: https://www.businesstoday.in/magazine/case-study
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 Case Study – Indian Customer?
 The study threw up 41 modifications that the European Duster needed.
(Guerin says the exercise enabled the company to understand what a car
should have to meet an Indian customer's needs).
 "We understood that a critical purchasing factor of a car in India is the
exterior design,"
 "People loved an SUV with rugged looks that stood out in a crowd, but at
the same time wanted it to operationally perform like a sedan - easy to
drive and offering good fuel efficiency.“
 The study revealed that Indian consumers liked a strong dose of chrome
on their cars, especially the exterior.
 They liked body-coloured bumpers.
 Inside the car they preferred a dual-tone interior, and wanted the switches
for power windows on the door rather than in the central console.
 Indians preferred inclined seats for greater comfort.
 Rear air-conditioning was critical and so was the armrest, a mobile
charger and a reading light. Some storage space was also welcomed.
Source: https://www.businesstoday.in/magazine/case-study
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 Case Study
 The European Duster did not have these attributes.
 Renault made several changes in the car to suit
Indian conditions.
 These included reinforcing the suspension to tackle
rough Indian roads and offering a higher ground
clearance.
 It added more brackets to the car's doors as they
tended to be used roughly.
 The engine was tuned to meet the quality of the
fuel in India and deliver high efficiency of at least
20 km per litre.
 The tuning of the engine was done in Paris; the
company shipped diesel from India to get the
tuning right.
Source: https://www.businesstoday.in/magazine/case-study
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 Customer clinic
 In early 2011 the company conducted a customer clinic in
New Delhi to validate its learning.
 It put the prototype of the European Duster, after the
necessary changes, alongside rival cars in a price range of
Rs 7 lakh to Rs 12 lakh, and asked a few potential
customers and car experts for their views.
 All of them had to also sign a confidentiality agreement
with Renault.
 "What we got was a 'wow'," recalls Guerin.
 "The feedback we got showed us that we were on the right
track."

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 ?
Can you tell about me ? Strength/ Weakness/ Opportunity/
Threats….

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 Concept development process

Development
Plan

Identify Establish Generate Select Test Set Plan

Customer Target Product Product Product Final Downstream
Needs Specifications Concepts Concepts Concepts Specifications Development
Mission
Statement
Opportunities Perform Economic Analysis

Benchmark Competitive Products

Build and Test Models and Prototypes

Source: Product Design and Development by Karl T. Ulrich and Steven D. Eppinger

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 Identifying customer needs
• The five steps are:
 Gather raw data from customers.
 Interpret the raw data in terms of customer needs.
 Organize the needs into a hierarchy of primary, secondary, and (if
necessary) tertiary needs.
 Establish the relative importance of the needs.
 Reflect on the results and the process.

Manual Vs Powers tools

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Goals

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 Gather Raw Data from Customers
1. Interviews: One or more development team members
discusses needs with a single customer. Interviews are usually
conducted in the customer’s environment and typically last one to
two hours.
2. Focus groups: A moderator facilitates a two-hour discussion
with a group of 8 to 12 customers. Focus groups are typically
conducted in a special room equipped with a two-way mirror
allowing several members of the development team to observe the
group.
3. Observing the product in use: Watching customers use an
existing product or perform a task for which a new product is
intended can reveal important details about customer needs.
• For example, a customer painting a house may use a
screwdriver to open paint cans in addition to driving screws.

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 The Art of Eliciting Customer Needs
Data
 When and why do you use this type of product?
 Walk us through a typical session using the product.
 What do you like about the existing products?
 What do you dislike about the existing products?
 What issues do you consider when purchasing the
product?

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Documenting Interactions with
Customers
 Audio recording
 Notes
 Video recording
 Still photography

• The final result of the data-gathering phase of

the process is a set of raw data, usually in the
• form of customer statements but frequently
supplemented by video recordings or
photographs.
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Step 2: Interpret Raw Data in Terms of
Customer Needs

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 Step 3: Organize the Needs into a
Hierarchy
 The result of steps 1 and 2 should be a list of 50 to 300
need statements.
 Such a large number of detailed needs is awkward to work
with and difficult to summarize for use in subsequent
development activities.
 The goal of step 3 is to organize these needs into a
hierarchical list.
 The list will typically consist of a set of primary needs, each
one of which will be further characterized by a set of
secondary needs.
 In cases of very complex products, the secondary needs
may be broken down into tertiary needs as well.

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Step 4: Establish the Relative
Importance of the Needs
• the development team will have to make
trade-offs and allocate resources in
designing the product.
• A sense of the relative importance of the
various needs is essential to making these
trade-offs correctly

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 Step 5: Reflect on the Results and the
Process
 Have we interacted with all of the important types of
customers in our target market?
 Are we able to see beyond needs related only to existing
products in order to capture the latent needs of our target
customers?
 Are there areas of inquiry we should pursue in follow-up
interviews or surveys?
 Which of the customers we spoke to would be good
participants in our ongoing development efforts?

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Translate to need statements

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Translate to need statements
“See how the leather on the bottom of the bag is all scratched; it’s
ugly.”
“When I’m standing in line at the cashier trying to find my
checkbook while balancing my bag on my knee, I feel like a stork.”
“This bag is my life; if I lose it I’m in big trouble.”
“There’s nothing worse than a banana that’s been squished by the
edge of a textbook.”
“I never use both straps on my knapsack; I just sling it over one
shoulder.”

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 Product Plan
To develop a product plan and project mission statements,
we suggest a five-step process:

 Identify opportunities.
 Evaluate and prioritize projects.
 Allocate resources and plan timing.
 Complete pre-project planning.
 Reflect on the results and the process.

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 Step 1: Identify Opportunities
 The planning process begins with the identification of
product development opportunities.
 This step can be thought of as the opportunity funnel
because it brings together inputs from across the
enterprise.

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 Step 2: Evaluate and Prioritize Projects
 If managed actively, the opportunity
funnel can collect hundreds or even
thousands of opportunities during a
year.
 Some of these opportunities do not
make sense in the context of the firm’s
other activities, and in most cases, there
are simply too many opportunities for
the firm to pursue at once.
 The second step in the product planning
process is therefore to select the most
promising projects to pursue.

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 Competitive Strategy
An organization’s competitive strategy defines a basic approach to markets and products with respect to
competitors. The choice of which opportunities to pursue can be guided by this strategy.
Most firms devote much discussion at senior management levels to their strategic competencies and the
ways in which they aim to compete. Several strategies are possible, such as:

 Technology leadership: To implement this strategy, the firm places great emphasis on basic
research and development of new technologies and on the deployment of these technologies through
product development.
 Cost leadership: This strategy requires the firm to compete on production efficiency, either through
economies of scale, use of superior manufacturing methods, low-cost labor, or better management of
the production system. Design for manufacturing methods are therefore emphasized in the product
(and process) development activities under this strategy.
 Customer focus: To follow this strategy, the firm works closely with new and existing customers to
assess their changing needs and preferences. Carefully designed product platforms facilitate the
rapid development of derivative products with new features or functions of interest to customers. This
strategy may result in a broad product line featuring high product variety in order to address the needs
of heterogeneous customer segments.
 Imitative: This strategy involves closely following trends in the market, allowing competitors to
explore which new products are successful for each segment. When viable opportunities have been
identified, the firm quickly launches new products to imitate the successful competitors. A fast
development process is essential to effectively implement this strategy.

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