CHAPTER THREE

PRODUCT AND SERVICE DESIGN

3.1 Reasons for Product or Service Development

Organizations become involved in product or service design for a variety of reasons. An obvious
one is:

o To be competitive by offering new products or services.

o To make the business grow and increase profits.
o The best organizations try to develop new products or services as an alternative to
downsizing.

Sometimes product or service design is actually redesign. This is to:

 Economic: (e.g., low demand, excessive warranty claims, the need to reduce costs).
 Social and demographic: (e.g., aging baby boomers, population shifts).
 Political, liability, or legal: (e.g., government changes, safety issues, new regulations).
 Competitive: (e.g., new or changed products or services, new advertising/promotions)
 Cost or availability: (e.g., of raw materials, components, labor).
 Technological: (e.g., in product components, processes)
3.2 Strategies for New Product Introduction

There are three approaches to introducing new products: market pull, technology push and inter-
functional.

a. Market Pull: is where the market is need of a product, so designers make a product to meet
that need.
o The best example of this is cameras; they have evolved over the years to meet the
changing needs of the user. Due to this development in the design in cameras (making
them lightweight, more compact, clearer resolution and so on) the editing software
improved alongside.
o Over recent years they have developed to get even smaller, and have been put into mobile
phones, then as people wants changed (people wanted to be able to take photos of
themselves) the developed to be even smaller and then moved to the front of the phone.

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 o Other examples are; hybrid cars, recyclable carrier bags, low light energy bulbs.
b. Technology push: is a strategy that involves developing and bringing new technologies to
market through research and development (R&D) or production and sales activities.
 It can also refer to public policies that incentivize innovation within firms, organizations,
or governments.
 It is where the technology is available and the designers make a product to use it.
 The best example of this is touch screen technology; this was first developed by the
Royal Radar Establishment. In the 80s Hewlett Packard picked up on this technology and
brought out a touch screen computer.
 Over recent years the technology has become more and more advanced and is now found
in the majority of mobile phones, laptops and computers.
 Other examples; cassettes, products with smaller components.
c. Inter-functional: It can be defined as the cooperation of the various internal business
functions to achieve the overall goals of the firm and insure its responsiveness to
environmental changes.
 This view holds that the product should not only fit the market needs but have a technical
advantage as well. To accomplish this, all functions (e.g., marketing, engineering,
operations, and finance) should cooperate to design the new products needed by the firm.
 Often this is done by forming cross functional teams that are responsible for development
of the new product.
 This is the most appealing(maraki) of the three views but also the most difficult to
implement.
 Cross-functional rivalry and friction must be overcome to achieve the degree of
cooperation required for inter functional product development to succeed.
3.3 The Designing Process
Engineers follow a process to make new products. The process begins with identifying a
problem. Then engineers imagine, plan, create, and evaluate a product that addresses the
problem. Use this guide to develop solutions to problems you identify. Remember that engineers
often revise prototypes many times, so you may carry out parts of the process several times when
developing a solution.

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The designing process includes:
a. Idea development:
 Product idea developed,
 Sources can be customers, competitors or suppliers.
b. Product screening:
 Product idea evaluated, need to consider operations, marketing and financial
requirements.
c. Preliminary design and testing:
 Product prototypes built, tested and refined
d. Final design
 Final product specifications completed
3.4 New Product Development Process
New product development (NPD) is a process of taking a product or service from conception to
market. The process sets out a series of stages that new products typically go through, beginning
with ideation and concept generation, and ending with the product's introduction to the market.
Occasionally, some of the stages overlap or vary depending on the nature of the business.
The NPD process involves eight key stages:
1. Idea generation: brainstorming and coming up with innovative new ideas. I2CSPMCP
2. Idea evaluation: filtering out any ideas not worth taking forward.
3. Concept definition: considering specifications such as technical feasibility, product
design and market potential.
4. Strategic analysis: ensuring your ideas fit into your business' strategic plans and determining
the demand, the costs and the profit margin.
5. Product development and testing: creating a prototype product or pilot service.
6. Market testing: modifying the product or service according to customer, manufacturer and
support organizations’ feedback. This involves deciding the best timing and process for
piloting your new product or service.
7. Commercialization: determining the pricing for your product or service and finalizing
marketing plans.
8. Product launch: a detailed launch plan can help ensure a smooth introduction to market.

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3.5 Value Analysis

Value analysis is a set of techniques, knowledge, and skills used to improve the value of a
product by eliminating unnecessary costs or improving its functions without compromising its
quality, reliability, and performance. It involves understanding the components of a product and
related costs.

Benefits of Value Analysis

As we’ve mentioned before, value analysis is crucial since it identifies possible problems and
suggests improvements that should be made in your company. This process helps:

 Reduce costs;
 Maintain high quality;
 Provide an opportunity to use new technologies;
 Eliminate waste;
 Lower inventory;
 Encourage new ideas;
 Improve brand image;
 Improve design

Techniques of Value Analysis

Value analysis involves many various techniques that simplify the process. We’ve prepared the
main three for you to consider.

 Be specific: Companies often try different methods and then report that none of them works.
You should be specific and not make vague statements to prevent this situation. A careful
manufacturing process requires accurate examination before it starts.

 Obtain data from reliable sources: Different types of data should be received from reliable
sources. You can use a questionnaire to obtain accurate information on costs, methods of
manufacturing, and packing. Prepare accurate and relevant questions on topics you find
relevant.

 Use creativity: If you aim to find the unnecessary costs, you need to develop new ideas. By
doing this, you can eliminate the previous problems and implement some valuable

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 improvements. Besides, it enables you to discover how to simplify the existing component of
a product and reduce costs.

Value Analysis Steps

We can distinguish the five main steps of value analysis. So let’s jump in.

1. Gather information: During this step, the main aim of your team is to understand the
purpose of a project. Team members collect project data and concepts and try to understand
the project scope. They analyze budget, risks, costs, and other issues, visit sites, and study
various project documents.

2. Determine and analyze the function of a project: First of all, your team identifies the
primary and secondary functions of the project. Next, team members should determine value-
mismatched functions to improve them.

3. Generate new ideas for improvement: This step is for team members to create and develop
improvement ideas. They should find alternatives so that the project could perform the same
functions.

4. Evaluate these ideas and develop them: Team members discuss each idea in detail and
identify the costs. They review all the possible risks and choose the most relevant and
suitable ideas. Once ideas that make sense are identified, it’s time to work with them. Your
value engineering team develops the options and passes them back to the project team. These
ideas should be thoroughly explained so that project owners and stakeholders can understand
them.

5. Present improvements: At this stage, the ideas are presented to stakeholders. The best
salesperson is responsible for the presentation.

3.6 Product Design

Product design is the process of developing a usable product that meets customer's needs by
defining the users' problems and finding creative solutions for these problems. Product design is
the process of identifying a market opportunity, clearly defining the problem, developing a
proper solution for that problem and validating the solution with real users.

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A product design process can be defined as a sequence of steps that are followed by a product
team to develop a design solution. It’s a series of design tasks that follow a product from start to
finish. From idea to the final product ready to be commercially available to the target user

Product Design Elements

Formally, product design can be divided into three fundamental components:

 Appearance;
 Functionality;
 Quality

Of course, to create a successful, competitive product, you will need to carefully work out all
these three points: an attractive, modern appearance; a convenient functionality that allows users
to cope with their pain points (or achieve certain goals); maximum availability, high
performance, and security.

Product design process

It’s impossible to provide a universal design process that fits all products, tangible or intangible.
It’s about adapting the process to fit your particular needs and goals with a certain project.
However, it's possible to describe a series of steps that should be present in some way in every
product design process:

Generally, product design and development as iterative process involves the following steps.

1. Generating ideas from both internal and external sources

2. Concept development
3. Conducting market, financial and technical feasibility
4. Developing prototype of the product
5. Test marketing
6. Final design and full scale production

3.7. Service Operations Design

What is a Service?

Service is an intangible product, which is produced and consumed simultaneously. Therefore, a

service never exists, only the results of the service can be observed. If you get a haircut, the

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effect is obvious, but the service itself was produced and consumed at the same time.

Service consists of acts and interactions that are social contacts. The interaction between the
producer and customer at the time of production is a critical attribute of service. There are
professional services such as medicine, law, education and architecture; and capital-intensive
services; such as airlines, electric utilities; mass services such as retailing, wholesale, and fast
food.
Differences between manufacturing and service
o Product are generally tangible service are generally intangible consequently, service design
often focused on intangible factors (e.g peace of mind, ambiance that does product design).
o In many instances service are created and delivered at the same time (eg a haircut, a car
wash). In such instance there is less latitude in finding and correcting errors before the
customer has a chance to discover them. Consequently, training, process design, customer
relations are particularly important.
o Service cannot be inventoried this poses restrictions on flexibility and makes capacity design
very important.
o Services are highly visible to consumers and must be designed with that in mind; this adds an
extra dimension to process design, one that usually is not present in product design.
o Some services have low barriers to entry and exit. This place additional pressure on service
design to be innovative and cost effective.
o Location is often important to service design, with convenience as a major factor. Hence,
design of service and choice of location are often closely linked.
Phases in services design process
 Conceptualization
 Identify service package component
 Determine performance specification and translate in to design specification
 Translate potential design specification to delivery specification
Design guidelines
A number of simple but highly effective rules are often used to guide the development of
service systems. The key rules are the following:

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  Have a single, unifying theme, such as convenience or speed. This will help personnel
to work together rather than at cross-purposes.
 Make sure the system has the capability to handle any expected variability in
service requirements.
 Include design features and checks to ensure that service will be reliable and will provide
consistently high quality.
 Design the system to be user-friendly. This is especially true for self-service systems.
Seven characteristics of well – designed service system
 Each element of the service system is consistent with the operating focus of the firm.
 It is use friendly
 It is robust/healthy
 It is structured consistent performance by its people and system is easily maintained.
 It provides effective links between the back office and the front office so that nothing
falls between the cracks. In football parlance, there should be “no fumbled handoffs.”
 It manages the evidence of service quality in such a way that customers see the value
of the service provided.
 It is cost effective.
Service–product bundle
Most services come bundled with facilitating goods in a service-goods package. For example
when customers go to a restaurant, they receive not only the food but the service, which they
hope is fast, courteous, and pleasant.
The service product bundle consists of three elements:
1. The physical goods (facilitating goods)
 Facilitating Goods: The material consumed by the buyer or items provided by the consumer.
Examples are food items, legal documents, golf clubs, and medical history.
2. The sensual service provided (explicit service)
 Explicit Services: Benefits readily observable by the senses. The essential or intrinsic
features. Examples are quality of meal, attitude of the waiter, on-time departure.
3. The psychological service (implicit service)
 Implicit Services: Psychological benefits or extrinsic features which the consumer may sense
only ambiguously. Examples are privacy of loan office, security of a well-lighted parking lot.

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Differing Service Designs
There is no one model of successful service design. The design selected should support the
company’s service concept and provide the features of the service package that the target
customers want. Different service designs have proved successful in different environments.

In this section we look at three very different service designs that have worked well for the
companies that adopted them.

A. Substitute Technology for People

Substituting technology for people is an approach to service design that was advocated some
years ago by Theodore Levitt. Levitt argued that one way to reduce the uncertainty of service
delivery is to use technology to develop a production-line approach to services.

Substituting technology for people is an approach we have seen over the years in many service
industries. For example, almost all gas stations have reduced the number of cashiers and
attendants with the advent of credit card usage at self-serve pumps. In addition, many hospitals
are using technology to monitor patient heart rate and blood pressure without relying exclusively
on nurses. As technologies develop in different service industries, we will continue to see an
ever-increasing reliance on its use and an increase in the elimination of workers.

B. Get the Customer Involved

A different approach to service design was proposed by C. H. Lovelock and R. F. Young. Their
idea was to take advantage of the customer’s presence during the delivery of the service and have
him or her become an active participant. This is different from traditional service designs where
the customer passively waits for service employees to deliver the service. Lovelock and Young
proposed that since the customers are already there, “get them involved.”

This type of approach has a number of advantages. First, it takes a large burden away from the
service provider. The delivery of the service is made faster and costs are reduced due to lowered
staffing requirements. Second, this approach empowers customers and gives them a greater sense
of control in terms of getting what they want. This approach provides a great deal of customer
convenience and increases satisfaction. However, as different types of customers have different
preferences, many facilities are finding that it is best to offer full-service and self-service options.

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For example, many breakfast bars still allow a request for eggs cooked and served to order, and
most gas stations still offer some full-service pumps.

C. High Customer Attention Approach

A third approach to service design is providing a high level of customer attention. This is in
direct contrast to the first two approaches we discussed. The first approach discussed automates
the service and makes it more like manufacturing. The second approach requires greater
participation and responsibility from the customer. The third approach is different from the first
two in that it does not standardize the service and does not get the customer involved.

Rather, it is based on customizing the service needs unique to each customer and having the
customer is the passive and pampered recipient of the service. This approach relies on
developing a personal relationship with each customer and giving the customer precisely what he
or she wants. Whereas the first two approaches to service design result in lowered service costs,
this third approach is geared toward customers that are prepared to pay a higher amount for the
services they receive. As you can see, different approaches are meant to serve different types of
customers. The design chosen need to support the specific service concept of the company.

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