Product Design and Development Case Study

PRODUCT DESIGN AND DEVELOPMENT

CASE STUDY

BACKGROUND
You are group of ambitious young graduates who are keen to go into business initially
in your home market but with the possibility for expansion into global markets. All
you need is a world beating product idea! And that’s the problem. So far you have
failed to come up with a viable product! Your potential financial backers are losing
patience and have given you until the end of the week to come up with an exciting and
lucrative business proposition. At the end of the week you must deliver a presentation
to you backers of your product idea and business model. You backers will expect a
clear presentation of the market need that you are addressing, how your product solution
works and especially important, what are the costs and expected returns on any
investment in your business. Only the best will get financial backing but remember,
your backers are hard-nosed business people who don’t like having their time wasted
on ill thought out rubbish …!!!

TASK
Each team must establish a real need that can be potentially satisfied by a physical
product. Your product may include software / phone apps etc but must not be
solely an “App”. When you have your product solution you must then determine
the likely start-up costs for your business, the potential market size, the expected
cost of manufacturing your product, its potential selling price relative to any
similar or competing products product cost and hence the break even point and
the expected commercial value. All this must be presented in a PowerPoint
presentation to your backers.

The teams are effectively in competition as it is recognised that only a few proposal
will get backing during these difficult times.

The final presentation, of 10 minutes duration, should emphasise the competitive

advantages of your presentation but should include hidden slides that show how you
used Pugh’s selection matrix and other aspects of the course ‘process’.

TIME SCALE

A number of meetings have been arranged during the week to undertake the study and
prepare the presentation for delivery to your backers. The final presentation will be at
the end of the course. (Usually the last formal session of the module.)

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Suggested agenda for the PDD case study meetings

Case Study 1 Expected Output Search for a Market and a Product idea

Review information & establish your plan for the meetings

Clear identification of Gap in the market i.e. an issue or opportunity that is not
currently filled by an existing product.
Clear Identification of Target Customer – you cannot justifiably design a
commodity. It may be your product becomes a commodity but it must be designed for
a target market even if this target market is quite large.
Mood Board (if time permits) – once you have identified your target market it is time
to create your product personality. The market size, product sector classification and
target market will determine the influence on the product design of either the
‘products’ personality or the customer personality. It may be the product and the
customer personality and one in the same or it may be that the product is just to
appeal to a broader customer personality.
By the end of the first case study you should have created a clear, precisely worded
statement of the need you are addressing and clear description of the types and
expected numbers of potential customers. Working with your primary customer
group you should write a list of customer requirements for the product.

Case Study 2 Expected Output Project proposal, design specification and

target setting and concepts

Working with various idea generation techniques, develop a range of concepts that fulfil
the requirements identified in case study 1. You should aim for at least five different
concepts. You should aim wherever possible to create diagrams showing how the
product functions and styling sketches of what the product will look like to the
customer.

Case Study 3 Product concept selection

 Check whether there are any further design ideas since the last session.
 Use a concept development technique such as ‘Pugh’ reduce the number of
design ideas under consideration.
 Determine whether the first round of ‘Pugh’ has led to any further new or
combination design alternatives.
 Repeat the selection process to identify the final design idea.
 If any time remains move on to the next session’s work!

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Case Study 4 Finalise the design

 Confirm the final product choice, refine and finalise the design.
 Create enhanced diagrams and sketches of the final design.
 Consider design protection approach.
 Check that customer and market needs are satisfied. (Ref.: Design brief)
 Finalise material choice & develop startup and manufacturing costs. (NB
Deciding to ‘Outsource’ manufacture does not allow you to avoid calculating
the expected manufacturing costs as you will still need to know whether your
suppliers per product costs are reasonable!)
 Determine your break even point and the expected commercial value of your
initial product
 Develop a project plan for your new product introduction process.
 Create a business model canvas to show how you plan to make money from
your product

Case Study 5 Project review

 Finalise work not completed in the previous session

 Consider expansion of market penetration and future growth etc.
 Finalise your PowerPoint presentation and email final presentation to the course
tutor

Cost assumptions for the CDM case study

To help provide an equitable basis for the development of the various project proposals,
a basis for costing is provided.

Piece Price/Market Considerations

Home market should be considered the main target. Export markets can also be
considered however, prices should be assumed to be 10% less than achievable in the
home market and transport costs/import duty etc. will cost approximately 10% of the
product cost.

Capital Costs

1. Machines - Use the internet to determine the cost of any machine tools needed for
manufacturing your product in-house. Assume that the machine(s) will be written off
in 5 years on a straight line basis and, for simplicity, an interest rate of 10% on a bank
loan to purchase.
2. Tooling if injection moulding, pressing, forging etc- Assume purchased tooling at a
cost of £5,000 - £35,000, dependent upon the complexity of the tool and the number of
impressions. Costs are per tool. (The simplest single cavity injection moulding tool
would be around £5,000.)

Revenue Costs

1. Tooling refurbishment - Allow for £5,000 per tool, every 1,000,000 shots.
2. Premises (If needed) - Assume £25/square foot/month as a nominal rental cost.

Production Costs

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1. Labour - Assumption is that labour is easily available with minimal recruitment costs.
You should allow a flat rate of £20/hour per person to include all employment costs
such as national insurance and pension contribution.
4. Overheads - Assume 100% on material and labour costs.

Case study final presentations

During your final meeting, you should finalise a powerpoint presentation of 10 minute
duration. (As there is limited time available, it is suggested that presentation materials
should be developed during the ongoing meetings.)
The presentation should include hidden slides (i.e. slides that are not shown during the
live presentation) that document the progress of the team during the week, including
use of Pugh’s selection matrix. These can be based on photographs or scans of group
paperwork and only have to be reasonably neat and legible.

The final presentation should include:-

1. The full names of all group members on the first slide

2. The market need and customer requirements
3. Sketch(es) of the final design plus, if appropriate, a model.
4. Method for design protection.
5. Business case: including Business Model Canvas, Cost/Benefit analysis.
Existing assets or alternative investments? Price / market share / value
proposition, channels to market.
6. Management: Proposed management process to be adopted. Overall NPI project
plan.
7. Tools and techniques to be applied. – Think back to the lessons learnt for
theLean NPI game.
8. Future opportunities. Proposed plan to enhance market share, enter new markets
etc.

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