UNIT 6

New Product Design and

Development
Mohamed Dahlan Ibrahim, Ph.D
 Product Design and Product
Development
Product design is the conceptual
translation of a new product idea or
concept. It includes design of the product
and its architecture (physical design),
artistic design (aesthetics) as well as the
required parameters to satisfy the market
needs
Product development is the process by
which technopreneurs creates the product
or service that will be sold to customers

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 Product Design and Product
Development
New product development process for
technology ventures usually begins with
research and development to product
design to concept testing to building
prototypes and test marketing (before
full-scale commercialization)

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Product Development Process
1. RESEARCH AND DEVELOPMENT

2. PRODUCT DESIGN

3. CONCEPT TESTING

4. BUILD PROTOTYPE

5. TEST MARKETING

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 Product Design Process
ESTABLISH PRODUCT
GOALS AND ATTRIBUTES

IDENTIFY COMPONENTS IDENTIFY PHYSICAL AND

AND PARAMETERS SOCIAL CONSTRAINTS

SET PERFORMANCE
SPECIFICATIONS

ESTABLISH PRODUCT
CONFIGURATION

SELECT COMPONENTS OF
THE PRODUCT

OPTIMIZE PARAMETERS OF
THE PRODUCT

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 Usability of Products
Usability is a measure of a users
experience when interacting with a
product
Five factors determining usability:
Ease of learning
Efficiency of use
Memorability
Error frequency and severity
satisfaction

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 The Importance of New
Product Development
Survival
Technological products becomes more
complex
Technological product life-cycle is
getting shorter
Competition has become more intense
Threat of losing market share

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 The Importance of New
Product Development
Strategy for growth
The Ansoff matrix
Two key variables that ensure business
to grow:
Introducing new products to existing
markets
Introducing new products to new markets

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 The Ansoff Matrix
Current Products New Products

1. Market 3. Product
Current Markets Penetration Development
Strategy Strategy

2. Market 4. Diversification
New Markets Development Strategy
Strategy

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Risk Management in New Product
Development
Why research and
analysis before new
product development
New product have a very high failure rates.
Products fail, not because of technical
shortcomings, but due to absence of
market.
Over 60% of new product fail before entering
the market, and out of the remaining 40% that
do see the ray of light, 40% fail to yield profit
and are withdrawn from the market.
Timely and reliable knowledge about
customer preferences is most important.
Such data is obtained from business
research.
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New product development is linked with very
limited historical or preliminary data.
Hence, risky
Risk can be in form of market, technical, or
organizational issues. Risk analysis solves
the problem through flexible modeling,
primary and secondary research.
A good strategy is a must for evaluating
and dealing with the associated and
unavoidable risks.
Research conducted to understand
customer needs and develop a new product
is different from research required to launch
a new product.
Product development research is focused on
needs of customers while launch
research focuses on understanding the
motivation and attitudes of early adopters.
Successful targeting of early adopters
builds the fountain for new product success.
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 New Product and New
Product Development
A new product is any product perceived to
be new in the mind of the consumers
New product development (NPD) is a
process by which entrepreneur creates
the newness of the product physically
for the purpose of selling it to the
customers

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 A Product is Multi-
Dimensional

Packaging Price

Brand name
Quality PRODUCT
Specifications

Features Technology

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 A Product is Multi-
Dimensional
Any changes or modifications in any
of the product dimensions (new or
existing product lines) , in theory
could be considered as a new
product

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 Different Examples of
Newness
Changing the performance capabilities of
the product (e.g. a new, improved washing
detergent)
Changing the application advice for the
product (e.g. the use of liquid instead of
powder detergent)
Changing the after-sales service for the
product (e.g. frequency of service for a
motor car)

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 Different Examples of
Newness
Changing the promoted image of the
product (e.g. the use of bio-degradable
packaging material)
Changing the availability of the product
(e.g. the use of vending machines)
Changing the price of the product (e.g.
increasing or lowering the price affects
demand for the products)

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 Classifications of new
products

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 Classifications of new
products
New-to-the world products
The first of its kind (new inventions)
Create new market
New product lines (new to the firm)
New to the company but not new to the marketplace
Addition to existing lines
Subsets to the new product lines
Perhaps targeted to different market segments

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 Classifications of new
products
Improvements and revisions to existing products
New products to replace existing products with cosmetic
and functional enhancements
Cost reductions
Offer no new benefits to the consumer other than
possibly reduced price
Provides enormous added-value to the firm (financial
rewards too)
Repositioning
New applications to existing products
More to do with consumer perception rather than
technical development

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 Types of New Products
Management Consumer
Perspective Reposition Perspecti
7%
New Product ve
Lines
20%

Improvements
to Existing
Products
26% Cost Reduction
Criteria Cost Reduction
Criteria:
11%
11%

:
Newness
Newness to
to the New to the World
Additions to customer
10%
company Existing Lines /humanity
26%

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 Cash flows and NPD

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 New Product Strategies

Product proliferation
Value
Design (outward appearance)
Innovation
Service

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Product Performance Criteria

Performance in operation Safety in use

Reliability Ease of maintenance
Sale price Parts availability and cost
Efficient delivery Attractive
Technical sophistication appearance/shape
Quality of after-sales- Flexibility and adaptability
service in use
Durability Advertising and promotion
Ease of use Operator comfort
Design

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 Models of NPD

Linear NPD model

Departmental-stage models
Activity-stage models and concurrent engineering
Cross-functional models (teams)
Decision-stage models
Conversion-process models
Response models
Network models

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Linear Model
NPD

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Department-Stage Model

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 Misperceptions with
Departmental-Stage Model

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An Activity-Stage Model

Many NPD activities occur at the same time but

with different intensity

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A Network Model of NPD

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 Concept Testing
Further testing of the accepted opportunity need
to be carried out a process known as concept
testing
Concept testing is the process of using
quantitative methods and qualitative methods to
evaluate consumer response to a product idea
prior to the introduction of a product to the
market

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 Concept Testing
It is also known in literature as fuzzy front end,
front end innovation, Stage 0, Phase 0 or Pre-
project activities
This include testing the product or process
concept with potential customers and investors
If strong acceptance is found, the next step will
be the preparation of the technological blueprint

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 Concept Testing
Several reasons:
Go/no-go decisions
What market to be in?
Selecting among alternative concepts
Confirming concept selection decision
Benchmarking
Soliciting improvement ideas
Forecasting demand potential
Ready to launch?

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 Concept Testing-The
Process
Define the purpose of the test
Choose a survey population
Choose a survey format
Communicate the concept
Measure customer response
Interpret the results
Reflect on the results and the process

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 Example: emPower
Electric Scooter

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 Scooter Example
Purpose of concept test:
What market to be in?
Sample population
College students who live 2-5 km
from campus
Commercial transportation
Survey format:
Face-to face interview
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 Communicating the
Concept
Verbal description Physical
Sketch appearance model
Rendering 3D solid CAD model
Appearance model
Storyboard
Prototype
Video
Working
Simulation beta
Interactive
multimedia

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 Verbal Description
The product is a lightweight electric
scooter that can be easily folded and
taken with you inside a building or on
a public transportation
The scooter weighs about 15 kilos. It
travels at speed of up to 20 km/hr
and can go about 20 km on a single
charge

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 Verbal Description
The scooter can be recharged in
about 2 hours from a standard
electric outlet.
The scooter is easy to ride and has a
simple controls just an accelerator
and a brake

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Sketch

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 Rendering

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 Storyboard

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Physical 3D Solid CAD
Model

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 Appearance Model

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 Working Prototype

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 Beta Prototype

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 Measure Customer
Response
Survey content:
Part 1: Qualification
Part 2: Product Description
Part 3: Purchase Intent
Part 4: Comments

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 Measure Customer
Response
Part 1: Qualification
How far do you live from campus?
If not within the specified radius, thank the
respondent and end interview
How do you currently get to campus
from home?
How do you currently get around
campus?

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 Measure Customer
Response
Part 2: Product Description
Present the concept description as in
the previous verbal description
Get comments from respondents

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 Measure Customer
Response
Part 3: Purchase Intent
If the product were priced according to your
expectations, how likely would you be to purchase the
scooter within the next year?

I would I would I might or I would I would

definitely not probably not might not probably definitely
purchase the purchase purchase purchase purchase
scooter the scooter the scooter the scooter the scooter

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 Measure Customer
Response
Part 4: Comments
What would you expect the price of the
scooter to be?
What concerns do you have about the
product concept?
Can you make any suggestions for
improving the product concept?

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Interpreting the Results
From the data set gathered during
the interview, forecast the potential
of the product for commercialization.
Make estimate in terms of:
Size of the market
Selling price
Sales forecast

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Interpreting the Results
Sources of forecast error?
Word-of-mouth effects
Quality of concept description
Pricing
Level of promotion
Competition

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