PRODUCT DESIGN

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1. Explain Characteristics of Successful Product Development

From the perspective of the investors in a for-profit enterprise, successful product development results in products that can be produced and sold profitably, yet profitability is often difficult to assess quickly and directly. Five more specific dimensions, all of which ultimately relate to profit, are commonly used to assess the performance of a product development effort:
• Product quality: How good is the product resulting from the development effort? Does it satisfy customer needs? Is it robust and reliable? Product quality is ultimately reflected in market share and the price that customers are willing to pay.
• Product cost: What is the manufacturing cost of the product? This cost includes spending on capital equipment and tooling as well as the incremental cost of producing each unit of the product. Product cost determines how much profit accrues to the firm for a particular sales volume and a particular sales price. If manufacturing cost is too high, it may not be attractive economically to the consumers. However, it may promise profit to the manufacturer. But, when the product is technically sound and is not essential, and when it does not fulfill any required need and has good substitutes, high price of the product will deter the sales. Thus, marketer must consider the product cost carefully.
• Development time: How quickly did the team complete the product development effort? Development time determines how responsive the firm can be to competitive forces and to technological developments, as well as how quickly the firm receives the economic returns from the team’s efforts.
• Development cost:How much did the firm have to spend to develop the product? Development cost is usually a significant fraction of the investment required to achieve the profits.
• Development capability: Are the team and the firm better able to develop future products as a result of their experience with a product development project? Development capability is an asset the firm can use to develop products more effectively and economically in the future.
High performance along these five dimensions should ultimately lead to economic success; however, other performance criteria are also important. These criteria arise from interests of other stakeholders in the enterprise, including the members of the development team, other employees, and the community in which the product is manufactured.

2. Explain Design and development of products.

Product development is an interdisciplinary activity requiring contributions from nearly all the function of a firm; however, three functions are almost always central to a product project:
• Marketing: the marketing function mediates the interaction between the firm and its customer. Marketing often facilitate the identification of product opportunities, the definition of market segments, and the identification of customer needs. Marketing also typically arranges for communication between the firm and its customer, sets target prices and oversees the launch and promotion of the products.
• Design: the design function plays the role in defining the physical from of the best meet customer needs. In this context, the design function includes engineering design and industrial design.
• Manufacturing: the manufacturing function is primarily responsible for designing, operating, and coordinating the production system in order to produce the product. Broadly defined, the manufacturing function also often includes purchasing, distribution, and installation. This collection of activities is sometimes called the supply chain.
Different individual within these functions often have specific disciplinary training in areas as market research, mechanical engineering, electrical engineering, material science, or manufacturing operations. Several operations are also involved on a part-time basis in the development of a new product. Beyond these broad functional categories, the specific composition of the development team depends on the particular characteristics of the product.