Bussines Management
Lilyb660
9.pptxBlock 1
Session 11: Product and service design
Block 1- Reading 14
Product and service design
The importance of new product development (NPD)
Without any new development, products and services can become obsolete, increasing the likelihood that customers may switch to competitor’s products.
The brand itself can be damaged by allowing a product to remain unchanged.
NPD helps organizations to:
Maintain a gap between themselves and their competitors.
Avoid competition based on price, keeping profit margins higher
Develop pipeline of new products to maintain a healthy product portfolio
Reading 14: Product and service design
The importance of new product development (NPD)
New product development can be categorised in three ways:
Incremental enhancement of existing products
Existing products can be given some form of minor modification to enhance some aspect of their performance. This could be a redesign to reduce its weight, reduce its unit cost or improve its reliability.
The actual product concept – the way in which the product meets customer needs – does not change. Incremental enhancement can use disruptive innovation.
Reading 14: Product and service design
Reading 14: Product and service design
The importance of new product development (NPD)
New generation products – Sometimes a company will develop a completely new product or completely redesign an existing product based on new technologies.
For example, audio technology for music recordings has gone through a series of changes from vinyl analogue records, through tapes and compact discs to the idea of a downloaded file.
The basic need – for a customer to have a store of music they can listen to – has not changed. The technology applied to meet that need however has changed significantly.
Reading 14: Product and service design
The importance of new product development (NPD)
Breakthrough products – Some products are so unique that they create their own new market and product category.
Examples would include the first mobile phone or the first iPad.
New product failure rates
It is likely that 40% of newly introduced products will not achieve their sales or profitability objectives.
Reasons for the failure of new products launch:
The company cannot support the growth
The product is launched too soon
The product does not have sufficient appeal to the market
The customer does not understand the product
There is no market for the product despite its novel features
Reading 14: Product and service design
Design as a process
Slack et al. (2011) break the design process into five broad steps:
1- Concept generation
2- Concept screening
3- Preliminary design
4- Evaluation and improvement
5- Prototyping and final design
* The UK Design Council split the design process into four distinct phases, with sub-activities within each of these phases
Reading 14: Product and service design
The design council ‘double diamond’ framework
Reading 14: Product and service design
Double diamond framework
Phase 1: Discover
Here people involved in the design activity look at a wide range of ideas and sources of information to generate very different sets of ideas about new products and services that could be produced.
Phase 2: Define
Ideas generated in Phase 1 are reviewed to filter out those ideas that stand least chance of successful development. By the end of this phase everyone in the team needs to agree on the best options to pursue.
Reading 14: Product and service design
Double diamond framework
Phase 3: Develop
This is where features and options are tested, usually through some form of prototyping.
Phase 4: Deliver
In this stage ideas have been refined during the prototyping activities and the final checks are put in place.
Reading 14: Product and service design
Design as a process
Disadvantages to this type of structured approach of NPD:
Not all major innovations come as a result of deliberate research and development activity.
The screening process might eliminate very good ideas because of the perceived lack of fit with corporate requirements, even though the ideas might be very good.
Over-control of staff during the design process can limit the divergent initial stages and restrict creativity.
Reading 14: Product and service design
Design thinking
Design thinking means that innovation is powered by a thorough understanding, through direct observation, of what people want and need in their lives and what they like or dislike about the way particular products are made, packaged, marketed, sold, and supported.
Reading 14: Product and service design
6 principles of design thinking
Reframe ideas – Take a step back to see what assumptions you are making and whether you can look at the problem from a different angle.
Understand the user – Put a lot of effort into understanding the user at a much deeper level. Gain an insight into their needs and values.
No idea is too wild – Come up with ideas quickly and avoid restraints. Generate a range of human-centric solutions.
Collaborate – Learn to work with a multi-disciplinary team in a collaborative manner. Use people to solve problems from different perspectives.
Test your ideas – Create low-cost prototypes quickly and obtain feedback immediately on how this meets users’ needs.
See the bigger picture – Look at the business and design strategies holistically so that you look at the value of what you are doing in the right context.
Reading 14: Product and service design
The design of products and services
For product design the focus is very definitely on the functionality of the product and the tangible aspects of how this meets customers’ needs.
In essence, service design is much more about the design of the process of what the customer experiences as much as the tangible aspects of how needs are met
Reading 14: Product and service design
Product design
In addition to functionality there are many other aspects that need to be addressed. These include:
Aesthetics: The styling of a product is a key consideration once functionality has been achieved.
Reliability: – A product is of little use if it performs well for a short period of time but then fails in some way through lack of reliability.
Maintainability: Related to reliability, a product is of less use if it is too difficult to maintain.
Durability:– Designers will often have to address how long a product is expected to last for before it is replaced.
Produce-ability: It can be easy to design a product in a way that is too expensive, or even impossible, to actually make. Designers always have to think about how components fit together and how the product will work its way through the production process. They also have to think about how the product reaches the customer in the distribution system.
Reading 14: Product and service design
Service design: the service concept
To understand service design you must first understand the nature of a ‘service concept’. Johnston and Clark (2005) identify five elements of the service concept:
The organizing idea – The ‘organizing idea’ is a statement of the nature of the service being bought. This helps to identify the most important elements of the overall service experience. What is the overall purpose of the service that is being offered?
The service experience – When you design a service you need to think about the customer’s direct experience of the service process. This includes the steps the customer goes through to experience the service, how the customer interacts with the service and how staff providing the service deal with the customer.
Reading 14: Product and service design
Service design: the service concept
The service outcome – Designers must have a clear understanding of the outcome the customer is seeking and how this is measured.
The service operation – Any design must identify all aspects of how the service is delivered.
The value of the service – The customer will compare the perceived benefits of the service against its costs.
Reading 14: Product and service design
