Differentiating Factors in Product Design

Quality

Consumers place a value on quality; therefore high quality products may be able to win share and/or command a price premium.

Learning Objectives

Identify the attribute of quality at the design stage as a differentiating factor

Key Takeaways

Key Points

  • Quality is considered a non-functional requirement in product design, affecting the execution and evolution of a product.
  • The five aspects of quality in a business context include producing, checking, controlling, managing, and assuring quality in products and services.
  • Manufacturers often view quality as a driver for productivity, increased revenues, and technological advances.

Key Terms

  • extensibility: A quality of design that takes possible future advances into consideration and attempts to accommodate them.
  • ISO: The ISO is the International Organization for Standardization.
  • conformance: The act of conforming; conformity.

Quality

Quality in business, engineering, and manufacturing has a pragmatic interpretation as the non-inferiority or superiority of something; it is also defined as fitness for purpose. Product quality can vary depending on perception and is considered somewhat subjective since it may be understood differently by different people. When it comes to quality in product design, manufacturers might measure how well products conform to certain requirements or the level of accuracy in products and services following production. Consumers may focus on product features and how well the product compares to competing brands in the marketplace. Support personnel may measure quality in the degree that a product is reliable, maintainable, or sustainable.

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Improving Product Quality: Improving product quality in businesses can lead to better productivity and more innovation.

Quality is considered a non-functional requirement in engineering, affecting the execution and evolution of a product. Product qualities can be divided into two main categories:

  • Execution qualities, such as security and usability.
  • Evolution qualities, such as testability, maintainability, extensibility, portability, and scalability.

Product Quality in Business

During the 1960s, the U.S. military, aerospace, and nuclear industries developed the original versions of the Quality Management System Standards (eventually merged to ISO 9001). These standards were established to produce better products on a consistent basis, while focusing on production, conformance, and quality control mechanisms. Within areas such as product design and manufacturing, five main aspects of quality fall under this scheme. They include:

  1. Producing – providing a product or service.
  2. Checking – confirming that a product or service has been produced correctly.
  3. Quality Control – controlling a process to ensure that the outcomes are predictable.
  4. Quality Management – directing an organization so that it improves its performance through analysis and innovation.
  5. Quality Assurance – obtaining confirmation (usually from the purchaser or a third-party) that a product or service will be satisfactory.

Managing quality is fundamental to any activity, particularly in the design and manufacturing of consumer and industrial goods. For manufacturers of products, it is commonly stated that “quality drives productivity.” Better productivity is viewed in direct correlation to increased revenues, employee opportunities, and technological advances. Thus, businesses must have a clear understanding of all aspects of product quality, measure product performance, and adapt their market strategy for longevity and growth.

Design and Feature Set

Premium features and design may help differentiate a product to earn it share or a price premium in the marketplace.

Learning Objectives

Outline the concept of design and feature sets as differentiating factors in product design

Key Takeaways

Key Points

  • During product design, companies must consider factors such as cost, producibility, quality, performance, reliability, serviceability, and user features.
  • Companies must be cognizant of feature creep, which is the ongoing expansion or addition of new features in a product.
  • Product design teams can control feature creep by setting strict limits for allowable features or limiting features in some product versions.
  • Once products reach the stage of maximum functionality, manufacturers face the choice of adding extraneous functions, sometimes at the cost of efficiency.

Key Terms

  • serviceability: The property of being serviceable, of being useful for some function.
  • feature creep: The tendency of a design project or product cycle to accumulate more and more features or details, rather than to be completed and released at a more basic level.

Design and Feature Set

In systems engineering, a requirement (often referred to as a functional requirement) can be a description of what a system must do. Another type of requirement specifies something about the system itself, and how well it performs its functions. Such requirements are often called non-functional requirements, performance requirements. or quality of service requirements. Examples of such requirements include usability, availability, reliability, supportability, testability, and maintainability. These requirements define the characteristics or features of the desired product during the design process.

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Product Features: Features must meet usability and reliability requirements before being built into products and systems.

Product Design Process

Product design involves developing a device, assembly, or system into an item for sale using a production manufacturing process. During product design, engineers and designers must consider factors such as cost, producibility, quality, performance, reliability, serviceability, and user features. A product must go through the design and development of its mechanical, electronics, and software components before transitioning to manufacturing for mass production.

For example, the development of digital cameras would include defining the feature set; designing the optics, as well as the mechanical and ergonomic aspects of the packaging; developing the electronics that control the various components; and developing the software that allows users to view and manipulate photos, store them to memory, and download to them to a computer.

Dangers Of Feature Creep

Customer demand for particular features or functionality can result in products tailored to very specific, niche markets. However, manufacturers must be cognizant of feature creep, which is the ongoing expansion or addition of new features in a product. Although providing consumers more useful or desirable products and increasing sales are priorities for most businesses, extra features going beyond product function can result in over-complication.

Once products reach the stage of maximum functionality, manufacturers face the choice of adding extraneous functions, sometimes at the cost of efficiency. On the other hand, the manufacturer must deal with ignoring older versions at the cost of being perceived by the market as stagnant or dated. Nevertheless, introducing a bloated feature set can move the product or system beyond its initial goals, increasing production costs and schedule overruns. Introducing too many requirements into a feature set has often been blamed for endangering and even killing products and projects.

Another major cause of feature creep might be a compromise from a committee which decides to implement multiple, different viewpoints in the same product. As more features are added to support each viewpoint, it might be necessary to have cross-conversion features between the multiple viewpoints, further complicating the total features.

Feature Control In Product Design

To control the number of product features during the design phase, manufacturers set strict limits for allowable features and multiple variations. Excess features are removed or delayed until the later delivery phases of the project. Quality control is also maintained through multiple variations of products, where features are kept limited in some versions. Because the ever-growing, ever-expanding addition of new features might exceed available resources, a minimal “basic” version of a product can be maintained separately to ensure operation in smaller operating environments.

Other companies might use the “80/20 Rule”, where more basic product variations might support the needs of about “80%” of the users. Thus, the bulk of end-users are not subjected to the complexity (or extra expense) of features requested by the remaining 20% of users. These extra features are still available, but may be available in only select versions of the products.

Support and Help

Excellent customer service can help differentiate a product or brand and may lead to increased brand loyalty over time.

Learning Objectives

Examine the role of support and help programs as a differentiating factor in product design

Key Takeaways

Key Points

  • Today, most major telecommunications, IT and electronic companies run virtual support and help desks to provide user assistance around the world.
  • Virtual product support allows organizations to optimize their overall IT support process and gain competitive advantages when it comes to delivering quick and efficient technical support.
  • Companies, especially larger organizations, often offer internal technical support and help desk services to their staff for computer-related problems.
  • In addition to virtual help desks, product support and help services are delivered via email, toll-free numbers, or at physical locations.

Key Terms

  • extranet: A private computer network that uses Internet protocols and can be accessed by authorized individuals via the Internet.

Support and Help

Rapid globalization and expansion of technology are quickly making geography irrelevant; eliminating time constraints for customer support and help functions in organizations. Moreover, as more people telecommute from home and work from remote locations, internal information technology (IT) administrators must spend more time troubleshooting and fixing employees’ problems.

An illustration that shows how companies have tried to streamline the customer support process.

Customer Support: In today’s interconnected world, product support and help services are delivered through multiple channels.

This increased demand for technical services requires IT support organizations to be more agile in diagnosing and resolving product issues. Today, most major telecommunications, IT and electronic companies run virtual support and help desks to provide user assistance around the world. As a result, these organizations are able to optimize their overall IT support process and gain competitive advantages when it comes to delivering quick and efficient technical support.

The Role of Product Support and Help Services

Users of mobile phones, televisions, computers, software products, and other electronic or mechanical goods will occasionally need product support services. This service is usually offered in the form of a help desk that acts as an information and assistance resource. Product support professionals attempt to help users solve specific problems with a product—rather than providing training, customization, or other support services.

Most companies offer either free customer support or charge for premium customer support and help services. Companies, especially larger organizations, offer internal technical support and help desk services to their staff for computer-related problems.

Types of Product Support and Help Services

The Internet serves as a primary source for freely available product support. Virtual help desks, which allow organizations to virtually deploy IT technicians on demand to support users can efficiently manage and allocate organizational resources. Product support personnel can access any computer to provide support despite the end users’ or technicians’ location.

Some companies develop extranet sites, or customer websites that allow users to log calls and report incidents. Virtual help desks access these systems through support sessions where they can diagnose and fix computer issues quickly. This eliminates in-person customer service calls and ineffective phone-only tech support sessions, making the help desk more efficient.

However, many organizations still offer support services via email and toll-free numbers. Some companies also offer live support at physical stores and locations. Nevertheless, the Internet has allowed for a new form of product support to develop. Some online communities, which are moderated by product users, have emerged to give support where manufacturer support is lacking. These experienced users may provide advice and assistance with problems, or offer work-arounds to fellow users unable to find solutions on their own or through the vendor.

Deletion

Product deletion, either through product replacement or product elimination, results when products fail to meet company expectations.

Learning Objectives

Illustrate the reasons for and the impact of product deletion

Key Takeaways

Key Points

  • Companies are increasingly under pressure to evaluate their existing product line and make continuous decisions about adding new products or deleting existing ones.
  • In addition to weak sales and profit, brands delete products that fail to align with marketing strategies or that demonstrate an unfavorable market outlook.
  • Product failure rates vary by industry, but it is estimated that failure rates for new packaged goods range anywhere from 75% to 90%.

Key Terms

  • revenue stream: A revenue stream is a method that a company, organization, or individual uses to collect money—often automated—from users of their product or service. In essence, it is a method of earning money and a way to protect it.

Deletion

The twenty-first century marketplace is dynamic, fast-changing, and increasingly fickle. More and more businesses realize that no product lasts forever, and that sales levels can fluctuate dramatically over time. As a result, companies are under pressure to evaluate their existing product line and to make continuous decisions about adding new products or deleting existing ones. Brands must task their engineering and design teams to produce successful products that generate a consistent stream of sales for both short-term profit and long-term survival. An organization must establish a series of successful products, if that organization wants to maintain a consistent stream of sales or else grow sales over time. One reason for this pattern is the product life cycle. No product lasts forever, and sales levels can fluctuate dramatically over time.

Factors in Product Deletion

Deletion is the process of removing products that perform below market expectations or fail to meet company objectives. Deletion results in either product replacement or product elimination. Product deletion requires the company to evaluate its entire product mix and pinpoint where organizational resources can be allocated elsewhere to generate consistent revenue streams.

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Coca-Cola Vanilla: Coca-Cola Vanilla was the limited relaunch of Vanilla Coke from the early 2000s to compete with Pepsi Vanilla. It was phased out in North America by the end of 2005 due to low sales.

In addition to weak sales and profit, brands delete products that fail to align with marketing strategies, or that demonstrate an unfavorable market outlook. Market trends and consumer tastes often dictate whether products perform well in the long-term or taper off as a passing fad. However, factors including a company’s business model, culture (or local tastes), government politics and/or regulations, and product malfunction can all contribute to the removal of a product.

Failure rates of products vary by industry. Despite significant investment in product development and market research, it is estimated that failure rates for new packaged goods range anywhere from 75% to rates as high as 90% (source: catalinamarketing.com). When considering “innovative” new products, Harvard Professor John T. Gourville estimates that approximately half of all such products fail.

Business Impact of Product Deletion

Once a company eliminates a product from its offering, the brand must decide whether its goal is to maintain or increase sales. To maintain revenues, the company must continue investing in its remaining products and ensure they are competitively positioned in the marketplace. However, if the company seeks to increase sales in the near future, then it must introduce a new group of successful products to generate additional revenue.

Organizational Requirements for Product Development and Management

Product development combined with product marketing make up the product management function within an organization.

Learning Objectives

Construct the relationship between product development and product management

Key Takeaways

Key Points

  • Product management spans many activities, from strategic to tactical, and can be shared by other roles, such as product engineering.
  • Many interpretations exist for product management roles and functions and vary depending on company size, history and industry.
  • Product management often serves an interdisciplinary role, bridging gaps within the company between engineering-oriented teams and commercially oriented teams.
  • To facilitate the launch and marketing of new products, product management teams may perform tasks, including research and competitive intelligence, and sales training.

Key Terms

  • lifecycle: the stages through which a product or its category bypass, from its introduction to the marketing, growth, maturity to its decline or reduction in demand in the market.

Organizational Requirements for Product Development and Management

Product management is an organizational lifecycle function within a company dealing with the planning, forecasting, or marketing of a product or products at all stages of the product lifecycle. Product development – the process of bringing new products to the marketplace – combined with product marketing, make up the product management function that oversees the launch of a company’s new products.

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Product Launch: Some organizations set up product management teams so that they intersect between marketing and engineering activities.

Product management spans many activities, from strategic to tactical, and varies based on the organizational structure of the company. Product management can be a function separate on its own, or fall under marketing or engineering.

Functional Requirements of Product Management

Depending on the company size and history, product management has a variety of functions and roles, and can be shared across different departments, such as product development or engineering. A product manager investigates, selects, and develops one or more tangible products for an organization. However, product management also deals with intangible products, such as music, information, and services. Many interpretations exist for product management roles and functions and vary depending on company size, history, and industry.

The Intersection between Product Management, Product Development and Marketing

Frequently there is Profit and Loss (P&L) responsibility as a key metric for evaluating product management performance. In some companies, the product management function is the hub of many other business activities around the development and launch of a product. In other organizations, product management is one of several things that need to occur to successfully launch, monitor, and manage a product. Product management often serves an interdisciplinary role, bridging gaps within the company between different sets of expertise.

This intersection most commonly happens between engineering-oriented teams and commercially-oriented teams. Often, product management professionals serve as the middlemen between product development and engineering and marketing and sales teams. They often translate business objectives set for a product by marketing or sales into engineering requirements for product development. Conversely, the product management team may work to explain the finished product’s capabilities and limitations to marketing and sales professionals. This constant exchange between technical and business teams ensures that product benefits and features are accurately communicated to target audiences.

To facilitate this communication process, product management teams will perform activities including customer research, competitive intelligence, industry analysis, and competitive analysis. Likewise, product management works closely with marketing distributing messages, training sales people, developing market strategies, and communicating messages through advertising and public relations channels.