TCC315Psych418 - PowerPoint PPT Presentation

Title: TCC315Psych418


1
TCC315/Psych418

• Designing a consumer product
• for Tier 4 markets
• Larry G. Richards

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Project 2 Goals

• to provide an overview of the basic processes for
  new product development in a competitive
  marketplace by simulating them in class.
• to develop the skills for successfully creating
  and developing a new product through a hands-on,
  team- oriented, project - based approach
• to address Tier 4 markets, and incorporate
  environmental and ethical concerns

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Class Projects

• Members of each team will generate a series of
  possible project ideas.
• The team will decide which idea to pursue.
• Each team will develop a new product, a
  production plan and a marketing strategy.
• Each team is expected to file a Disclosure
  Document or Provisional Patent with the U.S.
  Patent and Trademark Office.

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Project guidelines

• A material good (a product not a service)
• Should have a demonstrable market
• Not too complex small number of parts
• Must be able to create a prototype
• No technological breakthroughs required
• Access to potential users or customers
• No highly proprietary ideas
• At least one enthusiastic advocate

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Mission Statement

• What does your team plan to accomplish?
• Problem statement/product description
• Key business goals
• Who are your customers?
• Primary markets
• Secondary markets
• Assumptions/constraints
• Stakeholders

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Strategies for your Projects

• What problem are you trying to solve?
• Generate lots of ideas
• Sketch, model, prototype
• Select the best concept (or two)
• Test, iterate, refine, improve
• Get everything down on paper

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Project Tasks I

• problem statement list of complaints or desired
  improvements
• mission statement
  
  
• establish customer needs
• specify engineering characteristics
• generate concepts, multiple ideas
• select most promising idea

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Project Tasks II

• develop product architecture
• prepare Bill of Materials
• estimate costs
• document concept final sketches, CAD models,
  descriptions

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Project Tasks III

• create a prototype of your concept
• prepare Disclosure Document
• explore the competition
• develop Marketing Plan
• establish price
• select best methods for selling your product
• Complete a financial analysis
• plan the introduction of your product

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GANTT Chart

• developed in 1917 by Henry Gantt
• calendar oriented grid (or other temporal
  representation)
• Bar Chart
• shows time allocated for each activity
• bars filled as completed
• can show milestones, deadlines, products, and
  personnel assignments

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Gantt Chart

• effective tool for planning and scheduling
• easy to construct and understand
• must estimate durations
• doesnt handle
• dependencies
• uncertainties

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Gantt Chart

• A project management tool
• A plan for carrying out your project
• Tasks to be done
• Time frame for each task
• Whos responsible?
• What results will be achieved by when?
• A summary of personal and team commitments

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Customer focusWho is your audience?

• Your customers - Describe them
• Who needs your idea?
• Who are your customers?
• What are they like?
• What are their characteristics?
• What is your market?
• How many potential customers are there?
• Who will buy your product?

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Customers/Users

• Who is your product being designed for?
• What features or characteristics are included to
  appeal to this audience?
• Are any potential users excluded by your product
  design or features?

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What do customers want or need?

• Requirements, needs
• Desires, wants
• Amenities
• Conveniences
• Luxuries

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How do you know what people want or need?

• Reflect on your own experience
• Ask other people
• Observe people
• Consult experts
• Use other data sources

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Reflect on your own experience

• Introspect
• thoughts
• feelings
• behaviors
• Notice your reactions what causes
  problems,complaints,frustrations, confusions,... ?

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Getting Information from Customers

• Ask them
• Surveys, Questionnaires
• Interviews
• focus groups
• preferences/comparisons
• Observe them

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Observing Behavior

• People using a product
• Activities in a situation or environment

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Consult Experts

• lead users
• technology forecasters ( gurus )
• trends, directions

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Other Data Sources

• files on customer complaints
• evaluations of existing products
• media - newspapers, magazines
• government agency reports
• Consumer Reports,
• Product Literature ( competitors)
• Users Groups

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Understanding customers is a continuous process

• survey -gt data -gtanalysis -gtinterpretation -gt new
  questions
• needs change
• adaptation level
• standards
• luxuries

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The Perils of Market Research

• People often dont know what they want,
  especially in the abstract.
• People sometimes wont tell you what they want or
  need.
• People sometimes tell you what they think you
  want to hear.
• Peoples needs and tastes change.
• People often respond to social norms.

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Therefore

• Obtain multiple sources of information whenever
  possible.
• Use concrete props (products or prototypes) for
  evaluation.
• Listen AND observe
• Ask a lot of questions
• Let people tell you more

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Product architecture terms

• Decomposition
• Functional Elements
• Physical elements
• Architecture
• Modular
• Integral
• Mixed

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Product architecturedecomposition

• Break product down into its components
• Schematically (by functions)
• Physically (by parts and assemblies)

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Product architecture chucks

• Arrangement of functional elements
• Pattern of interactions between components
• Fundamental
• Incidental

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Bill of Materials

• preliminary
• estimates
• first approximation of product cost
• components
• assembly
• final
• solid figures
• DFM/A analysis

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Costs and Prices

• 4 to 1 rule A general rule in retail is that
  the retail price is four times your manufacturing
  cost, and that you sell it to the retailer for
  two times your manufacturing cost. Bolanos
  and Lewis

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How to estimate costs

• Work backwards from existing products
• Price / 4
• of components
• relative costs of components
• Obtain several estimates
• Establish upper bounds
• Refine estimates based on new information

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If costs are too high,

• look for ways to reduce costs
• outsource - have someone else make it
• compromise design
• abandon idea (for now)

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Strategies for Reducing Costs

• examine high priced components
• eliminate parts
• use less expensive materials
• buy off-the -shelf components
• conduct cost/benefit analysis on product
  features are any expensive features low on
  customer importance list
• redesign / simplify

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Financial Model

• start from the Bill of Materials
• include costs of
• production
• packaging
• distributing
• advertising
• marketing/selling
• service/warranty/maintenance

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Financial Model

• Clearly state your assumptions
• Note which numbers are estimates
• Indicate your confidence/uncertainties
• Create a spreadsheet
• Perform sensitivity analysis
• Predict your future profits

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Base Case Model

• development cost
• ramp-up cost
• marketing and support cost
• production cost
• production volume
• revenue
• timing and schedule of above cash flows

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Uses of Financial Model

• go / no go decisions
• should we proceed?
• Sensitivity analysis
• What if our assumptions are incorrect?
• Trade-offs
• Qualitative factors
• changes in competitive environment
• technological developments

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Your financial model

• Start from bill of materials
• Use a spreadsheet (or business planning product)
• List all the costs you can think of
• Start with general categories
• And rough cost estimates
• Refine as you get more information

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Defining a business plan

• Good A business plan is a document that
  convincingly demonstrates the ability of your
  business to sell enough of its product or service
  to make a satisfactory profit and be attractive
  to potential backers.

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Defining a business plan

• Better A business plan is a selling document
  that conveys the excitement and promise of your
  business to any potential backers or
  stakeholders.

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Why write a business plan?

• To sell yourself on the business
• To obtain bank funding
• To obtain investment funds
• To arrange strategic alliances

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Why write a business plan?

• To obtain large contracts
• To attract key employees
• To complete mergers and acquisitions
• To motivate and focus your management team

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What should business plan cover?

• Cover Page
• Company name and address
• Main Contact
• Phone number
• Confidentiality note
• Visual

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What should business plan cover?

• Table of Contents
• Executive Summary
• The Company
• The Market
• The product/service
• Sales and promotion
• Finances
• Appendices

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Executive Summary

• NOT
• an abstract
• an introduction
• a preface
• a random collection of highlights
• the business plan in miniature
• capture the excitement and essence of the
  business

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Executive Summary

• at most 2 pages
• longer is not a summary
• dont dilute your message
• This is all most people will read.
• It may constitute the basis for their decision.

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How are you going to convince potential investors
that they can make money investing in your
company and product?
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Your Company

• Whats your identity?
• Business strategy
• overall approach to producing and selling your
  product.
• Current status
• Future goals
• Management team

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Marketing Issues

• Who will buy your product?
• How do you know?
• Market research
• competitive environment
• Marketing is identifying your customer prospects
  and determining how best to reach them.

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Market research

• is there a market for your product?
• How big is it?
• Estimate actual numbers
• How much of it can you capture?
• Is it stable or changing?
• Growing or shrinking?
• Is it worth your while?

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Selling

• Selling is convincing these prospects to buy.
• What are you really selling?
• What benefits are you selling to the customer?
• Quantify them.
• Develop a promotional theme.
• Identify prospective customers

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Advertising

• where ?
• how ?
• what message?
• How to differentiate your product?

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Presenting your product

• A good name
• for the product
• for the company
• Graphics, animations, videos
• logo
• advertising
• Your Message, a theme for your ads

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Manufacturing issues

• Design
• Product architecture
• Features
• Materials
• Processes
• Facilities

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Design for X

• manufacture
• assembly
• quality
• reliability
• disassembly
• recycling
• etc

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DFX

• Design decisions have impacts on all subsequent
  phases of a products life cycle
• Product and process design should be done
  together.

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Design for Manufacture (DFM)

• a philosophy whose purpose is to cause the
  designer to consider the manufacturing
  implications of design decisions
• the designer should be cognizant of the entire
  life history of the product she or he is designing

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DFM/A

• design for fabrication
• make the parts
• design for assembly
• put them together

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Manufacturability Objectives

• Simplicity of design
• Standardization of parts and materials
• Ready availability of components and materials
• High quality and reliable suppliers
• Low cost

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Materials

• Metals
• Plastics
• Wood
• Glass
• Fabrics
• Composites
• David G. Ullman The Mechanical Design
  Process, second edition, 1997

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Process Planning

• For us, this will be relatively informal.
• How will your product be made?
• What steps and processes are involved?
• What machines and labor will be required?
• How will your product be packaged for
  distribution?

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Facilities

• What kind of production facility will you need
  to produce your product?
• How many units can you produce and store?
• Warehousing space? Inventory control?
• Testing facilities?
• Distribution arrangements?

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