Product Innovation

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Product Innovation

• Topic 2

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• Innovation and the continuous development of new
  and improved products are key to the design
  process. This topic considers the relationship
  between the design cycle and the product cycle.
  It moves on to explore the role of invention in
  innovation and the impact of market pull and
  technology push on product innovation.
  Establishing and developing markets for products
  are a critical element of the product cycle.

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Designers and the Product Cycle

• 2.1

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The Product Cycle

• Inception and design
• Production
• Sales
• Use
• Retirement
• The designer has impact (but is not necessarily
  in control) at each level

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Stages of the product cycle

• There are three basic stages of use for a product
• In the early stages of the product cycle, many
  changes to the product take place until it
  develops to the
• mature stage, where it is diffused into the
  market, gains acceptance and sells well.
• In the late stage, the product begins to decline
  in need and therefore in sales

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Can you Identify Products in each Stage?

• Carbon Nanotubes are in early stage of
  development.
• The ballpoint pen is in the mature stage, as it
  still sells well although the design does not
  change much.
• The cassette tape is in the late stage, as it has
  been overtaken by successive generations of
  products.

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Design versus product cycles

• the design process is aimed at producing a
  suitable solution to a problem,
• the product cycle is concerned with putting that
  solution into commercial practice

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For many products the product cycle has shortened

• Look at the differences between a laptop computer
  and a ballpoint pen.
• Laptop computers are an intensely competitive
  market, with size and power being key issues
• It is not unlikely to have a pen that is useable
  longer than a laptop.

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Innovation and Invention

• 2.2

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Invention and Innovation

• Invention - The process of discovering a
  principle. A technical advance in a particular
  field often resulting in a novel product.
• Innovation -The business of putting an invention
  in the marketplace and making it a success.

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Stages of innovation

• Developing an idea into a viable product
• Production
• marketing and sales
• followed by redesign
• the cycle or spiral continues

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Science and Technology

• Science explains how the world is
• Technology uncovers new possibilities for
  materials, manufacturing techniques and
  processes.
• Often technology is an application of science in
  a way that is not yet fully understood

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Most inventions fail to become innovations

• Marketability
• financial support
• Marketing
• the need for the invention
• Price
• Consumer or Business resistance to change
• aversion to risk

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Design and Innovation.

• For continued innovations (re-innovation),
  products and processes are constantly updated
  (redesigned) to make them more commercially
  viable and to give consumers choice and improved
  products.

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Definitions

• dominant design - The design containing those
  implicit features of a product which are
  recognized as essential by a majority of
  manufacturers and purchasers.
• diffusion into the marketplace - The wide
  acceptance (and sales) of a product.
• market pull - The initial impetus for the
  development of a new product is generated by a
  demand from the market.
• technology push - The impetus for a new design
  emanates from a technological development.

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Dominant Designs

• ballpoint pen (Bic )
• Apple iPod
• Coca-Cola.

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The difficulties of getting a product to diffuse
into the marketplace.

• Competition
• Local
• National
• Global
• The problems of getting novel products to market
  include product launches and marketing

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market pull or technology push

• Push and pull are present in most successful
  innovations.
• The explanation should apply only to the origin
  of the idea or where the idea seems to have been
  generated.

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The Lone Inventor

• lone inventor An individual working outside or
  inside an organization who is committed to the
  invention of a novel product and often becomes
  isolated because s/he is engrossed with ideas
  which imply change and are resisted by others.
• it is becoming increasingly difficult to be a
  successful lone inventor
• Most products are now quite complex and rely on
  expertise from various disciplines.
• Most designs are developed by multidisciplinary
  teams
• The amount of investment required is often too
  much for one individual.

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The Lone Inventor

• They are often used to setting their own targets
  rather than working as members of teams.
• They can be dogmatic in their methodology and
  less flexible than team workers.
• The lone inventor may lack the business acumen to
  push the invention through to innovation

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Product Champions

• product champion - An influential individual,
  usually working within an organization, who
  develops an enthusiasm for a particular idea or
  invention and champions it within the
  organization.
• The product champion is often a forceful
  personality with much influence in a company.
  He/she is more astute at being able to push the
  idea through the various business channels and is
  often able to consider the merits of the
  invention more objectively.

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Money

• Innovators may have difficulty in obtaining
  financial support for an invention.
• Most people with money to invest will be inclined
  to wait until it is clearer whether an invention
  is going to be successful before investing the
  problem is to get them to take the risk.

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People and Markets

• 2.3

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Definitions

• technophile - Someone who immediately welcomes a
  technological change.
• techno-cautious - Someone who needs some
  convincing before embracing technological change.
• technophobe - Someone who resists all
  technological change.

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Reactions

• People's reactions to technological change vary
  depending on their values and personal
  circumstances.
• First-order effects and second-order effects
  should be taken into account, for example,
  personal gain in owning a car versus social and
  environmental considerations

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Corporate Strategy

• corporate strategy - Long-term aims and
  objectives of a company and ways of achieving
  them by allocation of resources
• Two types
• Pioneering (next Slide)
• Imitative

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Pioneering Strategy

• Pioneering means being ahead of the competitors
  by introducing a new product first.
• It is the most risky (costly) strategy but one
  with the potential for the largest gains
• A pioneering company requires a strong research
  and development (RD) capability, which is
  expensive. A pioneering company needs to be
  financially secure and requires product champions
  to push new ideas.
• Consider the Sony or Apple companies and their
  various pioneering developments.
• Good market research can offset some risk, but is
  problematic for novel products

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Imitative Strategy

• The imitative strategy aims to develop a product
  similar to the "pioneered" product as quickly as
  possible
• It takes advantage of RD invested by others
• Is less risky
• based on a strong development capability
• It is often best to use a combination of
  strategies

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Strategies for Innovation.

• market penetration - Increasing sales to existing
  customers or finding new customers for an
  existing product. (usually through advertising)
• market development - Finding new applications for
  existing products thereby opening up new markets.
  (Nylon was originally developed for parachutes)

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More Strategies for Innovation

• product development -The creation of new,
  modified or updated products aimed mainly at a
  companys existing customers. (replacing
  mechanical with microelectronic controls in
  domestic products)
• Diversification - Involves a company in both the
  development of new products and in selling those
  products to new companies. (different types or
  colors of electrical plugs)

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Market Sector and Market Segmentation

• Market Sector - A broad way of categorizing the
  kinds of market the company is aiming for.
• Market Segmentation - Markets divide up into
  smaller segments where the purchasers have
  similar characteristics and tastes.

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Markets may be segmented in many ways

• Income
• age group
• lifestyle
• geographical location

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More Definitions

• Robust Design - Flexible designs which can be
  adapted to changing technical and market
  requirements.
• Design Family - The evolution of a design into a
  variety of products that will appeal to a wide
  range of customers.
• mobile phones or personal stereos are examples of
  a robust design that has become a design family

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The End

• Product Innovation