Product Development

So far, the product concept may have existed only as a word description, a dra\\ing or perhaps a crude mockup. If the product concept passes the business test, it moves into product development. Here, R & D or engineering develops the product

product development concept into a physical product. The product development step, however, now

Developing the product calls for a large jump in investment. It will show whether the product idea can be

concept into a physical turned into a workable product.

product in order to The R & D department will develop one or more physical versions of the

ensure that the product product concept. R & D hopes to design a prototype that will satisfy and excite

idea can be turned into a consumers and that can be produced quickly and at budgeted costs. Developing a

•workable product. successful prototype can take days, weeks, months or even years. The prototype

must have the required functional features and also convey the intended psycho logical characteristics. The fuelcell electric car, for example, should strike

consumers as being well built and safe. Management must leam what makes consumers decide that a ear is well built. To some consumers, this means that the

car lias 'solidsounding' doors. To others, it means that the car is able to withstand heavy impact in crash tests.

When the prototypes are ready, they must be tested. Functional tests are then conducted under laboratory and field conditions to make sure that the product performs safely and effectively. The new car must start easily; it must be comfort

able; it must be able to go around corners without overturning. Consumer tests are conducted, in which consumers testdrive the car and rate its attributes. For some products, prototyping and product development may involve both the key intermediaries that supply the product or service and the final consumer or end user. Consider the following example:

In the 1980s, Philips Consumer Electronics, Sony and Matsushita joined forces to develop a common format for consumerbased multimedia systems using compact discs. CDinteractive or CDi was the result.

The CDi player plugs into a TV set and the user interface is a remote control device. The initial use of CDi is for playing games And watching movies, but other applications such as home shopping are potentially very probable.

Philips, however, recognizes that, as with any new technology, the potential for home shopping must be demonstrated. First, home shopping companies are unlikely to replace their current paperbased shopping

616 • Chapter 14 Product Development and LifeCycle Strategies

catalogues with CDs without knowing if the multimedia homeshopping system works.

Philips launched the HOMESTEAD (Home Shopping by Television and Discs) ESPRIT project in June ] 992, which involved several user organizations Freemans, one of the largest homeshopping catalogue companies in the UK, Page & Moy, a major holiday provider, Barclays Bank and Little Rig One, a Belgian audiovisual company.

Barclays and Little Big One each received a 'multimedia toolkit' developed earlier by Philips. The toolkit was designed to be versatile and to allow the user company to assemble CDbased multimedia catalogues for itself and its partners. The customer test results were exceedingly encouraging: for example, Freeman's clothes catalogue showed its clothes and accessories in fullmotion video and allowed consumers cither to browse through the catalogue or to go straight to the section that interested them. The Page & Moy catalogue helped users plan their cruise holidays, which were brought to life on the TV screen. The package takes

the user on a tour of the ships from five different cruise companies, while also providing all the itinerary and booking details.

Philips then started an extensive consumer trial in the middle of 1994. the largest of its type ever undertaken 5,500 homes were issued with the Freeman, Page & Moy and Barclays catalogues and a questionnaire designed to obtain consumers' response. Some 300 homes had never used CDi and were vital for providing information on how the new product might be promoted to nonusers of CDi.' J Tests such as these can be expensive, but the feedback from potential customers is invaluable in helping the firm to prepare for the next steps in the new product programme.

When designing products, the company should look beyond simply creating products that satisfy consumer needs and wants. Too often, companies design their new products without enough concern for how the designs will be produced, The designs are then passed along to manufacturing, where engineers must try to find the best ways to produce the product. Companies may minimize production problems by adopting an approach towards product development called design

for manufacturability and assembly (DEMA). Using this approach, companies work to fashion products that arc both satisfying and easy to manufacture. This often results not only in lower costs, but also in higherquality and more reliable products. For example, using DFMA analysis, Texas Instruments redesigned an infrared gunsighting mechanism that it supplies to the Pentagon. The redesigned product required 75 fewer parts, 78 per cent fewer assembly steps and 85 per cent less assembly time. The new design did more than reduce production time and costs; it also worked better than the previous, more complex version. Thus DFMA can be a potent weapon in helping companies to get products to market sooner

and to offer higher quality at lower prices."

Product Development