PRODUCT DEVELOPMENT FOR GLOBAL MARKET

THE PROCESS OF PRODUCT AND PACKAGING DEVELOPMENT

Rahim Jabbar

19 June 2007
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THE PROCESS OF PRODUCT AND PACKAGING DEVELOPMENT

Main Discussion (1) The Reasons and Scope of Product Development
The Reasons for the Need of Product Development Some Goals of Product Development Product Development Stage (PD) The Cycle of Planning and Implementing Product Development Technical and Economical Tests for Each Stages of Product Development Assessment of Opportunity Costs Key Questions in Product Development

THE PROCESS OF PRODUCT AND PACKAGING DEVELOPMENT

Main Discussion (2) Product Design
Definition of Product Design Inputs for Product Design Consumer Awareness Product Vision Understanding Product Vision Understanding Product Concept Understanding Product Definition Product Design: Vision, Concept and Product Definition

THE PROCESS OF PRODUCT AND PACKAGING DEVELOPMENT

Main Discussion (3) Examples of the Format of Product Design
Product Vision Product Concept Product Definition

Product Packaging
Definition Packaging for End Consumer Packaging for Shipping Packaging from Marketing Standpoint Packaging Materials Packaging for Export Market

THE PROCESS OF PRODUCT AND PACKAGING DEVELOPMENT

Main Discussion (4)

Principles of Good Designs

Creating Product Design Exercise

Child Toy Leather Shoes Muslim(ah) Clothing

THE REASONS AND SCOPE OF PRODUCT DEVELOPMENT

The Reasons for the Need of Product Development

Product of Competitor B

Product of Competitor A

Raw Materials
MANUFACTURING METHODS &TECHNIQUES (MANUFACTURING TECHNOLOGY)

Your Product

TARGET CUSTOMER/ CONSUMER SEGMENT

Raw Materials

CHANGES TO CUSTOMERS, Competitor C COMPETITOR PRODUCTS, MANUFACTURING TECHNIQUES AND RAW & SUPPORTING MATERIALS CHANGES THE COMPETITIVE POSITION OF YOUR PRODUCT NEEDS CONTINUOUS DEVELOPMENT TO MAKE IT A PREFERRED CHOICE FOR CONSUMERS

Product of

Product of Competitor D

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Some Goals of Product Development

CUSTOMER SEGMENT OR TARGET MARKET OLD P R O D U C T O L D N E W CONTINUOUS PRODUCT DEVELOPMENT DEVELOPMENT OF NEW PRODUCTS FOR OLD MARKET SEGMENTS NEW DEVELOPMENT OF OLD PRODUCTS FOR NEW MARKET SEGMENTS DEVELOPMENT OF NEW PRODUCTS FOR NEW MARKET SEGMENTS

PRODUCT DEVELOPMENT IS ABSOLUTELY NEEDED TO STRENGTHEN MARKET POSITION AND TO DEVELOP MARKETS
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SCOPE OF PRODUCT DEVELOPMENT

PRODUCT DEVELOPMENT IS A SERIES OF ACTIVITIES TO BRING NEW PRODUCT CONCEPTS INTO A FINISHED RESULT WHICH IS SALEABLE AND READY TO BE MARKETED

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TECHNICAL STAGES OF PRODUCT DEVELOPMENT

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THE CYCLE OF PLANNING AND IMPLEMENTATION OF PRODUCT DEVELOPMENT (PD)

PRODUCT DEVELOPMENT IDEA GENERATOR NO!
Continue/ Repeat

DEVELOP IDEAS

Fails Testing

?
STOP
YES/OK!
IS PRODUCT SMOOTHING AND RENEWAL FEASIBLE?

YES/OK!

PRODUCT DESIGN

Fails Testing

?
YES/OK!

Contiune/ Repeat

STOP

RESULT EVALUATION

PRODUCT MANUFACTURE

Fails Testing

?
YES/OK! PRODUCT LAUNCHING

Continue/ Repeat

STOP

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TECHNICAL TESTS FOR EACH STAGE: WHETHER THE IDEAS/DESIGNS ARE TECHNICALLY FEASIBLE
REVIEW

Are the raw materials easy to obtain?

Estimate raw materials costs

??

??

Can we obtain Manufacturing Techniques and the necessary equipment?

Review whether the total costs worth the overall benefits

Estimate purchase costs of equipment and training

OK

!!!

NEXT STAGE
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ECONOMIC/BUSINESS TEST FOR EACH STAGE: COSTS VERSUS BENEFITS

REVIEW
Determine the types Of costs related to product development (including the cost of risk)

Estimate the financial value of all costs

??

??

Review total costs versus total benefits Estimate the financial value of all benefits

Define the benefits of product development

OK
NEXT STAGE

!!!

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ASSESSMENT : OPPORTUNITY COST

Dont forget about opportunity cost, which is potential benefits lost if the company does not start product development Usually, an insightful Small-MediumEnterprise (SME) level businessperson will calculate opportunity costs thoroughly

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KEY QUESTION The main question of SME business-person is not whether to conduct product development, but rather : How can product development be conducted according to our business conditions and in a manner that best fits the wants and needs of the target market, in order to obtain maximum effectiveness with the most efficient funding?.
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PRODUCT DESIGN

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DEFINITION OF PRODUCT DESIGN

Product Design is the result of the product design process (which is a part of Product Development) that consist of a series of technical activities in three stages as follow: Understanding inputs on the business opportunities of new product designs Developing Concepts and Product Definitions Applying the Product Concepts (Making the Product)

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PRODUCT STRATEGY INPUTS FOR PRODUCT DESIGN

Consumer Insights
TARGET MARKET SEGMENT: WHAT ARE THEIR SPECIFIC NEEDS OF THE PRODUCT

Product Vision

COMPETE THROUGH UNIQUENESS

YOUR PRODUCT DESIGN
COMPARISON: ATTRIBUTES, UTILITIES, USES, BENEFITS

(To be developed) Strengths & Weaknesses of your current product

COMPETITORS PRODUCTS (Existing)

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CONSUMER INSIGHTS PRODUCT VISION (1)

Awareness and understanding about target consumers/customers is usually gained through Consumer Research and Study of Competitors Products. Research may be Qualitative Research or Quantitative Research. (Both require significant funding). SME Businesses can conduct simple and cheap research through(1): Observing customers/consumers that use your products and trying to understand the whats and whys

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CONSUMER INSIGHTS PRODUCT VISION (2)

SME Businesses can do a cheap research through (2) : Placing yourself in the consumers/customers shoes (role playing) and asking yourself what you would want if you were to use the products for yourself. You can go through the stages of asking what, how, and why until you find the essence of what you want out of the product.

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CONSUMER INSIGHTS PRODUCT VISION (3)

SME Businesses can do a cheap research through (3): In-depth interviews conducted by yourself of a person representative of the customer group (perhaps by buying lunch). The interview is done through staged questions (i.e. what,how, why) until you can figure out what the interviewee wants and what values are most important to him/her.

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CONSUMER INSIGHTS PRODUCT VISION (4)

SME Businesses can do a cheap research through (4): Studying the products of competitors, if necessary including taking them apart and breaking them down to understand what are they made of and the methods of manufacture. This is useful to compare and find out the strengths and weaknesses of competitors products. (Story of an entrepreneur whos able to reach the same conclusion both through high-cost research and through personal interviews and in-depth contemplation which both eventually become a deep and wide awareness of his product)

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UNDERSTANDING PRODUCT VISION (1)

PRODUCT VISION ANSWERS THE QUESTION: WHAT KIND OF PRODUCT DO WE WANT TO MARKET? WHAT ATTRIBUTES ARE NOT AVAILABLE IN OUR AND COMPETITORS CURRENT PRODUCTS, WHICH WE WILL THEN MAKE AND MARKET, BECAUSE THEY ARE WANTED BY THE CONSUMERS?

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UNDERSTANDING PRODUCT VISION (2)

PRODUCT VISION ANSWERS THE QUESTION:

WHAT OR KINDS OF DIFFICULTIES OR DRAWBACKS CAN BE FOUND IN CURRENT PRODUCTS THAT YOU WANT TO REDUCE OR ELIMINATE? (REMEMBER: EVERY CONSUMER KNOWS EXACTLY WHAT HE/SHE WANTS OUT OF YOUR PRODUCT. AS A BUSINESSPERSON YOU CERTAINLY WANT TO STRENGTHEN YOUR POSITION IN THE MARKET. THIS CAN BE DONE AMONG OTHER THINGS BY DEVELOPING QUALITY PRODUCTS THAT ARE PREFERRED BY CONSUMERS.
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UNDERSTANDING PRODUCT CONCEPT

PRODUCT CONCEPT IS A WRITTEN DOCUMENT OF

DESCRIPTION/EXPLANATION WITH SCHEMATICS OF A NEW

PRODUCT IDEA OR OF AN IMPROVEMENT OF OLD PRODUCTS. THE DESCRIPTION/EXPLANATION INCLUDE ATTRIBUTES, FUNCTIONS, USES AND THE BENEFITS OF THE PRODUCT TO THE TARGET CONSUMER, ALONG WITH A GENERAL EXPLANATION OF RAW MATERIALS AND SUPPORTING MATERIALS USED AND THE METHODS/TECHNIQUES OF MANUFACTURE (PRODUCTION TECHNOLOGY).

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UNDERSTANDING PRODUCT DEFINITION

PRODUCT DEFINITION IS THE ENLARGEMENT OF THE PRODUCT CONCEPT WHICH INCLUDE TARGET SEGMENT, POSITIONING STRATEGY, PRICE RANGE, DESIGN SPECIFICATIONS, EVEN SALES FORECAST

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PRODUCT DESIGN: PRODUCT VISION, CONCEPT AND DEFINITION

Product Definition
Positioning strategy, price range, design specification, sales forecast

CONSUMER AWARENESS

Product Concept:
Explanation and rough description of new product ideas or improvements to old products. Include attributes, functions, uses, target consumers, utilities for consumers, Manufacturing methods/techniques

Product Vision:
Which consumer problems or difficulties do you seek to fix by a new product? What are the drawbacks of current products in the market that you want to fix or eliminate? What new things do you Want to offer?

ADDED WITH INPUTS FROM MARKETING ASPECTS

ADDED WITH INPUTS FROM MANUFACTURING ASPECTS

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SAMPLE FORMAT OF PRODUCT DESIGN

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SAMPLE FORMAT OF PRODUCT DESIGN (1)

Product Vision: We ( Small Business XYZ) intend to produce healthy markisa juice extract packaged in attractive packaging Reason: most markisa juice extract products in the market today is not suitable for customers who want to keep their blood sugar level in check, or for customers who want to limit their carbohydrate intake, since current products available in the market utilize ordinary sugar as a sweetener agent. Moreover, markisa juice extract products are typically packaged in standard glass bottles (similar to typical soy bean sauce products) (Note: Both aspects mentioned in the product vision are idea sources for the development of markisa juice extract product. Juice extract is produced from the squeezing or squashing of fresh mature fruits.
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SAMPLE FORMAT OF PRODUCT DESIGN (2)

Product Concept: Healthy Markisa juice extract product is to provide the goodness of fresh markisa fruit flavor, sweet enough for consumers who are conscious of their blood sugar level. This juice drink is a tasty thirst quencher that is also healthy. This markisa juice extract contains lower levels of calorie since it uses 75% artificial sweetener aspartame and 25% sugar. (For 1 (one) liter of clear markisa juice extract typically 200 grams of fine sugar flour is used); For the Healthy Markisa Juice Extract, aspartame is added in the amount equivalent to the sweetness of 150 grams of sugar (which is around 1.5 grams, since aspartame available in the market is around 100 times sweeter than sugar of the same weight. (The best quality aspartame is around be 200 times sweeter than sugar of the same weight)

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SAMPLE FORMAT OF PRODUCT DESIGN (3)

Product Concept (Continued): The benefits of aspartame as substitute for sugar are: Enriching the sauce/taste materials of the drink. Does not cause faster teeth deterioration Useful for controlling body weight Useful for diabetic patients This markisa juice drink can become a part of a healthy food & drink diet Manufacturing technique (Refer to a separate handout paper). Where sugar is required, substitute of its part with aspartame weight of the same sweetness level with the sugar weight

Packaging: Requires attractive bottle design.

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SAMPLE FORMAT OF PRODUCT DESIGN (3)

Product Definition: Positioning Strategy: Healthy Markisa Juice Drink is positioned as a healthy and delicious thirst quencher product with the unique taste of the markisa fruit. Price Range: Price range is around 40% to 60% above the price of regular markisa juice product (Note : this requires costs and price calculation) Marketing Activity: Marketing communication activity is needed in the form of handout brochures distributed to customers outlets Sales Forecast: Initially only a few hundred fiberites of 24 bottles each will be offered to selected outles. Sales is predicted to increase by approximately 10% per month. (Note: Monthly sales forecast is needed.
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PRODUCT PACKAGING

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PACKAGING (1)
DEFINITION OF PACKAGING AN INTEGRATED SYSTEM TO PRESERVE, PREPARE A PRODUCT TO BE READY FOR DELIVERY AND DISTRIBUTION TO END CONSUMERS IN THE MOST EFFICIENT AND CHEAP MANNER (W.T.O)

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PACKAGING (2)
PACKAGING FOR END CONSUMERS - PACKAGING IN DIRECT CONTACT WITH ITS CONTENTS & ITS SIZE IS RELATIVELY SMALL AS NEEDED - ACTS TO PROTECT ITS CONTENTS FROM OXIDATION IN THE OPEN AIR AND TO PROTECT AGAINST HUMIDITY AND SUNLIGHT THAT CAN AFFECT THE PRODUCTS QUALITY.

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PACKAGING (3)
PACKAGING FOR DELIVERY/TRANSPORTATION PURPOSES - ACTS AS THE PROTECTOR OF A NUMBER OF PACKAGING FOR END CONSUMERS DURING HANDLING AND DELIVERY/TRANSPORTATION PROCESS - AS A TOOL OF GROUPING AND MOVING - AS EXTERNAL PROTECTOR WHEN THE PRODUCT IS BEING STACKED IN WAREHOUSES OR STORAGE FACILITIES

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PACKAGING (4)
INNOVATIVE AND ATTRACTIVE PACKAGING IS USEFUL TO ATTRACT CONSUMERS ATTENTION.

PACKAGING IS ONE OF THE MAIN COMPONENTS OF BRANDED

PRODUCTS MARKETING. PACKAGING ACT AS ETERNAL PROMOTER OF THE BRAND. AS SUCH, GOOD PACKAGING CONCEPT MUST TAKE THE FOLLOWING ASPECTS INTO CONSIDERATION: CAPABLE TO PROTECT THE CONTENTS OF ITS PRODUCT THE DESIGN INCLUDES DECORATIVE COLORED SURFACE

MOTIVES AND DISPLAY

LOGO DAN BRAND

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PACKAGING (5)
PACKAGING MATERIALS CAN BE MADE OF: 1. PAPER / CARTON 2. METAL : ALUMINUM, STAINLESS STEEL 3. GLASS 4. LAMINATED FLEXIBLE PACKAGING 5. PLASTIC: SOFT, HARD, RIGID OR SEMI RIGID CHOSEN MATERIALS DEPEND ON PRODUCTS THE FUNCTION AND PRICE, EASE OF SHAPING AND EASE OF CREATING DISPLAY AND SURFACE DECORATIVE DESIGNS

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PACKAGING FOR EXPORT MARKET (1)

THE PACKAGING MUST BE ABLE TO PROTECT THE PRODUCT UP TO A CERTAIN TIME LIMIT.(INCLUDING DURING TRAVEL, UP TO THE REQUIRED PRODUCT EXPIRY DATE) DESIGN MUST BE ATTRACTIVE AND MATCHES THE CULTURE OF ITS EXPORT DESTINATION COUNTRY

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PACKAGING FOR EXPORT MARKET (2)

PACKAGING AND PACKING MUST CONSIDER LOCAL HANDLING IN ORIGIN COUNTRYS PORT ALL THE WAY TO THE WAREHOUSE AND OUTLET RETAILERS AT THE EXPORT DESTINATION COUNTRY. LABELING MUST BE COMPLETE AND CLEAR. THE PACKAGING MUST BE ENVIRONMENTALLY FRIENDLY

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PRINCIPLE OF PRODUCT DISPLAY DESIGN

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TEN PRINCIPLES FOR THE DESIGN OF PRODUCT DISPLAY (BRAUNS TEN PRINCIPLES OF GOOD DESIGNS*)
1. A GOOD PRODUCT DISPLAY DESIGN IS INNOVATIVE, I.E

PRESENTING SOMETHING NEW (NOT MERELY

DUPLICATING) 2. A GOOD DESIGN OF PRODUCT DISPLAY ENHANCES THE

USEFULNESS OF THE PRODUCT

3. A GOOD DESIGH OF PRODUCT DISPLAY IS AESTHETICALLY CONCEIVED

Source: Adapted from Brauns Mission Statement as quoted by Bruce & Jevnaker, Management of Design Alliances, Sustaining Competitive Advantage, Wiley, 1998 . (The two statements within brackets are the writers addition)

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TEN PRINCIPLES FOR THE DESIGN OF PRODUCT DISPLAY (BRAUNS TEN PRINCIPLES OF GOOD DESIGNS*) - Continued
4. A GOOD PRODUCT DISPLAY DESIGN DISPLAYS THE LOGICAL STRUCTURE OF THE PRODUCT. DISPLAY FOLLOWS FUNCTION .(Example : Tooth paste tube) 5. A GOOD PRODUCT DISPLAY DESIGN IS UNOBTRUSIVE 6. A GOOD PRODUCT DISPLAY DESIGN IS HONEST

Source: Adapted from Brauns Mission Statement as quoted by Bruce & Jevnaker, Management of Design Alliances, Sustaining Competitive Advantage, Wiley, 1998 . (The two statements within brackets are the writers addition)

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TEN PRINCIPLES FOR THE DESIGN OF PRODUCT DISPLAY (BRAUNS TEN PRINCIPLES OF GOOD DESIGNS*) - Continued

7. A GOOD PRODUCT DISPLAY DESIGN IS ENDURING (WILL NEVER LOOK OLD/OUTDATED) 8. A GOOD PRODUCT DISPLAY DESIGN IS CONSISTENT TO THE SMALLEST DETAILS

Source: Adapted from Brauns Mission Statement as quoted by Bruce & Jevnaker, Management of Design Alliances, Sustaining Competitive Advantage, Wiley, 1998 . (The two statements within brackets are the writers addition)

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TEN PRINCIPLES FOR THE DESIGN OF PRODUCT DISPLAY (BRAUNS TEN PRINCIPLES OF GOOD DESIGNS*) - Continued

9. A GOOD PRODUCT DISPLAY DESIGN IS ECOLOGICALLY CONSCIOUS 10. A GOOD PRODUCT DISPLAY DESIGN IS OF MINIMALIST DESIGN

Source: Adapted from Brauns Mission Statement as quoted by Bruce & Jevnaker, Management of Design Alliances, Sustaining Competitive Advantage, Wiley, 1998 . (The two statements within brackets are the writers addition)

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EXERCISE IN CREATING PRODUCT DESIGN: CHILD TOY LEATHER SHOES FEMALE MUSLIM CLOTHING

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CHILD TOY

Sumber: How to Choose Children Toys, 2005

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LEATHER SHOES

Sumber: How Shoes Are Made

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MUSLIM FEMALE CLOTHING

Sumber, Sinar Pembaruan, 2002

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References (1)
Capon, Noel and James M. Hulbert, Marketing Management in the 21st Century, Prentice Hall, 2001 Davidson, Hugh, Even More Offensive Marketing, Penguin Books, 1997 Hiam, Alexander and Charles D. Schewe, The Portable MBA in Marketing, John Wiley & Sons, Inc., 1992 Jabbar, Rahim, Approaches towards Segmentation, Targeting & Positioning, 2002, (unpublished) Business Week, 2001, The 100 Most Valuable Global Brands WIPO, Intellectual Property, A Power Tool for Economic Growth, 2002, internet edition, accessed 2nd August 2005 through: http://www.wipo/int/about_wipo/gen/wipo.dgo/wipo_pub_888/ html.
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References (2) Kennedy,Carol, Managing with the Gurus, Top level Guidance on 20 management techniques, Century Business Book, 1996 Cowley, Don, Ed. Understanding Brands, Kogan Page 1991 Aaker, David A. Managing Brand Equity The Free Press,1991 Temporal, Paul, Branding in Asia, 2001 Knapp, Duane E, The Brand Mindset, The Mc-Graw Hill Companies Inc., 2000 Upshaw, Lynn B., Building Brand Identity, John Wiley & Sons Inc., 1995. Arnold, David, The Handbook of Brand Management, Century Business, 1992. Woodruff, Robert & Gardial, Sarah F., Understanding Customer Values & Satisfaction, Blackwell Business, 2000.
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