Quality Function Deployment

Originated in 1972 at Mitsubishi's Kobe shipyard and used widely across the world, this technique has reduced design time by 40% and design costs by 60% (Hauser and Clausing, HBR, 1988). The Quality Function Deployment helps cross-functional teams communicate and is especially useful in large organizations with complex, multi-featured products.
The best-known part of this process evolves around teh House of Quality - a diagram linking customer needs and engineering characteristics. Oftentimes the judgment of the impact of product features on perceptions is influenced by conjoint studies.
You can read more about QFD at

http://www.qfdcapture.com/

The Australian School of management also has a tutorial on the topic for those who really want to get the hang of it.

Gibson Guitars: Great design NPD

Example of great design, translating needs into features: Gibson Guitars and the Gibson Les Paul

For the past 50 years, Gibson Guitars has co-dominated the high-end guitar market (along with Fender and its famous Stratocaster). Integral to this dynasty has been its variations on the Gibson Les Paul model, a guitar that has existed largely unchanged for decades. Gibson’s strategy of solidifying the Les Paul as a traditional icon and aspirational purchase, while making minor modifications and then launching new models, has kept it at the forefront of the international music scene—cementing profits though charging thousands of dollars for each instrument, which typically costs less than $400 to make.

How can a product reign for 50 years in essentially the same form (see Exhibits 1 and 2 for comparisons of seemingly-identical 1958 and 2008 Gibson Les Pauls)? Gibson has realized that, in order to retain its enviable position, it must preserve the emotional and personal identification that people have with the famous 1950’s form. However, to stay modern and avoid becoming “stale,” it must update that model enough to create buzz around new product launches. Gibson has accomplished both with a series of new product lines and technological improvements that allow it to reach out to new customers while utilizing its earned brand recognition that has made the Les Paul a status symbol.

Exhibit 1: late 1950’s Gibson Les Paul

Exhibit 2: Current Les Paul Standard

Over the years, Gibson has taken at least two clear steps to diversifying its product line to appeal to more customers. First, it began manufacturing the Epiphone line (Exhibit 3), an Asian-made guitar with a smaller price tag ($400-900 instead of $3,000+), which contains essentially the same components and design as the American original. By doing so, it has invited price-conscious consumers to taste a bit of the Gibson value, while also enticing them to “aspire” to trade up for the pricier real thing. Second, it has a long history of making signature models for famous guitarists that span musical genres from country to heavy metal. In this way, it has been established as the ideal guitar for an almost seemingly-impossible range of music. Additionally, it has done so by making extremely small changes to its original form (see Exhibit 4 for one very popular design), which both reduces costs and reinforces brand identification while permitting a huge number of different products geared for separate audiences.

Exhibit 3: The Epiphone Les Paul

Exhibit 4: The Zakk Wilde Signature LP

While Gibson’s electronics suppliers have incrementally changed pickups, wiring, and capacitors over the years, the technological improvements in these instruments have been mostly marginal. In fact, many

guitarists dislike the changes in these features and pressure Gibson to return to the components used in the 1950’s versions. However, in recent years, Gibson has made considerable waves in the guitar world with two key innovations (both present in the “Robot” guitar, Exhibit 5). First, based on the neck-scale, Gibson’s are notorious for going out of tune easily (particularly the G-string). Gibson, recognizing this shortcoming, developed an automatic tuner technology that senses when the tension in the string has gone awry and mechanically corrects it. This design, which does not affect the form very noticeably, directly addresses one of the long-standing complaints from Gibson owners. Second, many guitarists own several guitars in order to benefit from the unique sounds that each wood-pickup-electronics arrangement offers. Gibson, in an attempt to appeal to all guitarists regardless of sound preferences, has included complex electronics in a new line of Les Paul that alters the guitar’s signal and models the sound of a large range of instruments (again, at the touch of a knob that does not affect the guitar’s appearance).

Exhibit 5: The Robot Les Paul

With its multi-pronged strategy of adhering to its traditional, time-honored roots while creating new versions and new technologies for customers it might not otherwise satisfy, Gibson has managed to maintain its profitable foothold on the electric guitar market for half a century.

Stephen Klein

New Product Development T/Th 10-11:30am

High Tech Tools for Observational Research

Check out this article on Fast Company for some high tech tools that help quickly and discreetly capture consumers' behavior

People's Design Award

Check it out: People's Design Award

Many products including the Kindle and D.Light are featured.

I would vote for the Elektric Bike.

Description

"The CMYK ELEKTRIC is a folding electric bicycle for short commutes.

This electric bike has the ability to make people smile and enjoy life while helping in the quest for a greener world.

The aim of the product is to complement public transportation in order to reduce the amount of cars on the streets. Everyone can enjoy the emotion of riding a bike while its reduced size, ease of transportation and storage are convenient benefits for the urban dweller."

The product positioning is really interesting as it seems to fill a need in alternative transportation. I could imagine myself using this product in combination with public transportation and then conveniently storing it in the trunk of the car.

Check it out: People's Design Award. What would you vote for?

Product Development for the Bottom of the Pyramid

Here's an interesting article about product development for the poor in India. Some of the illustrative examples are really neat (cleaner and cheaper stoves, adapted refridgerators) and the article goes into the opportunity to reach many, many customers (many of the products have already sold millions of units) and how tapping this market may spur product designs for other markets (lead user?).

I found it very inspiring.

http://online.wsj.com/article/SB125598988906795035.html

Best,

Raj

Excerpt from the article (reading the article requires a WSJ online account):

"India's many engineers, whose best-known role is to help Western companies expand or cut costs, are now turning their attention to the purchasing potential of the nation's own 1.1-billion population...

A start-up company, First Energy, which was launched with the help of BP PLC, had to reinvent the wood-burning stove to come up with a product that had the convenience and the price to crack the same market. Hoping to help village women who spend hours a day looking for wood and keeping a fire going to cook for their families, the Pune-based company adopted the gasifier technology used in power plants to make a stove that would burn more efficiently and with less smoke. Engineers from the Indian Institute of Science in Bangalore designed a stove with a perforated chamber that uses a small fan to get just the right amount of air to keep a fire burning at a high temperature, meaning less smoke and quicker cooking. It has sold around 400,000 of the $23 stoves across India.

"A lot of innovation has gone into the stove as well as the fuel," which is dry pellets made of agricultural waste like corn husks and peanut shells, says Mahesh Yagnaraman, head of First Energy. "This is not a gizmo like a cellphone. But it is definitely a life-changing product because the houses will not be smoky."

To bring banking services to villages, Anurag Gupta, a telecommunications entrepreneur, distilled a bank branch down to a smartphone and a fingerprint scanner. A bank representative goes directly to a village and can set up shop anywhere there is shade. Savers line up and give an identification number, scan their fingers and then deposit or withdraw small amounts of rupees. The transactions are recorded through the phone and the representative later visits a standard branch to pick up or drop off rupees as needed."

(Eric Bellman, WSJ Oct. 21, 2009)

Conjoint Analysis Techniques (from Sawtooth)

CBC (Choice-Based Conjoint)
· Consumers choose sets of attributes (in the form of a complete product), rather than individually rating desired attributes
· Price can be included as an attribute to make conclusions about the demand for individual attributes
· Software packages can dynamically create “products” by combining attributes so that the marketer doesn’t have to
· Mathematical analysis can identify desirable attributes and market segments with different preferences
ACBC (Adaptive Choice)
· Asks a few simple questions first and then uses those to create a new “decision set” of products; then continues with regular CBC
· Works better with large numbers of attributes
· Works better with small sample sizes (of survey-takers)
· Model better reflects consumer decision-making process (creation of a decision set first, then decide on attribute-combinations)
ACA (Adaptive Conjoint Analysis)
· Similar to ACBC, but the software “learning” process occurs continuously
· Uses regular CBC questions to “learn” consumer’s preference and then hones in on certain value-areas like ACBC does
· Simple for the marketer to set up
CVA (Traditional Full-Profile Conjoint)
· Similar to CBC, but doesn’t combine complete sets of attributes every time (might only choose to combine six (varying) attributes, even though you’ve specified 12)
· Better for smaller sample sizes
· Not as good if you’re interested in interaction effects between attributes
· As CBC, can calculate part-worths of attributes

Project Progress and Positioning Update: Skiing Locator

Cua, Evans, Kiepfer, Peltier, Vigrass, Zhou

Process Screening and Concept Evaluation
Our initial category was temporary workspaces. However, we struggled to find concrete unmet needs where we could agree on a solution. Of the few solutions that we were excited about (one of which was a laptop screen with better in-sunlight performance), the barriers to their adoption were more due to technological viability than an unaddressed need. Finally, for the table idea we presented in class, there was a disconnect between the end-user and the customer which we were unable to resolve.

We physically met and brainstormed new categories, and one of them bubbled to the top: how to find friends where there is no clear or good cell phone reception. We had all experienced this need at one point or another and the market had no obvious solutions. We decided that this unmet need was a prime target for our project. To further our initial idea into product concepts, we played an email game of ping pong, which was effective since we were in different places and could respond asynchronously to everyone else’s ideas (Screenshots in Exhibit 1). It was here, along with our brainstorming session in class, that we formed some great leads toward viable product ideas.

Needs identification
Problem identification: “How can I find my friends on the ski slopes after I lose them skiing?”

The underlying needs expressed in this problem span multiple levels of Maslow’s hierarchy:
· Safety needs: Skiing in a group is safer than being alone on the mountain
· Belonging needs: I feel a sense of belonging and acceptance with my group of friends on the slopes
· Esteem needs: I gain respect from others, self-respect and confidence when skiing with my friends

Ethnographic research interviews we conducted indicate that this need is not sufficiently met by current products
· “My cell phone doesn’t always work on the slopes so I don’t get people’s text messages on time”
· “I hate taking off my gloves on the chairlift to text someone – my fingers get so cold!”
· “I can’t even see the screen on my iPhone in the sunlight”
· “My battery dies really quickly in the cold”

We also conducted limited observational research; we observed that about 30% of people entering a bar spent a great deal of time looking for their friends/group.

Market analysis and identification
· Primary (and initial) market: Social skiers and snowboarders in the US. Both specialty retail and rental channels.
· Secondary markets: people who want to find each other in other cell phone-unfriendly situations (e.g. bars, clubs, festivals/outdoor events, hiking, airport, international destinations)
· Tertiary markets (not person-to-person but person-to-object): lost handbags, lost keys, find car in parking lot, etc.

Upon launch our primary target market is the avid social skier. We identified the need to be the strongest in this market and social skiers are used to purchasing equipment to find each other (walkie-talkies).

According to the Kottke National End of Season Survey, in 2009, the total number of skier visits in the US ski industry was 57.4 million, down slightly from 60.5 million in 2008[1]. In addition, the SIA Retail Audit report estimates the US market for ski/snow apparel and equipment was estimated at $1.7 billion (35% for apparel, 31% for equipment, and 34% for accessories)[2]. In a separate report, IBISWorld estimates total industry revenue in 2009 at $2.5 billion[3]. Half of the $2.5 billion was allocated to the use of recreational facilities while approximately 5.6% is allocated to rental and leasing of goods and equipment[4]. We are eager to grow the $530 million skiing equipment market with our new product.

Our preliminary market research is presented in Exhibit 2. Further research is required to determine the size of our specific market: the number of social skiers in the US (estimated at 20 million people). Further research will also go toward finding revenue figures for the most comparable market: walkie-talkies.

The Product
The product will be a small device that will indicate the distance to and direction of your friends. It will require your friends to also carry the device in order for your device to be able to locate them.

The need for this product is easily identifiable and current. It will be less functional than walkie-talkies and cell phones in terms of real-time communication. We anticipate being able to sell the product for a relatively low price point. Therefore we anticipate that this product will be disruptive to the mobile communications market.

Positioning statement: [Product Z] is the ideal accessory for avid social skiers because it helps you find your friends when cell phone service is questionable and walkie-talkies don’t suffice.
[1] Kottke National End of Season Survey (National Ski Areas Association, 2009).
[2] SIA Retail Audit, 2009.
[3] “Ski Resorts in the US,” IbisWorld 31 Dec. 2008.
[4] “Ski Resorts in the US,” IbisWorld 31 Dec. 2008.

There is no such thing as a perfect product...but you can hedge your bet

While it’s a pretty obvious fact, it’s still something that any manager can (and often does) forget – and the results can be like quicksand for the company, turning your lean start-up into a lumbering beast.


Click to Read "Delusion of the Perfect Product"

'Sky-Helmet' by VeloDrama Team

Positioning Statement: Bicycle Communications Device

Our product, a wireless communication device for bikers traveling together, is the best biking accessory for casual bikers that seek to improve their coordination with fellow bikers will riding and decrease the likelihood of biking accidents occurring. Our marketing strategy will primarily consist of working through retailers and bike stores to increase penetration of our product within the amateur and enthusiast biker segments. We believe a real market need exists for improved communications between bikers and consumers will buy readily available, moderately priced products that solve this need. We plan on coupling the product with helmets and selling the product through specialty bike stores and mass-market retailers.

Through primary research, we’ve observed that many bikers ride in pairs. These couples include friends, couples, parents with young children, and kids. We observed that bikers frequently attempt to converse with each other while riding. Most bikers do not ride next to each other in order to prevent collisions. Instead, they typically ride with a distance of 10 to 30 feet between them. We observed on numerous occasions that riders were yelling at each other and neither rider was able to hear the other one. We also found that bikers typically took their eyes off the road and turned their bodies in order to project their voices over the noise of nearby cars. This is clearly dangerous as accidents and collisions have a higher likelihood of happening when this sort of behavior occurs. Our observations led us to conclude that a clear need exists for a device that helps bikers communicate with each other while also maintaining their focus on riding. Furthermore, many parents take their children on bike rides during the weekend. Through our observations, and personal interviews, we unearthed a need for parents to be able to provide advanced warning to their children of dangers, such as oncoming vehicles, while maintaining a safe riding distance. The wireless communication helmet will create a safety net allowing parents to more comfortably, and safely, ride with their children, thus fulfilling an emotional need for connectivity.

The bicycle helmet market is a large, slow growing market that is quite fragmented. We estimate that the bicycle helmet market is around $200 million in sales annually in the United States. The market is slow growing – increases in units sold are offset by decreasing retail prices due to both economies of scale and retailers applying pressure to manufacturers. No competitive offerings currently exist in the market that addresses the market need that we are going after. A few patents have been filed around the area of biker communication, but products have not been introduced to the masses that truly leverage short wave radio technology. Additionally, we visited both large retailers and specialty bike stores and found no products that were similar to our offering.

Helmets are primarily sold in the United States through mass-market retailers (Walmart, Target, Toys-R-Us) and specialty bike stores. Manufacturers range from large corporations that produce products in numerous bicycle accessory categories (Bell Sports, Schwinn) to specialty manufacturers that sell specialized helmets for professional cyclists. Our strategy will be to sell one version of the product that is bundled with the helmet and sold through mass-market retailers. We also plan on selling a standalone version of the product in specialty bike stores. We know that we can quickly gain market share and gain shelf space at large retailers by partnering up with Schwinn and Bell Sports. We can leverage their marketing expertise and existing relationships and follow a high volume low margin strategy. For the specialty stores, we plan on pricing at a higher point than we would for the mass- market retailers. We plan on educating salespeople on the benefits of the product and hoping that they will eventually evangelize the product for prospective customers.

Bhandari, Raj
Dash, Somesh
Desai, Arpit
Frick, Jonathan
Mahajan, Tarun
Vance, Austin