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Unit 2: Product and Service Design

The reliability and the interpretation of the Product Lifecycle for analysis of product brands is a Notes
serious limitation of this instrument. However, it can be used for 'product forms' quite successfully.

Example: Product Form – Filter Cigarettes.
Product Brand – Classic Mild.
The Product Lifecycle concept is extremely useful. It shows how customers tend to be much
more knowledgeable about the product class as the lifecycle progresses; product performance
typically improves over the cycle and the relative differences in brands competing for the same
segment decline as successful ideas are copied. This leads to increased competition based on
price, image, service, durability, reliability, etc., which results in increased value to the consumer.

Simultaneously, with the technological changes in the lifecycle of the product, changes also take
place in the process. The changes are slow at first during the period that the product volumes
increase, but are maximized during the phase that the product reaches the maturity stage. In
other words, the growth stage of the process technology normally coincides with the maturity
stage of the product.
The growth stage of the technological process is between the lines AA and BB in Figure 2.2,
which coincides with the maturity stage of the product technology. Technology improvements
take place until such time that the process becomes so efficient that any marginal increase in the
parameters of the process would not provide the required returns. As improvements continue,
the investment in small improvements becomes so large that they are not economically justified.
This reflects the downturn in the process technology curve.

The fact that the rates of technological innovation affect the competitive conditions of an industry
means that management should plan different strategies for different phases of the technology
lifecycle.

Example: It is suggested that in times of changing technology, management should use
the technology lifecycle model to arrive at decisions regarding the technologies, new products,
etc., that it requires for its future growth and survival.
A general strategy of phasing new products in and phasing old products out sustains the existing
process capacity.

2.4 Product Design and Development

Without products, there would be no customers. Without customers, there would be no revenue.
Developing a new product is a major activity. Thomas Alva Edison, with as many as 1,300
inventions and 1,100 patents to his credit, said about the product development process, "Genius
is 1 per cent inspiration and 99 per cent perspiration." Product development requires more of
perspiration and less of genius to be successful. Leaders today still use four key components of
Edison's product development model:
1. Lofty Goals: For example, the ability of the bulb to stay lit for long periods of time.

2. Right to Left Process: Start with customers and move backward through operations to
design.
3. Structure: Have 'clear targets' instead of daydreaming and aimless experimentation.

4. Fluidity: Be driven by talent, not hierarchy.

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