Category: Product Development

Organizations today are constantly facing increasing global competition in the marketplace that demands more frequent innovation of goods and services that are of a high quality. The challenge such organizations face is to be more customer focused, responsive to their needs and provide goods and services that are cost effective.

This can be achieved by value delivery and creation where value delivery entails order fulfilment by ensuring the flow of materials, products and services through production and distribution while value creation entails new product or service development activities that identify the customer’s needs in the form of new products or services (Handfield, et al. 2000).

The new product development process is a series of interdependent and often overlapping stages during which a new product or service is brought from the idea generation stage, business or technical assessment, product or service conceptualization, product engineering and design, to the readiness stage for production or manufacturing.

As the product or service concept moves through these various stages, the idea is refined and evaluated for business and technical feasibility where the design is fine tuned and prototypes are developed for testing. The design is then finalized and preparations are made for the full scale production of the product or service (Handfield et al, 2000).

The new service development process which is derived from new product development is mostly concerned with the development and marketing of services instead of goods. A service is an act carried out to a customer that is intangible, inseparable and heterogeneous (Luteberget, 2005).

Customer Involvement in New Product/Service Development

Customer involvement in the product or service development process is the interaction or collaboration between the users of the product or service and the employees of a company during the period of product development to actualize it into a commercial product. The customer’s involvement in the development process entails an active engagement in the process with the developing company (Pinegar, 2000).

As Pinegar (2000) states, the customers role in the product or service development process is viewed in terms of their expressed wants and desires, the satisfaction that the good or service offered to them, their relationship with the developing organization and their response to previous product and/or service innovations. The customer is seen to be critical in the product or service development process because he/she is viewed as an integral component in the business strategies of an organization.

The role of customers in new product development has recently been the subject of discussion and study by researchers in the product development field. According to Pinegar (2000) the role of a customer can be classified into four categories which are coaching, partnering, reporting and advising. These classifications are used to explain the user involvement in the different stages of the product or service process.

Coaching involves the identification of product problems and opportunities in the market place and generating ideas that will be used in the product development process by conducting customer surveys to find out whether the current products meet the changing needs of consumers.

The partnering category involves the evaluation and analysis of alternative methods of product implementation while exploring the possible applications of the product other than those it was designed for. A business analysis is conducted where the customer partners with employees of the company to see whether the product or service will be viable in the market place.

The analysis of new innovation ideas will involve methods such as attribute analysis which has three approaches that can be used in generating new product or service ideas. The determinant gap analysis approach entails considering the attributes of the marketplace in determining which product or service innovation a company should undertake. These attributes can be the competitor’s products/services or previous products and services the company has produced (Anandan, 2009).

Perceptual gap analysis is used to analyze ideas when the attributes of the products or services in the marketplace are unknown. The similarity and dissimilarity analysis involves the evaluation of previous products/services by analyzing their similarity or dissimilarity to each other based on product/service attributes. Similarity analysis evaluates products on the same set of attributes while dissimilarity analysis focuses on the different attributes of the product/service (Anandan, 2009).

After the idea has passed through the business analysis stage successfully, the next step will involve the actual development of the product and prototype testing. During this stage the idea is translated into more concrete and tangible terms with regards to a product while for a service it is translated into a doable act.

This stage involves the consideration of customer satisfaction and technical feasibility by analyzing customer surveys and researching of the market to find out whether the product is satisfying their needs (Avlonitis and Papastathopoulou, 2006).

The advice category involves the use of product development specialists to identify product or service problems and opportunities by monitoring the trends in the market place and also the activities of their competitors. This stage is useful in the idea generation stage and also in the product testing stage of the product/service development. The product is tested in-house by the design team, a process known as alpha testing or by providing a sample to the intended market users a process referred to as Beta testing.

The alpha and beta testing methods are mostly used by developers of computer software who provide beta versions of their software for testing to computer experts. Gillette Company is well known for its ability to successfully launch new products into the market and meet its consumer’s needs. This is largely due to their continued use of the alpha and beta testing methods (Avlonitis and Papastathopoulou, 2006).

Focus groups are also used in this stage to test product samples by looking at what other applications the product can be used for. The last phase is the product launching phase into the market. During this stage, company finalizes and implements the production or service operations plan and also the marketing plan.

The customer’s involvement in this stage will be to purchase, use and provide feedback about the product. The reporting category is useful to the company as it enables the users of the product or service to provide feedback on the tests conducted on the new innovation by carrying out customer surveys, market research and customer visits (Pinegar, 2000).

Managing Customer Involvement in the Product Design Process

The early stages of the product design process are sometimes characterised by uncertainty when it comes to identifying product concepts that will lead to the development of a successful product that will be acceptable by the market.

Poor management of customer involvement knowledge in these early stages might lead to problems involving customer acceptance and product design in the final stages of the development process which might prove to be expensive to reverse. Because customers are the final stakeholders of the product, involving customers during the first stages of the development process will reduce uncertainty that is usually associated the process (Bogue and Sorenson, 2006).

In order to manage customer involvement effectively and efficiently, Bogue and Sorenson note that market orientation should be considered by companies that are pursuing new product innovations. Companies that have market orientation are viewed to be more proficient in gathering and analyzing information collected from consumers in the market. Customers are viewed by these market oriented organizations to be significant designers because they make important contributions to the product design.

Market oriented companies are expected to have a clear understanding of the needs of the customer which will allow them to manage the customer’s involvement and the knowledge they provide in developing the product which will in turn enable them to develop products or commodities that are of a superior quality to meet the customers needs resulting in a positive influence on the innovation activities of the company.

Customer involvement management can be done by carrying out facilitation in the concept development stage by using techniques such as focus groups, sensory analysis and conjoint analysis methods. These market oriented techniques can help the company to determine the feasibility of the product design and its acceptance to the market (Bogue and Sorenson, 2006).

User-led innovations

The user led innovation concept was developed by Von Hippel in 1986; He defined the concept of lead users as people who had strong needs that would become prominent in the marketplace in the future. According to Hippel, lead users were viewed to be ahead when it came to trends in the marketplace.

They often faced needs that could not be met by the available products or services, a situation which saw them filling this gap by modifying the available products to their own liking. This created the user led innovations which were common in the technology industry of software and information technology. User led innovations mostly relied on localized information that was already in the users possession (Burmann and Arnhold, 2008).

Von Hippel described the process of user led innovations as involving the first stage where the users innovate the product. After innovation, they would join communities that were driven by the common need of collective innovation after which the user manufacturers would implement the idea using low cost capital production techniques.

The innovations made by the users served the purpose of not only creating new product concepts that would be used in forecasting the needs of the current market but they would also be used by companies to commercialise the innovations into products that would be acceptable and usable to a large mass of consumers.

To enhance the commercialization process, the manufacturer of the product would look for lead users, evaluate their innovations and then incorporate the users into the development process of new products (Burmann and Arnhold, 2008).

Hippel’s user led innovation concept has recently undergone some modifications by researchers such as Berthon, Pitt and McCarthy who introduced the concept of creative consumers to further explain lead users. They defined creative consumers as individuals or groups of people who adapted, modified and transformed a product concept to meet their individual needs.

Research on New Product/ Service Development

Understanding the customer’s preference is a basic part of any product development system. The traditional product development process incorporated the use of tools such as market data, focus groups and surveys to collect important information about market trends and the customer’s perceptions of the company’s goods and/or services. Recent research on new product development has provided some valuable insights into the relationship between the user’s involvement in product development and their satisfaction.

Gruner and Homburg in their 2000 research based their findings on the German machine industry by studying the relationship between the intensity of the customer’s involvement during the different stages of product development, the characteristics portrayed by the involved customers and the success of the product their discoveries indicated that the involvement of the customer through certain phases of the process had a good impact on the products success.

Their empirical studies showed that the customer’s involvement in the early stages of the development process gave a higher success rate than when they were involved in the mid and last stages of the product development process which yielded a lower success rate. This shows that when the users were involved in the idea generation stage, there was a higher chance the product innovation was going to be successful in the market than when the consumer was involved in the testing stage (Gruner and Homburg, 2000).

Alam (2002) conducted research on how a customer’s involvement contributes in the new service development process by concentrating in the B2B industry.

He divided his work into four research areas which were; the objective or purpose of involving the customer, the stages of involvement, intensity of the involvement and the mode of involvement. The results of his study showed that there was only one purpose of involving users in service development which was to achieve the successful development of a service that achieved the desired purpose of the customer.

According to Alam’s research, customers are involved in all the stages of the product or service development process but where there involvement was most important was in the idea generation stage, the product or service design stage and the product testing or pilot rum stage.

The intensity of the user was divided into four levels one of them being the passive acquisition of input where the users took the initiative to provide input in the developing of the product or service. The second level involved the providing of feedback on specific issues where the developers of the product approached service users to obtain information on specific issues at the various stages of the development process.

The third level involved extensive consultation with the users or customers where the service or product developers invited the users to share their knowledge about what they want in the new product and also provide their own inputs into the process. The final stage involved the incorporation of customers into the development team to see how the product will be developed and whether it has met the specifications and desires of the design team and the user (Alam, 2002).

Examples of New Product/ Service Development in Companies: Volvo and Skype

Skype, the global free telephony Company that is rapidly expanding in its operations around the world involves customers in its new service development process. In Skype’s service development, customers are allowed to co-produce the directory by downloading Skype software and then registering as users of the software.

The customers can then expand the directory by recommending Skype to their colleagues, family and friends. As their friends register, they can also download the same software and expand their directories in the same way.

Skype does not need any mainframes since it incorporates the unused capacity in its registered users. This means that it is the users who facilitate the creation of value in Skype’s services by sharing and developing in Skype’s services. The customers also have the opportunity to run the help desk (Edvardsson, et al. 2006)

In its product and service development process, Volvo uses the program Concept Lab Volvo to inform its customers and users of its products and services about its design principles and also about emerging car design concepts. The users are allowed to provide feedback on these car designs and they can also have one on one chat sessions with the developers and design team. The developers use this information in their ongoing design work.

Volvo also uses target groups in its idea sourcing stage where people in trend sensitive markets and areas with a high design capability are invited to design parts or components of the whole car. An example of this target group is the Your Concept Car which was designed by eight women (Edvardsson et al, 2006).

Success and Failure of New Product Development

Sampson (as cited by Luterberget, 2005) in his 1970 studies described a new product or service to be successful by looking at whether it has satisfied the needs, wants or desires of customers. He also described a successful new product as possessing outstanding performance when compared to other products that were designed for the same purpose.

Products which undergo minor or major changes might fail to meet the classification of successful new product innovations. A major source of successful competitive advantage for organizations in the future will be the consistent and successful development of new and modified products and services. However the product life cycles are reducing as the product variety increases because of niche market penetration.

In the case of a group of consumer products introduced in the 1920s, the average time from the introduction to the peak production of the product was approximated to be 28 years. For a group of similar products introduced in the 1960s-70s the approximate time for peak production was estimated to reduce to 10 years. This trend is seen to continue and will pose a threat to the product development process (Barclay, et al. 2000).

In a 1987 case study of 149 UK engineering based companies, surveys conducted found that the average product life cycle was 12 years and the average development of a new product was 22 months. The same surveys were conducted again in 1996 and they showed that the product life cycle had now become eight years while the development of a new product would now take 15 months.

Such estimations show that the number of new products introduced into the market in the next five years would be twice that of the last five years (Barclay et al, 2000). When research evidence on the success and failure of product or service development is examined, the failure rates have remained at 30% for the last 60 years. This evidence shows that companies are not improving in their product development activities and that they are also becoming more expert and critical in the approaches to new product or service development.

An example of a product design that failed in the past is the Premier Safe Cigarette which was seen to be one of the biggest design failures of all time. The basic idea behind this cigarette was to have an inner cardboard tube with holes along its length which would hold the tobacco.

At the end of the tube was some charcoal which when lit released nicotine. The nicotine passed through the holes in the tube which reduced the chances of smoke and tar. After seven years of development, test marketing was conducted which showed that the cigarette was difficult to light and it had a terrible taste.

The failure of the cigarette cost the developing company, RJR Nabisco $500 million, a result which was partly attributed to the break up of the company. A service design that failed in the recent past was the Internet University (UkeU) which was launched in September 2003.

The program was abandoned after 900 of the expected 5,600 students enrolled for courses that cost £44,000. The failure was due to that fact no previous market research had been conducted to determine if there was any demand for e-learning. The losses incurred amounted to £50 million (Hollins and Shinkins, 2006, p.131-132).

Conclusion and Recommendation

The ability to produce a steady flow of successful new products or services consistently is one of the key factors that lead to an organizations success. The role of a customer in product and service development is a fairly new concept that is yet to fully catch on with most companies when it comes to developing new innovations.

However the general feeling about incorporating the user’s views while developing the products/services is optimistic and good. Researchers have also shown involving customers in the development process increases the success of the goods or services in the market in terms of launching and sales.

Customer involvement will also lead to improved quality in company products or services with customer value being taken into consideration. The performance of the product in the market can also be monitored by looking at how involved the customer was in the development process. Organizations should therefore view customer involvement in the development process as vital since the success or failure of a product or service will depend on whether it meets the needs and desires of its target market.

Companies should ensure there is user involvement in their new innovations as this ensures that the needs in the target market have been met, satisfied and incorporated into the new product or service. Companies should also have a clear view of what they want to achieve by customer involvement in their product and service innovations.

References

Alam, I. (2002) An exploratory investigation of user involvement in new service development. Journal of Academy of Marketing Science, Vol.30 p.250-261.

Anandan, C. (2009) Product management. 2^nd Edition. New Delhi : Tata McGraw-Hill.

Avlonitis, G.J. and Papastathopoulou, P. (2006) Product and services management. London: Sage Publications

Barclay, I., Dann, Z. and Holroyd, P. (2000) New product development: a practical workbook for improving performance. Great Britain: Reed Educational and Professional Publishing Ltd

Bogue, J., and Sorenson, D. (2006) Managing customer knowledge during the concept development stage of the new food product development process: Department of Food Business and Development. Ireland: University College Cork

Burmann, C., and Arnhold, U. (2008) User generated branding: state of the art research. Berlin, Germany: Transaction Publishers

Edvardsson, Gustafsson, Kristensson and Magnusson (Eds) (2006) Involving customers in new service development. London: Imperial College Press

Gruner, K.E and Homburg, C. (2000) Does Customer Interaction Enhance new product success. Journal of Business Research, Vol 49, p.1-14.

Handfield, R.B., Monczka, R.M., Ragatz, G.L. and Frayer, D.J. (2000) New product development; strategies for supplier integration. Milwaukee, US: American Society for Quality press

Hollins, B., and Shinkins, S. (2006) Managing service operations: design and implementation. London: SAGE Publications Ltd. Pp. 131- 132

Luteberget, A. (2005) Customer involvement in new service development: how does customer involvement enhance new service success? Master’s Thesis in Information and Communication Technology. Agder University College: Faculty of Engineering and Science, Vol (2) 12-16

Pinegar, J.S. (2000) Customer involvement in industrial product development: creating superior products. Power point presentation [online]. Web.

Literature Review

Literature review will be conducted for the purposes of providing theoretical knowledge and general insight on the research problem. The general overview from the literature review will help in defining the concept of product development.

Additionally, existing arguments on the topic from different authors within existing literature will be considered for the purposes of forming theoretical framework necessary for addressing the identified research problem (Pride and Ferrell, 2003).

The foundation of the study will be formed based on new product development processes and related requirements. Interrelationship between the product and other organizational functions together with anticipated shortcomings also form the foundation of the study.

According to Jassawala and Sachittal (2000), development of new product follows a systematic process capable of creating and producing highest possible satisfactory results within the targeted market. The whole processes involve lowest possible risks and highest possible benefits to organization (Rainey, 2005).

However, most crucial elements within the process include the participants. New product development processes are never the same since some companies do not follow the deliberate step-by-step approach (Lee et al., 2000).

The process on product development and implementation follows five successive stages; idea generation, feasibility, definition and design, development and testing then Market entry and review stages (Martins et al., 1996).

New ideas are usually obtained from the market field through customers, employees and information from other competitors within the market using same line of technology (Martins et al., 1996).

Research and development team together with other departments involved enter into detailed coordination for the purposes of expanding the idea. This is followed by drafting of concept paper by the manager. The paper highlights product description, benefits and target consumers within the market (Rainey, 2005; Swink, 2000).

Desk Research

The research will utilize secondary sources for the purposes of obtaining relevant up-to-date information. The desk research will be used to obtain required information on other related product trends within the market. Such statistics will provide useful information based on the real market situation.

The research proposal will incorporate various stages including scrutinizing of the available sources for the purposes of obtaining required information (Kumar et al., 2002).

Problem Statement

There has been growing trend on the use soft drinks as means of boosting energy in process performing hard tasks. However, reliable sources have indicated possible dangers surrounding frequency of use of such drinks.

This is attributed to health related issues and therefore calling for the need to introduce into the market healthy natural energy drink free from sugary content (Fisher,1997).

Research question

What is the overall effect of development process of “Natural” energy drink to the organization’s performance?

Objectives

The main objective will be examination of the effect of new product development processes to the Organization’s performance and general attitude towards the use of ‘Natures’ energy drink within the market environment.

1. To examine possibility of using ‘Natures’ within domestic settings
2. To find out overall consumer attitude towards “Natures’ energy drink and other related brands
3. To identify possible promotional platforms which can be utilized during launching period

Methodology

Qualitative Research

The stated objectives will be analyzed in depth through use of detailed qualitative information. This research will ultimately focus on the process of identifying possible consumer reactions towards the new product.

Within the same process quantitative research will be applied for the purposes of establishing the nature of impact consumer reaction and attitude has on the new brand (Wegner, 2000).

Qualitative research will seek to answer questions focusing on conditions under which the product is used and places where the product is might be used. Qualitative research will be used for the purposes of providing detailed description of the product in question (Strauss and Corbin, 1990).

Rationale for using in-depth interviews

In this research in-depth interviews will be used as a means of gaining consumer perspective from the dimensions of interaction within the market. Generally, an open-ended in-depth interview provides the required flexibility based on the respondent’s neutrality and sensitivity.

The structure encourages open conversations enabling collection of primary data based on detailed information from interviewees.

In-depth interviews will be utilized for the purposes of allowing deep understanding of the phenomenon based on physical and social settings within the target market (Griffin, 1997). Additionally, the method will allow understanding of norms, effects and values attached on the line of product from participant’s point of view.

In-depth interviews will be conducted the first two weeks of June, during which code names will be used to avoid the possibilities of victimizing respondents based on information given. (Strauss and Corbin, 1990). Interviews will be conducted after signing of the consent form by the willing respondents.

Population

The population in this study will be used to refer to the aggregate of all elements within the area of study. Within this study, the population will comprise of all stakeholders related to the new product and found within marketing and product development function.

This will also include some of the important departments within the business organization involved in the manufacture of the product.

Population Sampling

The method of random will be extensively utilized in this research. This is since this method grants equal opportunity for participation and covers significant area of targeted population. Everybody within the market environment will be granted equal opportunity to fully participate within the study (Malhotra, 1996).

Coding will be used for the purposes of ensuring relevance and validating the kind of data collected.

Approximately two hundred and fifty interviews will be conducted within selected consumer segments for the purposes of establishing differences for entire responses. Sample size will be determined through proportional sampling technique (Trott, 2008).

Table 1: The sample quotas will be set as follows

Questionnaire design

Design of appropriate questionnaire will ensure that correct research questions are applied as well as collection of relevant primary data applicable for statistical analysis.

Five-point Likert scale will be used for rating purposes since it provides respondents with options to indicate their level of agreement or disagreement against statements provided. Each statement will be assigned a numerical score ranging 1-5 of which the score will ultimately be summated.

Likert 5-point scale will comprise of scale from “strongly disagree” to “strongly agree”, “very low influence” to “very high influence”.

Procedure

All questionnaires will be approved by the manufacturing company. The questionnaire will include relevant questions touching all sections within the market and the organization at large. Pre-testing of initial questionnaire will be done using a group of ten respondents obtained from the same sample population.

This will be done for the purposes of making important adjustments to the designed questionnaire (Wilson, 2006).

Examples of questions that will be used; what is the anticipated rate of consumption of energy drinks within the market? Do consumers complain concerning current brands? In what areas are they specifically concerned?

Detailed information will be obtained based on open-ended interview process where questions will also be pre-coded.

At the same time code frames will be utilized within the range of first ten percent, this will be based on nature of responses (Malhotra and Birks, 2003).

The kind of implementation process adopted by the management will incorporate all the processes involved in the allocation of resources. Such ideas will be adopted for sole purpose of attracting consumers and at the same time provide for their desires.

In the process of such intense planning, solid strategies will be incorporated for the purposes of identifying consumer needs. Implementation of New Product Development Process involves processes of convincing the market based on research objectives.

All marketing strategies will be tested before being incorporated within the full process. This will ensures establishment of quality implementation process hence profitable outcome within the target market (Kotler, 1997).

Description on Company’s products reveals the necessity of paying attention to the value customers attach to products based on pricing technique used. The article is true in portraying the fact that management team always pay much attention on the manner in which the company utilizes resources.

Timeline for the Research proposal

References

Fisher, M. L. 1997, ‘What is the right supply chain for your product?’ Harvard Business Review, vol 75, no. 2, pp.105–116.

Griffin, A. 1997, ‘Modelling and measuring product development cycle times across industries, Journal of engineering and technology management, Vol. 1, No.14, pp.1-24.

Jassawala, R. & Sachittal, C 2000, ‘Cross functional dynamics in new product development,’ Research Technology Management, Vol.10, No. 43.

Kotler, P. 1997, “Marketing Management – Analysis, Planning, Implementation and Control,” 9^th edition, Prentice Hall, USA.

Kumar, V., Aaker, D. & Day, G. 2002, “Essentials of Marketing Research,” 2nd edition, Wiley c2002, New York.

Lee, J., Lee, J. & Sonder, W. 2000, ‘Differences of organizational characteristics in new product development: Cross cultural comparison of Korea and the US,’ Technovation, Vol.9, No. 20, p. 497.

Malhotra, K. & Birks, D. 2003, Marketing Research: An applied approach, 2nd European edition.

Malhotra, N. 1996, “Marketing Research: An applied orientation,” 2nd edition, Prentice Hall International, New Jersey.

Martins, J., Loubser, M. & Van Wyk, H. 1996, Marketing Research: A South African approach, Unisa Press, Pretoria.

Pride, W. & Ferrell, O. 2003, Marketing Concepts and Strategies,12th edition, Houghton Mifflin Company.

Rainey, D. 2005, Product Innovation. Leading change through integrated product development, Cambridge University Press.

Strauss, A. & Corbin, J. 1990, Basics of qualitative research: Grounded theory procedures and techniques, London.

Swink, M. 2000, ‘Technological innovativeness as a moderator of new product design integration and top management support’, Journal of Product Innovation Management, Vol. 3, No.17, p 208.

Trott, P. 2008, Innovation management and new product development, 4th edition, Prentice Hall.

Wegner, T. 2000, Quantitative methods for marketing decisions, Juta, Cape Town.

Wilson, A. 2006, Marketing research, an integrated approach, 2nd edition, Prentice Hall.

SWOT Analysis of the Product

The SWOT analysis encompasses the strengths, weaknesses, threats, and opportunities. SWOT analysis is critical in evaluating the strengths, weaknesses, opportunities, and threats of an organization from which informed decisions are made. The SWOT analysis for the proposed Smart Shopping Cart is discussed below.

Strengths

Being a new concept, the innovative nature of this product is a primary strength that may help it achieve massive success in the targeted market across the U.S. and beyond. The technological aspects of the Smart Shopping Cart will receive massive acceptance in the U.S. market because of its uniqueness and efficiency in shopping. This will help in improving its popularity in the market as more and more clients will quickly embrace the concept. The ability of the Smart Shopping Cart to meet the customer’s shopping demands by quickening the checkout time will help the company retailing this product to be successful in the U.S. market. Because the proposed Smart Shopping Cart integrates several technological applications, such as a scanner, smartphone charging port, and phone clip, it is predicted that customers will not only embrace the new idea but will internalize its usage as a new innovation to make their shopping experience easier and more convenient. In addition, the image of the Smart Shopping Cart, especially the strength of its brand as being a futuristic concept, will also help in promoting its acceptance. There is good scope for scalability of the product acceptance, which would enhance the brand image and market share. The product promises convenience and time management for shoppers.

Weaknesses

The main weakness that the product may face in the market is the inability to come up with applications or user manuals that are incorruptible by the competitors. In addition, since the Smart Shopping Cart will be a collection of several ideas that are already patented, the product might face legal battles with some of its fiercest competitors over breach of copyright. This is because most of the technology-based products have designs that can easily be copied by competitors. Moreover, some clients might face difficulty in using the Smart Shopping Cart, especially the barcode scanners. For instance, senior citizen shoppers might find the product too complex and intimidating. In addition, technological failures might render the product useless to a user.

Opportunities

Technology-based shopping support devices have been rapidly expanding over the years. Mobile phone usage in the supermarket has almost become a basic need both in the developed and developing economies. This means that the Smart Shopping Cart has a massive market that needs this product to facilitate usage. The rise in the population of the middle class in the U.S. has also offered an opportunity for the company retailing the Smart Shopping Cart. Specifically, the increasing number of shoppers across the U.S. will increase the demand for the Smart Shopping Cart, which promises to make the shopping experience convenient and save time. The emerging technologies have offered various opportunities to the Smart Shopping Cart product, especially in terms of potential multiple uses. Technology has improved the speed, efficiency, and effectiveness of the shopping experience.

Threats

The massive competition, especially from the potential arch-rivals, should be evaluated and corrected immediately. This competition may force the firm retailing the Smart Shopping Cart to engage in price wars that may erode its profitability. The legal battles that the Smart Shopping Cart might face over patent issues may also affect the operations and image of the product. The electronic market is so dynamic that it may not be possible to predict what consumers will demand tomorrow. Additionally, product improvement and development requires a lot of financial and human resources to conduct research to come up with new superior upgrades. However, sometimes the products do not last in the market before they are considered old fashioned. These threats might reduce product acceptance and penetration in the dynamic market. The SWOT analysis is summarized in the table below.

Summary of the Smart Shopping Cart’s SWOT

Competitive Market for the Product

Marketing strategy is essential before actualizing projections of a blueprint of a marketing plan. As a matter of fact, this plan functions on the margins of informed decision making based on comprehensive research on viability and sustainability. In the overcrowded cosmetics industry, product positioning is directly linked to success in the short and long term, especially for a new product such as the Smart Shopping Cart. Adopting a First-Mover Strategy, the retailer of the Smart Shopping Cart should position this product as the first of its kind in the market. Through a defined delivery channel and strong media marketing, the company should revolve on quality maintenance to support the leading marketer status. In the process, the focus will be directed to the most competitive price and convenience to gain a competitive advantage over the traditional carts. In addition, the company may develop multiple brands of the product that target different types of customers in terms of their technological literacy levels.

Potential End Customer’s Behavior

Since the targeted market has low entry barriers, the proposed product is likely to reap from the experimenting consumers as the product may appeal to the younger generation, which will be attracted to the technology-based Smart Shopping Cart. However, the older customers, especially those with less than a college education, might find the product very complex and not user friendly. This might influence them to have reservations about the product.

Potential End Customer’s Attitude

In order to move the Smart Shopping Cart brand forward, it is critical to adopt the localization strategy that directly appeals to different target markets because of differences in perception among customers. The localization strategy will help in the triangulation of the “how,” “where,” and “what” of customer perception since it targets customers from different economic, social, and usability backgrounds. It involves the identification of the unmet customer needs, examining and deploying potential enablers in new converging innovative technologies, and identifying capabilities to ensure that the needs are met. Generally, it is expected that middle-aged and older customers may develop a negative perception of the product if cases of failures are recorded. However, younger shoppers might find the product fun and engage.

Introduction to New Product Process

New product development is a term commonly used in a business setting and as such, it defines the comprehensive process used to deliver new products in a certain market. A product can be described as a set of benefits, which are exchanged for something of value, for instance, money. A product can be either tangible or intangible (French & Bell 2000).

The new product development process entails two parallel paths of which must be followed for an effective NPD. These includes; One that entails the generation of idea, designing the product and engineering the details of the product; and the one that entail researching on the market as well as the market analysis (Denton 2004).

According to the trends observable in established organizations, new product development is usually the initial phase as far as generation as well as the commercialization of new products within an aggregate strategic process with regard to the management of the life cycle of a product, which is used in maintains are and growth of the market share, are concerned (French & Bell 2000).

Generally, the new product development process involves various steps which involve; Idea generation, Idea screening, concept development as well as testing, analysis of the business, Beta testing and testing of the market, technical implementation, commercialization and pricing of the new products (French & Bell 2000).

Thesis Statement

With reference to the new product development process adopted by Harmonium Media, this paper will aim at critiquing the company’s new product development process by identifying the strong points and weak points of the process. In addition to this, the paper will also establish the phase within the process that can be improved significant and therefore providing recommendations as well as justifications of ways to improve the phase.

Discussion

Area that have been performed well (Phase 3-6)

In order to clearly depict the strengths as well as the weaknesses as entailed in the phases involved in new product development for Harmonium Media, it is noble to first understand what each phase concerns (Denton 2004).

Concept definition: This concerns if the company in question understands what new product development is all about. As such, it defines the comprehensive process used to deliver new products in a certain market (Denton 2004).

Product development and feasibility assessment; this is where the product is developed. Feasibility assessment is what the company ought to consider the most. As such, it tends to assess the viability of the developed product. It puts emphasis on establishment of problems that are likely to occur and thereby attempting to answer the main question underlain; will the new product development idea work should it be proceeded with?

Preparation for launch; this is where, after successfully completing the new product development process, the company establishes efforts as well as mechanisms aimed at preparing the product for market entrance.

Strategies are put in place and decisions ion how the product will be introduced to the market are made. A team to facilitate the successful launching is established and allocated with the right and adequate resources (Calantone, Vickery & Droge 2005).

Post-launch monitoring; this occurs right after the product has been launched. Here, several actions are emphasized.

These include; the number of consumers who are familiar with the newly developed product; the way that the customers came to know about the product; if the customers have really purchased the product; the way the product performs and how the customers could improve the product; and if the customers would really buy the product again (Calantone, Vickery & Droge 2005).

Concept definition

The concept of new business development has been excellently established and defined.

Product development and feasibility assessment

According to the case study, the top management of Harmonium Media recognizes the need for product improvements and as such, they participate actively in identification of new products opportunities. In addition to this, the top management is involved in identification of possible new areas of business by conducting an analysis of emergent customers as well as trends in competition (Van de Ven & Ferry 2000).

Further, in this phase, through conducting an analysis, the top management team identifies those areas of the existing new product development process that are not competitive enough and need improvements. The analysis done in this phase establishes the need for new product development as well as process improvement.

In addition to this, all the projects, which Harmonium Media intends to undertake, are scrutinized based on feasibility as well as costing analysis and thereby adding rough estimates of the costs, time lines and risks (Van de Ven & Ferry 2000). Moreover, assessments of costing/Risks/Time lines of the R&D projects that already exist are kept up to date.

Preparation for launch

In phase 5 of the new product development, Harmonium Media did it right by ensuring that the proposed new product development process and process improvements are blended into the already existing schedule of the R&D as well as processes improvement projects, which are being worked on.

The company has put in place, a new product development process project, which the management of Harmonium Media has estimated to exceed $ 35,000. The management ensures that the new product project passes through a comprehensive new product development process (Van de Ven & Ferry 2000).

Finally, in this phase, the R&D vice president has to indicate the range of projects related to strategic new product or process schedule, which Harmonium Media can effectively manage to complete in the course of the next five years based on the resources as well as the budget that have been allocated to the R&D.

Another stronghold entailed in this phase is prioritization of the new product development and improvement of processes and made as part of Harmonium media business strategic planning.

According to Peggy, Harmonium Media has established business units and as such, these business units have led to the initiation of new products as well as product/process improvements (Hauptman & Hirji 2006). In addition to this, the business units fund projects associated with them.

Moreover, they allocate the required expertise as well as other essential staff in a routine manner to aid or participate in the effective execution of the projects (Hauptman & Hirji 2006).

Another stronghold that Harmonium Media’s adopted NPD process depicts in this phase is the acquisition of new businesses thus acquiring new products. Acquisition of new businesses means that, new products as well as product improvement projects are inherited.

The company did not let go the key people of the acquired businesses since they were the sources of expertise required to develop or improve the new products (Hauptman & Hirji 2006).

Another thing that Peggy saw as done right is the concentration on the acquisition of companies that are capable of giving Harmonium media an entry into new markets. In addition to this, the company acquired those companies that had existing products range as well as specialist expertise that Harmonium Media lacked.

Post-launch monitoring

According to the report by Peggy, it is indicated that Harmonium media makes follow up efforts after launching the new product such that, they promote and advertise the product. In addition to this, to ensure that the set sales target are achieved, the company gives price discounts and indeed, this encourages the customers to buy the company’s products.

If any company develops new products and successfully launches new products into the market, it is not advisable that it stops there. Indeed, a wise thing to do is to come up with the most viable strategies concerning monitoring of the product, that is, strategies to monitor how the product is fairing on within the market (Van de Ven & Ferry 2000).

Moreover, according to the report by Peggy, we are informed that the products as well as the marketing managers have developed short term targets and as such, they do whatever they see as leading to the achievement of the short term targets.

Another thing that the Management of Harmonium Media Company does right is whereby they spend on incentives in order to entice the managers into doing whatever it takes in an effort towards achieving the right and most desirable results.

It is in this phase that the team put in place strategies to monitor the viability or the competitiveness of the new product developed. If the company does not engage itself in such efforts, the new product desirability is deemed to vanish (Van de Ven & Ferry 2000).

Areas that have been performed poorly

According to Peggy’s analysis, Harmonium Medias R&D staff has not conducted substantial research, with regard to the feasibility assessment as well as new product development. In addition to this, the management does not regard the ideas, which have been generated internally by the employees of this company, as significant in the new product development process (Handfield, Walton, and Seegers & Melnyk 2007).

According to Peggy’s report, the existing processes used to identify and thereby developing new products takes a lot of time to deliver the desired results.

In addition to this, she noted that the existing process of launching the new product is not effective. In a certain conversation within Peggy’s report, it is indicated that the launching of the product adopted by Harmonium Media is based on art. As such, it ought to be based on science. To elaborate this further, Harmonium Media give priorities to product launching strategies, which had been previously adopted, despite the fact that they resulted to diminishing end point effectiveness (Handfield, Walton, and Seegers & Melnyk 2007).

According to the conversation with Mark, most of the management team in Harmonium Media have their ideas based on tradition, that is, the company’s revenues comes from the print media and as such, they have maintained it as a culture and part of history.

Most of the management team members came from the print media and therefore they don’t understand the need for change, that is, to change into digital world.

The team that has been mandated with the responsibility of conducting research usually finds it difficult to find time where they would come together for discussions. This is because; they are always held up or compromised by tight deadlines (Handfield, Walton, Seegers & Melnyk 2007).

In this phase, according to Peggy, there is no substantial testing or research done after the new product developed is launched.

Phase that needs significant Improvements

According to Peggy, the phase that needs significant and considerable improvement is one that concerns preparation for launching the new product development, that is, phase five.

The reason why this phase has been singled out as needing transformation or improvements is the presence of various issues depicted by the report by Peggy. As such, this poorly performed aspect diminishes the effectiveness of the Harmonium Media New product development process launching (Funk 2003).

Time taken to identify and develop new product

According to Peggy, it takes a long time to identify and develop new products. In order to change this pattern, it is necessary that the top management identifies a team constituted of members entailed with abundance of expertise.

As such, the team ought to be placed with the responsibility of designing and implementing strategies that will effectively meet the planned objectives with regard to the new products development as well as improvement of the processes.

There should be a time line where the time limit for the development as well as the implementation of the new product will be defined and as such, it should not be exceeded (Funk 2003).

In addition to this, the top management ought to clearly define the incentives that will be made available if the team successfully develops and implements the new products or improves processes within the set time line and delivers quality (Funk 2003).

The rationale of establishing a timeline, incentives and expatriate team

By establishing a team of expatriates, it follows that the best and worthwhile ideas and conclusions are identified. In any situation, by bringing people with knowledge and skills together, the most probable thing resulting from such discussions is the establishment of indispensable and quality decisions and way forwards (Rothwell 2002).

A timeline specifies the period by which a certain project ought to be completed within. It is essential as it defines the time limit in which the team mandated with a certain task should operate within. Timelines will always define the deadlines given to execute a task and as such, the team will act against the set deadline.

Incentives are an important aspect in enticing a person or a group to perform. When incentives are established upon timely execution of a task, the team will put more efforts in an effort towards seeing that the task is completed within the time specified.

If further incentives are established upon establishment of processes, which can be regarded as worthwhile, the team will obviously concentrate on delivery of quality in order to benefit from the defined incentives (Bingham & Quigley 2009).

Ineffective process of product launching

Regardless of whether phases one to six are superior, viability of a new product development process is washed away by the ineffective process used in product launching. In order to improve on this situation, it is important that adequate research and analysis is conducted in order to come up launching the new product development process, which is the most appealing and desirable (Bingham & Quigley 2009).

Moreover, Harmonium Media’s management ought to establish a quality assurance team to look into the existing and identify flaws that make the existing process ineffective. By scrutinizing the existing ineffective launching of the new product development and improvement process, Harmonium Media will be able to identify the cause leading to inefficiency and therefore making necessary adjustments to correct the problem

Alternatively, the company can adopt another new product development process and discard the existing one. Since the process adopted, according to the report by Peggy, is ineffective, it is advisable that Harmonium Media do away with the existing process.

In new product development launching process, there are several approaches or processes that can be used and as such, the company can pick any of them in an effort towards improving the situation (Bingham & Quigley 2009).

Rationale of research, quality assurance and alternative new product development process

Research is the best as well as an essential approach towards finding the best solution to a prevailing problem. As such, research is conducted following an identification of some loopholes and if the complete process of research is followed, the exact problem leading to inefficiency in a system is usually established and worthwhile recommendations are advanced (Balachandra & Friar 2007).

Quality assurance is an aspect of total quality management and the essence of the aspect is improvement of any system’s process. According to total quality management, where a problem occurs, do not blame it on the employees.

The problem lies within the existing processes making up the system of production. With a quality assurance team put in place, it is easy to identify where the problem lies and thereby providing a solution to it. For instance, it is easy to establish the cause of infectiveness of the adopted new product launching process and thereby making necessary adjustments (Zirger & Hartley 2006).

Where several alternatives exist, if adoption of one alternative fails, one can use the trial and error approach until the best alternative that delivers the desired results is identified.

Even though this could be cost ineffective, it is a noble thing to try different processes rather than adopting one that leads to constants failures. In such a case, one may find out that the cost used to try different processes is far much less than the costs used to offset losses resulted from adoption of inappropriate process that leads to constant failures.

Art based Launching process

In launching a new product development or improvement process, a company ought to adopt a scientific based process. Harmonium uses an art based process and as such, it is the cause of ineffective launching. Art based processes are process based on the past trends.

They can be said to be probabilistic processes. The management of Harmonium Media ought to deviate from this and come up with innovative ways where worthwhile process basis is established and such; an ideal basis would be scientific basis (Rothwell 2002).

In scientific based processes, the process of launching a new product development follows a well organized procedure. Which includes; planning the process, managing it, tracking the process and measuring the new product development launching process conception?

Rationale of Scientific based New Product development and improvement Launching Process

A launching of new product development process is far much superior as compared to the art based process (Zirger & Hartley 2006). In a scientific based process, there are prerequisites that should be considered before launching of the new product process. Art based processes does not entail these prerequisites and as such, it is the major reason why failure occurs. These essential aspects include;

End to end product development launch process

A scientific based process is usually a well established and sufficient an end to end process and as such, there is no possibility of a hitch surfacing and therefore, the process is rendered effective.

Time phased tracking

In scientific based launching process, the process is consistently checked in equal intervals and as such, any flaws within the process is identified and adequately handled. In art based processes, there is no time phased tracking and as such; the flaws of the process are identified upon realizing that the process is ineffective (Zirger & Hartley 2006).

The capturing of product cost and measurement

As compared to art based new product development launching, the costs incurred in implementing a new product development launching process are usually captured and measured and thereby establishing if the budgeted or allocated resources were depleted before the process was implemented or if they were just enough for the whole process.

Management of work flow

In scientific based launching processes, the flow of work is usually managed and as such, vital information is made available and shared across all the new product development stages involved. Art based launching processes are not ideal as information regarding the launching process is usually withheld or concealed from the other employees and as such, lack of information guarantees a failing process.

Sharing of information is a vital aspect as it ensures that; events or activities involved in the launching process are effectively coordinated and therefore, delivery of qualified end results (Rothwell 2002).

Process control

Scientific based processes are ideal to use in new product development launching process because they are characterized with a control component management. This is an ideal aspect as the process is close monitored and as such, there is no chance that a flaw can occur within the process.

Use of processes based on the past

Harmonium Media adopts launching processes that have been implemented in the past without regarding what the outcome was after the process was implemented. This company acquires new businesses and as such, the company ought to depict a high level of innovativeness in order to be successful.

Relying on the past implemented processes is not an ideal thing to do putting the growing nature of the business into consideration. Processes adopted in the past may be incompatible with the current nature of launching process of the new product development and therefore, should not be adopted. This is indeed the major cause of the failure depicted by the inability to deliver quality as Peggy found out (Cooper 2009).

Rationale of being innovative

Any new situation requires new ways of doing things. If old methods are put in place to handle the new situations, it maybe that; the desired end points are of inferior quality if at all they are reached. Therefore, a company ought to do extensive research and therefore come up with superior and innovative ideas each time product development launching process is established (Cooper 2009).

This will indeed help greatly in ensuring the success of the process advanced as in most cases, the launching process will be completed successfully and the results would be far much appealing than it would have been if the company relied on the past implemented launching processes (Cooper 2009).

Reliance on old methods

Harmonium and Media Company constantly base their new developed products on tradition, that is, they rely entirely on the print media. The company needs to embrace technology and blend the print media with the digital media. As such, they will see the change in outcomes as they will experience increased returns. Contemporary, most people prefer the digital media as it is usually cost effective and brings a comprehensive coverage.

Rationale of embracing digital media

Foremost, digital media is the most acknowledged by most people across the world. This is due to the comprehensive coverage as well as the satisfaction obtained from the digital media. As such, digital media is a source of entertainment, which most people cherish. In addition to this, digital media brings a great deal of revenues since most of the advertising companies prefer the digital media over the print media.

The reason behind this is that the advertisement made through the digital media is capable of reaching a great number of people as compared to the print media (Handfield, Walton, and Seegers & Melnyk 2007).

This follows that, as more and more individuals as well as companies advertises, revenues increase tremendously and in the long run, usually the sales targets are achieved. Therefore, it is advisable that a company develops or acquires digital media products in order to realize more sales.

Conclusion

From this analysis, it is clear that the new product development process entails two parallel paths of which must be followed for an effective NPD. These includes; One that entails the generation of idea, designing the product and engineering the details of the product; and the one that entail researching on the market as well as the market analysis (Calantone, Vickery & Droge 2005).

According to the trends observable in established organizations, new product development process is usually the initial phase as far as generation as well as the commercialization of new products within an aggregate strategic process with regard to the management of the life cycle of a product, which is used in maintains are and growth of the market share, are concerned (Balachandra & Friar 2007).

Generally, the new product development process involves various steps which involve; Idea generation, Idea screening, concept development as well as testing, analysis of the business, Beta testing and testing of the market, technical implementation, commercialization and pricing of the new products (Denton 2004).

Harmonium media’s adopted new product development as well as improvement process has various areas of stronghold, which includes: concept of new business development being excellently established and defined;

ensuring that the proposed new product development and process improvements are blended into the already existing schedule as well as processes improvement projects, which are being worked on;

all the projects, which Harmonium Media intends to address, are scrutinized based on feasibility as well as costing analysis and thereby adding rough estimates of the costs, time lines and risks;

recognition of the need for product improvements and thereby active participation of the top management in identification of new products opportunities as well as possible new areas of business derived from the analysis of emergent customers;

and, identification of trends in competition and conduction of an analysis where the top management team establishes the areas of existing NPD that are not competitive enough and need to be improved, among other areas.

However, there are areas, which the business has performed extremely poorly, and which, leads to the inefficiency of the process (Calantone, Vickery & Droge 2005).

Such areas include; Harmonium Media’s R&D staff has not conducted a substantial research with regard to the feasibility assessment as well as new product development; disregard of ideas, which have been generated internally by the employees of this company;

the existing processes used to identify and thereby developing new products takes a lot of time; launching of the product adopted by Harmonium Media is based on art; and, most of the management team in Harmonium Media have their ideas based on tradition, that is, the company’s revenues comes from the print media and as such, they have maintained it as a culture and part of history among other weaknesses.

Generally, the business can be said to have succeeded in delivering a new product development process that is worthwhile. The only thing that the company needs to transform is the weaknesses depicted and discussed in this analysis. With this done, it will follow that the adopted process will not entail any flaws and the desired end point will be of good quality (Calantone, Vickery & Droge 2005).

References

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Bingham F.G & Quigley C.J (2009), A team approach to new product development, Journal of Consumer Marketing, vol. 6 no 3, pp. 5-14.

Calantone, R, Vickery, S & Droge, C (2005), Business performance and strategic new product development activities: an empirical investigation, Journal of Product Innovation Management, Vol. 12 no 3, pp. 214-223.

Cooper, R.G (2009), Identifying industrial new product success: project newprod, Industrial Marketing Management, Vol. 8 no. 2, pp. 124-135.

Denton K.D (2004), Designing in customer satisfaction: key to competitiveness, Journal of Industurial Management, Vol. 36 no. 3, pp.18-21.

French, W & Bell, C (2000), Organisational Development; Behavioural Science Interventions for Organisation Improvement, Prentice- Hall, Englewood Cliffs, NJ.

Funk, J (2003), Japanese R&D strategies, IEEE Transactions on Engineering Management , Vol. 40 no. 3, pp. 224-236.

Handfield, R, Walton, S, Seegers, L & Melnyk, S (2007), Green value chain practices in the furniture industry, Journal of Operations Managament, Vol. 15 no 7, pp. 293-315.

Hauptman, O & Hirji, K (2006), The influence of process concurrency on project outcomes in product development: an empirical study of cross-functional teams, IEEE Transactions on Engineering Management, Vol. 43 no. 2, pp. 153-164.

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Overview

Overview of Product, Project and Company Background

I-Fabric Bag Company is a new company. It is aim to start establishing its business in UAE by introducing a new project “Foldable Fabric Trolley”. This project plan to be taken by four people. The idea of this project is to include a smart fabric bag to a trolley. It can be replaced with the plastic bags that used in supermarkets. This bag will be divided with compartment for different items. It is fold- able with wheels and alarm to take it back to the car. The product >has different items to be gathered whether it’s from inside the company or outside.

Opportunity Analysis

Based on some challenges that face our markets, there are some chances that identify potential opportunities. A number of European countries have bag taxes in some form and policies are there to reduce the use of plastic bags. Some cities have already banned plastic bags. Our society has become a consumer society in which there is an increase in the number of shoppers. Largest category of these shoppers are shopping from groceries. Most of those shoppers are using plastic bags to carry their goods. However, there is lack of awareness of the environmental effect of using plastic bags.

Opportunity statement

“Creating an environment friendly fabric bags and trolley replacing plastic bags that fulfills the needs of customers and helps in saving the environment.”

Project Schedule

To achieve our project, a Gantt chart has been created to schedule the project process. Based on our plan the project starts on April 17, 2016 and finished on May 5, 2016. The project is divide into three different phases. Phase one, analyze customer needs and technical requirements and its planned to take 5 days. Phase two, investigate the concept generation, evaluation, Selection and testing and it will take 7 days. Phase three demonstrate the product design, manufacturing plan and design for X and will start after phase two, as shown in Figure 1 (for clear figure, see appendix A).

Project Progress

Our estimated schedule for phase 1 has changed, based on our actual performance. In phase 1 there are a planned durations for each sub task. But after that there are some changed led to change the duration of these tasks. For example the sub task number 2 “Run Surveys and Interview” was planned to take 3 days, but in reality it takes 2 days, because of a delay in creating survey’s questions.

In phase 2 there are five tasks to be completed. Because of short time that we have, and because of some other external activates, phase 2 started late by one day, and in the middle of the duration we start to work in phase 3. It can be observed that there were changes in the planned schedule.

The tasks duration in Product Design, and Manufacturing Plan Phase are changed to be started early before the scheduled plan, because of time pressure. All the tasks finish before the estimated time in 2 days as shown in Figure 2. This phase finalize the lase stage of our project, in which it demonstrates the final product design, manufacturing plan and decision analysis, refer to Figure 2.

Mission Statement

The product’s mission statement summarizes the direction to be followed by the product development team. It provides assumptions and constraints under which the product will be developed.

Mission Statement

Be one of the world’s producers and providers of environment friendly fabric bags. Using our expertise, we seek to develop the most creative, innovative and profitable fabric bags to make the shopping experience more comfortable and easy for all the shoppers.

Description

The idea is a smart fabric bag which can replaced with the plastic bags that are used in the supermarkets. This bag will be divided into compartment for different items. It is fold-able with multi- direction wheels and alarm to warn or notify the shopper if he/she moves a certain distance away from it.

Benefit Proposition

Environment Friendly Fabric Bags for Shoppers. Fast & Simple Shopping. Shopping? Tired of carrying plastic bags? Our product will make it FUN for you.

Our product makes it easy for the shoppers to distribute, arrange and allocate their purchases in the fabric bag in a safe and convenient way.

• Affordable
• Innovative
• Smart
• Light
• Environment friendly
• Foldable

Opportunity Statement

Creating an environment friendly fabric bag replacing the plastic bags and fulfilling the needs of customers and assisting in saving the environment.

Key Business Goals

Our first key business goal is the product would be introduced in a well-known innovation exhibition such innovator. Secondly, we would have about 50% of gross margin. Thirdly, we would accomplish 60% of the market share by 2018 hopefully.

Target Price

Our target price is affordable. In other meaning, we would like offer our customers a competitive price taking into consideration the manufacturing cost and ensuring adequate profits out of the given price.

Target Market(s)

Primary

Our target market shall capture 50% of fabric bag sales in the primary markets such as the Environmentally Friendly markets. Moreover, it shall target the shoppers in the Super and Hyper markets.

Secondary

The secondary target of the product would the grocery stores shoppers.

Assumptions & Constraints

Here, we have addressed and highlighted the different assumptions and constraints of our product. The assumption and competitive advantage is that the fabric trolley shall be compatible with IOS/Android operating systems. As most of the shoppers are very concerned about the technology advancement in the smart phone industry. This advantage would certainly be catchy for them.

However, moving on to limitations part, our product would be power assisted. Looking at the technical features introduced to the fabric trolley, this would certainly a power source. This limitations was into consideration for future development and improvement as we are very concerned and committed in meeting our customer needs and making the shopping experience very comfortable for them.

Stakeholders

Our stakeholders for the sales operations would be consisted of Customers, Distributers and retailers.

Customer Needs

Identifying the customer needs is one of the significant steps in developing the concept. By knowing who our customers are, we will be able to understand their needs and make them happy. Knowing out potential customers very well helps us to work on how to convince with our product. So, to identify the customer needs, we should follow the three following bold steps:

• Collect the raw data from the customers
• Translate the raw data in terms of the customer needs
• Organize the needs into hierarchy

Collecting the data from the customers can be done by several methods such as: doing some interviews with the potential customers, focus groups, written surveys or observing the product in use. We decided to run a survey because of the short time. The interviews and focus groups will spend more time to gather the data from the customers, however, by running the survey we expected to have a satisfied and rapid result. The following subsection will present the survey, its results and its analysis.

Survey

The survey is one of the method that helps in gathering the quantitative data about items or products in a population. The qualtrics Survey Software which is available in Masdar institute website, was used to run our survey. The survey questions were more about the customers and what they use to carry their purchased items and how often the customers go to grocery or supermarkets. The survey questions are provided in Appendix A.

The target population for our product is anyone who goes to supermarket or any shop to get their needs such as housewives, students, employees, etc. The survey was distributed among 350 person through emails and WhatsApp. The response rate was 14.86 % which means that we got only 52 responses during two days only. We got the results of two days only because of the limited time and to present our works. The following figures show the results of the survey.

The result of question 1 shows that most of the respondents about 36 person are in age between

15 and 25 years since we sent the survey for most of the friends. Then, the second highest answer for the first question was people in age between 25 and 35 years because we ensure that the survey will distributed to the families as well.

The result of question 2 which was about the gender shows that 44 respondents are female and the remaining is male because we sent the survey for most of our female friends since most of the families depend on the housewives (the mothers) to bring the missing home items. It is true that the husbands (fathers) is buying the missing home items most of time but the more knowledge of these things is the female.

The result of question3 shows that 90% of respondents are students because as it mentioned before, the survey was sent to our friends who are most of them students.

The result of question 4 illustrates that around 83% of the respondents go to the grocery from two to four times weekly. However, 12% of the respondents prefer to go to the grocery from 4 to six times weekly.

The result of question 5 illustrates that 26 of the respondents purchase items that weighted 1-3 kg per week, and the remaining distributed between less than 1, 3-5 and more than 5 kg. So, the buyers go to the grocery 2-4 times and purchase what their home needed weekly.

The question 6 was about the type of bag or trolley that the buyers prefer to take for carrying their purchased items. So, the result was that 90% of the respondents use the regular plastic bags and the reason of that is the availability of regular plastic bags in most of shops, groceries, and supermarkets as well as the buyers might forget their own bags or trolleys in home.

The question 7 was about if the buyers would like to use a fabric trolley in case if the trolley is available. The result was positive, 54% of the respondents answered with YES and 34% of the respondents answered with MAYBE which means that if the fabric trolley enters the market as a product, there is a probability of its success.

However, we asked the buyers about the reason of not using the fabric trolley and their answer was shown in question 8 result. Most of their answer was that they don’t have it and others answered that the supermarkets provide only plastic bags. So, we could say that because of the lack of the fabric trolley availability, most people use the plastic bags.

Question 9 was about the requirements of the preferred shopping bags for the buyers. We asked them about the movability of the bags and they liked it. Only 2% of the respondents said NO, however the remaining said YES. The buyers prefer to have moving bags to facilitate the buying process and because they prefer to drag the items and not to carry it to avoid any pain in their hands.

The question 10 was about another requirement which is the size of the bag. We provided three options with some examples to show for the respondent the scale of the bag. The options are small like small purse, medium like laptop bag, and large like trolley. 69% of the respondents prefer to have medium size of the bag.

The question 11 was about the flexibility of the shopping fabric bag/ trolley. 54% of the respondents think that the fabric trolley is flexible and 40% said maybe it is flexible.

The result of question 12 shows that most of the buyers prefer to drag one foldable trolley that includes several compartments rather than carrying a pile of separate plastic bags. We think that the buyers prefer the foldable trolley because of ease of storing as well. It will be easy to store one foldable trolley rather than a pile of separate plastic bags.

In question 13, we asked the respondents which one of the three options are fashionable and the answer was 79% of the respondents said that fabric bag/trolley is the most fashionable one.

Question 14 was about storing the bag, as we mentioned before, 69% of respondents prefer to store one foldable fabric bag rather than a pile of plastic bags which will keep a space for other usage.

Question 15 was about if the buyers will use the foldable fabric trolley to save the environment.

75% of respondents said YES for saving the environment which means that people start to go for the sustainable product and understand the importance of saving the environment.

So, the last step in identifying the customer needs is to organize the needs into hierarchy and this will be illustrated and explained in Quality Function Deployment (QFD).

Competitive Analysis

A competitive analysis is a critical part of the product making lifecycle. According to this evaluation, we can establish what will makes our product unique and therefore what attributes we play up in order to attract the target market.

In our case the main competitors were identified as follow, first the regular fabric bag which is made from polyester and comes in verity of shapes, sizes and colors, as shown in Figure 18.It can hold stuff up to 5 kg, its relatively cheap it can obtained by only 2 AED, in UAE an example of a famous fabric bag as shown in Figure 19, is the one which is sold in Carrefour and Ikea stores.

Furthermore, the second competitor is the foldable fabric bag, although it’s not popular in UAE it can be considered as one of our product competitors. The bag has a solid foldable frame as shown in Figure 20 it is made from Flax ,can be folded and hold up to 12 kg.It can be obtained from online websites such as Amazon. Its price is ranged according to its size and design, it’s usually start from 25 AED.

Next, the third competitor is the fabric bag with clips, which consist from single or multiple bags made from flax with plastic clips to be fixed in the trolley cart as shown in Figure 21 and 22.

It comes in verity of shapes, sizes and colors and can hold stuff up to 50 kg. Similarly of the foldable fabric bag the fabric bag with clips it is not popular in UAE but it can be considered as one of our product competitors and can be obtained from online websites such as Amazon. Its price is ranged according to its size and design, it is usually start from 50 AED.

Finally the last considered competitor is the trolley shopping bag which is a fabric bag attached to it a metal wheel to facilitate its movability. It can be folded and handle up to 30 kg. It is made from polyester and metal and it is sold from 35 AED.

In addition to identifying all the competitors a further analysis was made in order to compare between them. As shown in the below table, the main three competitors were the plastic bag, the fabric bag (including both the foldable and the one with clips) and the shopping trolley bag. The comparison criteria were based on durability, movability, size, capacity, flexibility of usage, space allocation, aesthetic, ease of storage, environmental impact and availability. The criteria were concluded from the survey result and will used in the QFD.

Table 1: Competitors’ Analysis.

Likewise a detail analysis was made as shown in the below table, in order to identify the drawbacks if each competitor in order to avoid them in our design.

Table 2: Competitors’ drawbacks.

Technical Requirements

Target Technical Specifications

In order to get the target specifications the results of the survey were implemented along with Human Ergonomics taken into consideration, below is the table that shows each specification along with its targeted value:

Height of Trolley, Speed of movement were based on Human factors analysis so that the height of the trolley with the handle extended is equivalent to the height of the elbow bent at 90 degrees (which is the best position for the arm while pushing/pulling the bag), moreover the speed of movement is equivalent to the average speed of human being movement so that the pushing or pulling of the bag will not be an obstacle or will not cause any delay in the movement.

Number of wheels is set to be standard four wheels which makes it easier to move the bag than if it was one or two and more than four might cause imbalance and might make movement even harder.

Space volume of the trolley is based on 1 meter height, 60 cm length and width so the total needed volume is around 0.36 m3

Number of Compartments is 5 so they can fit various types of purchases that the user would prefer to separate from other items.

Storage area of the foldable bag is approximately (60cm x 60cm x 20cm), and the net carrying load is 7 kg or more as we found from the survey results that most responds were that their average shopping weight per time is 3-5kgs.

Life time is targeted to be 10 years so the bag is durable and users will not be forced to change them frequently, also it is made of fabric so it’s an environmentally friendly material and will not cause bad effects such as the plastic, we are targeting wide spread of the product too make it easier for the customers to get them anywhere and anytime and finally to have it at an affordable price.

Targeted ideal values are as clarified in the table above and marginal values would be at ± 20% of the ideal value.

Quality Function Deployment (QFD)

Quality function deployment (QFD) is a method to help transform customer needs (the voice of the customer [VOC]) into engineering characteristics (and appropriate test methods) for a product or service. It helps create operational definitions of the requirements, which may be vague when first expressed.

The table to the left shows the customer needs which were derived from the survey conducted, the weighting was based on a focus group decision and as shown Availability had the highest weight followed by Aesthetics, Durability, movability and size.

Below also you can find the relationships between specifications and customer needs.

And hereafter comes the competitive analysis, we can see that our product is doing well compared to the existing competitive products in the market, plastic bags varies between high strength points and low strength points, while the fabric bag and the traditional trolley comes in the middle as they represent the average product.

The graph above represents the interrelationships between the different characteristics of the product from the graph we can see that material is related to many other characteristics as well as the height of the trolley and price.

From the above table we can see that the ranking of the top most important characteristics is as follow:

1. Price
2. Spread of product
3. Material
4. Speed of movement
5. Height of Trolley
6. Storage area
7. Attractiveness (Design and color)

Potential Sales

The success of every good is highly dependent on the customers’ reaction. There are some cases when the design was perfect, and the product combined technologies and innovations, however, as a result, failed to satisfy current market needs, and thus, became a failure. First and foremost, it should be stated that in order to meet the expectations of clients and orientate to innovations as well, it is essential to investigate the market and determine the sales potential of the good before it is manufactured.

This aspect should not be undervalued as it influences the process of future sales in a significant way. Furthermore, it can be considered as the most vital stage of the whole project. The determination of the market potential provides with an opportunity to evaluate the chances of the product to succeed on the market and will provide with a possibility to change some features of the product before it has entered the market.

The research on the potential sales can influence design greatly. For example, the high potential sales require more investments in terms of tooling, whereas low potential sales result in less investment for tooling. Fabric trolley designed in this project is orientated to satisfy the needs of people who care about the environment and value technologies and innovations. We suppose that this fabric trolley will substitute the half of the modern market as our mission and goals correspond to the Abu Dhabi’s 2030 vision regarding the creation of the sustainable city.

The environmentally friendly concept will influence potential sales beneficially. The price for the product will be affordable. Moreover, the fabric bag is needed to every person that does groceries. We suppose that there is hardly a person that does not buy plastic or paper bags in the supermarket. Thus, our fabric bag is a perfect option for substitution. This good is needed for every consumer. Moreover, the fact that smart fabric bag is not costly contributes to high potential sales.

Durability is a vital component as the trolley can function up to ten years. The convenience is another aspect that should be taken into consideration. According to our survey, the majority of people, namely 90%, use plastic bags for carrying products. People, who chose the plastic bags option were asked to answer the next question that was related to the desire to change focus towards the fabric trolley in case it was available. The statistics prove that people are environmentally friendly and value comfortable design as 54% of respondents answered positively, 34% hesitate, and only 12% refused to substitute the plastic bag with a fabric one.

Although the majority of respondents were females aged 15 to 25, it is worth pointing out that the potential customer is everyone who goes to the supermarket, values eco-friendly and convenient products. With the consideration of this fact, the smart fabric trolley will experience success on the market as it satisfies the needs of the customers, corresponds to their daily activities, and is affordable. The smart fabric trolley is durable, and thus, has a competitive advantage among the rivals. Taken into account the above stated information, the conclusion can be drawn that the potential sales are going to be high.

The detailed analysis of the competitors and evaluation of their strengths and weaknesses give an opportunity to adjust the design of our fabric trolley and to reduce the number of disadvantages, creating the innovative product. Innovations are not always related to the extensive usage of technologies. It is more about the ability to combine the advantages of different goods and represent them from a new perspective.

In order for the product to succeed on the market, customers need to be aware of it. In order to reach this objective, the management should invest in marketing and promotion of the product. In case, the good is advertised, there are more chances that the potential customers will be aware of the commodity and are likely to buy it. The product availability is another factor that affects sales potential volume in a significant way. For the customers to be satisfied, it is necessary to make sure that the products are available in every store where it can be purchased. The competition on the market plays a vital role for the sales as well.

The price, durability, convenience, design, and innovations are the most common aspects that the customer is looking for. For the product to succeed it should meet stated above requirements. It is worth pointing out that designing our product, namely smart fabric trolley, we took into consideration all these aspects and developed the product that has no analogues on the market and is sure to meet the expectations of the target group. Thus, the potential sales volume will be high. By 2018, we aim to accomplish 60% of the market share. The population of Abu Dhabi consists of over two million of people. The approximate number of customers is 666,000. The calculations of potential sales show the following data:

Potential sales = Potential Customer Number * Sales per Customer * Estimated Market Share; 666,000 * 129,605 * 0,6 = 51,790,158 AED. So, the potential sales according to our research are 51,790,158 AED.

Industrial design

The design of the product should not only contain a technological aspect, however, should meet the needs of the customers making the product more convenient. The industrial design of the smart fabric trolley takes into consideration the desires of consumers and incorporates the advantages of the products that already exist. In the process of industrial design, the most important aspect is the creation of the idea. The product should satisfy the needs of the customer and be useful for buyers. This idea should take into consideration the following information:

1. Who is the target group?
2. Is this idea useful for the target customers?
3. Is the idea unique and original?
4. Does it demand significant investments?

The second stage is a conceptual work. This stage involves the fundamental ideas and logical relations between the manufacturer, developer, and buyer. Then, it is essential to make a visual representation of the good. As shown in the pictures, we have developed an accurate visual representation of our smart fabric trolley.

The 3D rendering is vital as well in order to virtually analyze and work on the model, to delete or add some features. The next stage is visualization and creation of the experimental model. The final phase of the industrial design sums up the previous stages of the product development and is directed to the creation of the model and final checking process. The prototyping stage of the project deals with the final model of the good that will be manufactured and delivered to the customers.

Concept Generation

Concept generation is the most critical step in the design process. It comes after identifying the customer needs and establishing the target specifications. So, we started to generate the concepts by first decomposing the product into sub-problems using the functional decomposition. The following figure shows the overall function followed by a figure shows the sub-functions.

The above diagram illustrates the overall function of the foldable trolley. We put energy, handle, base, bags, wheels and sensor as input and the output is the energy, moveable gabs and alarming. We mean here by the energy is pushing/pulling the trolley or other source of energies that can be used to move the trolley such as electrical energy. The handle, base, bags and wheels are the components of the foldable trolley and each of these has its own function. The sensor is for alarming the buyers with the location of their trolleys.

The function of the energy is to except any external energy such as pushing/pulling or electrical energy and then convert it to the translational energy and apply it to the sub-functions. The handle is for controlling the movement of the trolley. It will absorb the external energy and transfer it to the structure of the trolley. The function of the structure or the base is to hold the bags and combine other components as well.

So, the structure will transfer the energy from the handle to the wheels. The bags is used to store the purchased items. However, the wheels will accept the energy from the structure and convert it to rotational energy and not only from the structure, the wheels can accept any external energy. The sensor will be used to alarm the buyers or shoppers of the location of their trolley. So, the output will be a trolley has moveable bags and alarming sensor with applied translational energy. The following table will show some propose solutions for each critical sub- problems. These solutions were proposing based on the existing technology and some of them infeasible, we just added to see if we can do it or not because most of the unusual things leads to creativity.

Table 3: Critical Sub-problems and their Proposing Solutions.

The proposed solutions for energy are chemical, pneumatic, electrical, kinetic and hydraulic. Chemical, pneumatic and hydraulic are not feasible solutions because our product is so simple and no need for these kind of energy. We just propose all the possibilities that we can select later among them. We proposed for the movement, four solutions related to the type of the wheels and one solution is the belt that are similar to military tank but simple and smaller.

However, we focus on the wheels since they are more feasible to the trolley. Third critical problem is the storage of purchased items and this can be solved by using different types of bags and compartments. So, we propose five different solutions such as one big compartment as the usual trolley, multiple compartments for providing more space for storing the items, mix of bags and compartments like one compartment having many attached bags that can be removed or added at any time as needed, multiple bags which attached to each other and mixed configuration which will include a rubber band for bottles. The forth critical problem is alarming. We propose to have a GPS screen, or sensor connected to mobile apps, signal receiver, smart watch or car base. The following figures show the classification tree for each critical sub-problem with trimming the infeasible solutions.

The classification tree for the energy source shows that we can use kinetic and electrical energies. What we mean by kinetic is the push/pull by people and the electrical such as fuel cells or rechargeable battery.

As we mentioned before, we trimmed the belt solution from the movement because we want simple and well-known solution, so we keep the wheels but with different type as shown in the above figure.

The above classification tree for storage shows the type of bags or compartments that can be used for storage. So, we can use single or multiple compartments or we can use multiple attached bags. Moreover, we can combine the bags and compartments to end up with more satisfied solution or use mixed configuration which is a compartment divided into different sections and there is rubber bands for bottles.

The above figure shows the classification tree for alarming. We keep the GPS and smart watch as the feasible solutions that we can do. The more simple our product and meet the need of the customer, the more the product will be successful.

So, we list the proposed solutions that we take it into account in a table and combine various sub- solutions into several rough product concepts. The following tables show the different concept combinations.

The above table shows the first concept combination which is combining the kinetic energy, multi direction wheels, one big compartment and mobile apps. Pushing the trolley by people is generating a kinetic energy which is delivered to the trolley. The trolley has flexibility of moving with the multi-direction wheels. It has one big compartment for storing the purchased items. It is provided with sensor to alarm the buyers of the location of their trolley. The sensor connects with the buyers’ phones by using mobile apps.

The above table shows the second concept combination which is combining the kinetic energy, moveable wheels (foldable), multiple bags and smart watch. Pushing the trolley by people is accumulating a kinetic energy makes the trolley moving. The trolley has multiple attached bags and moveable as well by adding foldable wheels to the bags. The trolley has sensors that connected to the smart watch of the buyers to alarm them of the trolley’s location.

The above table shows third concept combination which is combing the kinetic energy, multi direction wheels, mix of bags and compartments and GPS. Pushing the trolley generates a kinetic energy. The trolley can move easily in multiple directions. Also, it comes with a unique structure by combining bags and compartments. Adding the GPS feature to make it even smarter.

The above table illustrates one of the concept combination which is combining electrical energy, one direction wheels, mixed configuration and GPS. The trolley can move only in one direction which will work by using electrical energy. It has a mixed configuration plus customized bands which is manufactured especially for fragile items. Moreover, sensor that connected to the GPS of the car or phone will alert the shoppers if they leave without taking the trolley with them. It will lead them to the trolley location as well.

The above table displays the last concept combination that is combining the electrical energy, fixed wheels, multiple compartments and smart watch. The trolley has fixed wheels which will work by using electrical energy. It gives the shopper more space by adding more compartments. Moreover, it will connect the trolley to any smart watch by adding sensor.

Concept Evaluation and Selection

Concept Screening

After generating the five different concept, a Concept Screening was carried in order to select the promising concepts as well as improve the concepts.

The first step was to identify the criteria that we will use to distinguish the concepts and can itself generate significant debate. The criteria’s were concluded from both the first survey and the QFD. They were as follow:

• Ease of movability
• Flexibility of use (easy to opening, packing, unpacking)
• Aesthetic
• Ease of storage
• Ease of handling (how to control it in the supermarket)
• Separation between different items

The second step was choosing a reference concept, against which all other options will be compared, the existed shopping trolley bag was chosen a reference concept. This was a very helpful process, as it is much easier to compare two options than allocate a stand-alone score to a single option. The third step was to examine each concept and compares it against each criterion to give it a relative score this was done by a focused group consist of the team members.

The scoring scheme was as follow + if the concept was better than the reference, 0 if it was same as the reference and – if it was worse than the reference. Finally each concept then has its score totaled (net) to show its overall score and according to the net the concepts were ranked as shown in the below table concept 2, 3, 4 were chosen for further improvement and all the other concepts were excluded.

Table 9: Concept Screening.

Next, after selecting the promising concepts, concept 2 and 3 were combined by adding the pluses criteria on each concept the combined concepts has detachable bags (from concept 3) and the shape of concept

Concept 4 was improved by adding to its wheels that move in several direction to improve its movability.

Concept Scoring

Then after that a concept scoring was carried in order to select a single promising concept. The steps were somehow close to concept screening but with further detailing and were as follow. The first step was to identify the criteria that we will use to distinguish the concepts.The criteria’s were concluded from both the first survey and the QFD and the same as the concept screening criteria’s but with more detailing and they were as follow:

• Ease of rotation
• Ease of packing and unpacking
• Attractive look
• Dose not occupy large space after usage
• Ease of clean
• More than one compartment
• Separation between liquid and solids

The existed shopping trolley bag was chosen a reference concept again. The second step was weighting the selection criteria , the weighting was decided based on a focus group consist from the team members while considering the survey 1 result at the same time. Then the concepts were rated again and the weighting score for each concept were obtained by multiplying the rate of each concept by the weighting of the criteria. The scored were added and the concepts were ranked and the combination of concept 2 and 3 were chosen as seen in the below table.

Table 10: Concept Scoring.

Concept Testing

In order to predict the customer acceptance of the selected concept, a survey was conducted.

Survey

First we started by deciding the type of the survey and we determined to conduct an internet type survey since it is the fastest type and has the highest response rate, then we spread it through the social networks. Second, we designed the survey questions the questions were divided into two part the first part was a screening question and the second part consist of questions regarding the shape, features, price, predicted sales rate and area of improvements. Form of the survey is in appendix A.

The results of the survey

The total responses were 93 as shown in Figure 34 with having 87% response rate, which is much higher response rate than those in the first survey. We think because of spreading the survey link rapidly through the social networking rather than sending it only through the emails.

The results of the main questions were as follow, more than 57% answered that maybe they will buy the bag, refer to Figure 35, more than 38% are willing to pay between 50 – 100 AED as price for the bag as shown in Figure 36, finally more than 40% think that the bag need improvement in the shape and form as shown also in Figure 36. So, the improvement was made on the concept, is that instead of the hexagonal shape, the bag was redesigned as rectangle shape.

Final Concept Selection

The above figure presents the final selected concept for the survey. We received some comments from respondents demanding enhancement in form and shape and other comments were asking for more horizontal length and less vertical height, so to enhance the shape we decided to change the shape into rectangle bags at wide diameters.

So the final concept would be rectangle, wider on length and smaller in height consisting of foldable frame, separated rectangle bags that can be connected together by clips.

Product Design

To translate the concept into a manufactural product, several elements should be considered that shown in the below figure.

The focus of this figure is the product function and connected with the surroundings which are mutually dependent on each other. The form, material and production have been considered in the conceptual design to develop the function. However, in the product design, these elements should be considered to develop the form that meet the desired function as well as the material that are available. The upcoming sections will describe the form by defining the configuration of connected components, the material and technical specifications of our product as well as the product production with considering the function of the product.

Manufacturing Plan

There are two core levels created to determine the main components of the Foldable Fabric Trolley. Level 1, represents the two main components; bags and structure assembly. Level 2 characterize the structure assembly in sub components such as basket base, handle, screws, and wheels. On the other hand, the bags require bag base and clips, as shown in the below two figures.

Bill of Materials

These components need a particular materials in order to produce them. For example, handle and basket base require a steel to build it. And based on the availability of these materials, it can be determine whether to make the component or to buy it form a suppliers, refer to the below table.

Make or Buy Analysis

This determination can be analyze from our ability to purchase the item or not? If we can make it or not? And is it cheaper or expensive? For example, Handel, Basket base and Bag base, we can purchase the items and we can make them, but it is not cheaper for us, so we decided to buy them form a supplier which is cheaper for us rather than make it. The below figures illustrate the make or buy analysis for our product.

However there are a required criteria’s that assist us to decide which supplier we chose such as price and the quality of the items. For example, the below table shows the steel which the handle made of, it cost us 10 AED to buy it from a supplier, but it might cost us a lot if we buy it.

Cost Estimation

Table 11: Suppliers for Purchased Parts.

Material costs: 15 AED, from Alibaba.com

Purchased parts: 57 AED, the lowest cost was taken for each part.

Product Cost Breakdown

Labor Force

Estimated time for bag production is 1.5 hours

Table 12: Labor Force.

Total Cost of labor per bag is (17*0.5*1) + (14*0.75*2) = 29.5 AED

Tooling Cost

8 Working hours per day, 5 days a weeks, 45 weeks per year

Total hours production per year = (8*5*45) = 1800 hour

Sewing machine cost per bag = 1500/(5*1800) = 0.167 AED per bag

Total Tooling costs per bag = 0.167 + 0.033 = 0.2 AED per bag

• Overhead : 8 AED per bag
• Selling Expenses : 3 AED per bag
• Total Cost = Material costs + Purchased parts + Labor cost + Tooling cost + Overhead + Selling Expenses
• = 15 AED + 57 AED + 29.5 + 0.2 + 8 + 3 = 112.7 AED
• Profit : (Markup 15%) = 112.7 *0.15 = 16.905 AED
• Discount : (Margin 20%) = (112.7+16.905) *0.2 = 25.921 AED

Design for X

Design for Environment

Up to 80%* of the environmental impacts are determined at the design stage and there are many aspects to be considered. One of them is source reduction where the goal is to use less virgin materials. The second aspect is design for recycling where the objective is to facilitate reuse. In our design both aspects were considered by applying the following features to our product:

Maximized use of recycled materials

• Products is designed with less mass (All the steel sections of the trolley were hollow sections instead of solid sections).
• Product is designed with longer life (more than single service such that the trolley can be used for domestic usage- fabric bags can be detached and used for different proposes like picnic bag)
• Reduce packaging (the product will be packed in a single package after production)

Design with less variety of materials

• Only 4 type of materials were used in the design.

Design for Assembly

In our design several guidelines for design for assembly were followed in order to maximize the ease and speed of assembly and they were as follow:

• Product is designed with a base component for locating other components.
  • Trolley has large steel base and all other components like the handle the wheels were attached to it.
  • Base is not required to be repositioned during assembly.
  • Design components are mate through straight-line assembly.

Conclusion

We conclude that our product would hopefully have a great anticipated success in the coming years. The environment friendly feature would have a great impact on the sales operations supporting Abu Dhabi’s 2030 vision which aims to have a sustainable city. Furthermore, the technology features introduced to the product would also affect the sales potential positively. This is due to the smart society that we are living in, where everyone loves to have something unique or technology oriented gadgets that is fashionable and stylish in the same time.

Lessons Learnt

At this point of the project, everybody had done their tasks in a very good way. Nevertheless, we had the issue of time management, where we had a very short time for completing the last parts as we were engaged in completing the other obligations. In future projects, we seriously need to tackle such challenge in more appropriate manner.

Future Features

Following Apple’s approach in introducing a product and then later on introduce future improvements/enhancements to the existing product. We would like to offer future features to our product, where we will offer an electronic note to write down the grocery list and add a small sensor to detect the written items. Moreover, we are studying the motion sensor which will be installed on the fabric trolley bag which in turn would communicate with an application on a smartphone.

Appendix A

Project Schedule

Project Progress

QFD

Survey for identifying the customer needs

Survey for testing the concepts

The following table shows the contribution of each team member in each tasks including report and presentation. The scale will be as follow: main, small, very small and none contribution.

New Product Development

There are various stages that have to be followed in coming up with a new product that will suit the market. In this case, our product will have to go through various stages before it is fully commercialized in the market. Therefore, new product development is a good process within the company’s strategic plan that needs to be well attended to (Koen, 2004, p. 8). As a matter of fact, our product will go through the following stages.

Idea Generation

In this stage, ideas for the new product will be obtained through various channels. In a broad perspective, the company can get these ideas by conducting a good SWOT analysis. These ideas can also come from consumer and market trends (Ullman, 2009, p. 5). Employees and our salesmen will play an important role in coming up with new ideas that will help us to develop and launch our new product.

Idea Screening

Ideas that have been generated will be screened to come up with the best outcome. This will be done to eliminate unsound concepts that might not suit our market. Screening is necessary before resources can be devoted to the whole process of developing the new product (Koen, 2004, p. 12).

Concept Development and Testing

In this stage, the company will develop the engineering and marketing details that have to be used. This will include looking for the target market, the amount it will cost to develop the product, and how the market will react (Ullman, 2009, p. 15).

Business Analysis

Business analysis can be done by looking at various market dynamics. In this case, the company will have to come up with a price, estimate sales, and project the break-even point and profitability (Koen, 2004, p. 17).

Market Testing and Beta Testing

In this stage, the company will have to test the product in the market and make the necessary adjustments in relation to customer needs and expectations (Ullman, 2009, p. 15). This will help the company to evaluate if the product is acceptable in the market.

Technical Implementation

Technical implementation includes various processes that have to be followed or initiated (Ullman, 2009, p. 21). This includes; resource estimation, logistical planning, contingencies, supplier collaboration, and others.

Commercialization

In this stage, the company will now launch the product in the market (Koen, 2004, p. 23). As a matter of fact, the company will run various promotions and advertisements to popularize the new product in the market.

New Product Pricing

New product pricing involves various aspects that relate to the new product in the market. These aspects revolve around value segments of the product, product costs, and value analysis (Ullman, 2009, p. 25). All these aspects should be evaluated because pricing will play an important role in the success of the product in the market.

Ideas

There are various approaches that will be used to get ideas on the new product. As a matter of fact, the company will use distinct approaches and mechanisms to idea generation to get the best possible outcome. In this case, the company will carry out a basic research based on SWOT analysis (Ullman, 2009, p. 28). Other ideas will come from the current and existing consumers and market trends. It should be known that the company has its own research and development department that will also help in coming up new ideas.

Employees will be given an opportunity to have a say on product development. In extreme cases, the company will look at competitor products in the market to come up with its own product. Different ideas have to be filtered to settle on the best possible outcome (Koen, 2004, p. 25). In this case, the company will have to filter all ideas as time goes by. Forums will be used to share different ideas and come up with the best new product ideas.

This is because different people can be able to identify faults in a given idea than when it is done on an individual basis. Critical analysis will also be done on each idea to identify its strengths and weaknesses (Koen, 2004, p. 28). This is because an idea can be technical and difficult to implement based on its strengths and weaknesses. In the long run, the company will settle on an idea with more strengths and less weaknesses.

Software like Jive will also be used to filter and settle on the best possible idea. This will be done through the channeling of different voices from the market and competitors to pick the best idea (Koen, 2004, p. 15). The company will also run through its business values to settle on the best idea. This is because an idea might not be in conformance with the company’s goals and objectives.

Criteria

For an idea to move to the next stage, it will have to suit the target market. This is because customers are supposed to benefit by using the product. In addition, the product must be technically feasible to be manufactured. An idea will only be selected if it can meet the current and expected market competitive pressure.

This is because market trends are always changing as time goes by and a product must be flexible to suit such market needs (Ullman, 2009, p. 22). As a matter of fact, expected profits from the proposed product will be evaluated and analyzed to see if the idea is indeed feasible.

Flow Chart

Source: RFFlow, 2010

Reference List

Koen, P., A. (2004). The Fuzzy Front End for Incremental, Platform, and Breakthrough Products. New York: Prentice Hall.

RFFlow. (2010). Sample Flowcharts and Templates. Retrieved from https://www.rff.com/flowchart_samples.php

Ullman, D, G. (2009). The Mechanical Design Process. New York: McGraw-Hill.

Stages of the Product Development

New products are developed as a result of the idea generation stage at which the group of people propose and discuss the ideas for designing the new product. Thus, much attention is paid to creativity and innovation while proposing the ideas along with discussing strengths and weaknesses of this or that idea. The second stage is the product screening and evaluation.

It is important to evaluate the market validation of the product in relation to the product’s specific features and qualities. Thus, it is necessary to evaluate the physical qualities and functions of the developing product according to their attractiveness for the target audience and possibilities of the company to produce the product of such a class. From this point, the concept testing and discussion of the product’s necessity for the market is the important phase of the product development process.

The next stage is the business analysis. The producer should focus on the correlation between the potential products’ costs and profits in order to conclude about the advantages of developing and producing a new product.

The next stage includes the product development according to the worked out models and determined features and product testing with references to the samples of the potential consumers (Goldsmith, 2008). The final stage of the process is commercialization when the strategies for the effective product marketing and promotion are planned and realized.

Examples for the Product Development Stages

Starting the product development process from the idea generation stage, the company organizes the group of persons responsible for presenting creative ideas. New ideas can become the result of brainstorming activities and discussions. The product screening and evaluation is based on comparison of the potential product’s features with the other products presented in the market. The size, forms, attractiveness, and functions of the product are carefully evaluated in order to avoid launching similar products.

Realizing the concept testing, the company focuses on the potential public’s reaction to the product. The main task of the company is to propose the unique approach to discussing and using familiar products and services. Business analysis is the important stage when the company makes decisions on the relevance of developing a new product. If the expected profits are higher than costs, it is necessary to launch this product within the market.

The product development stage includes the technological process when the necessary engineering procedures are realized to manufacture a new product with specific qualities. The company works out the prototype and provides the necessary laboratory tests (Goldsmith, 2008). Commercialization is also a creative part of the process when the company needs to develop the effective promotion strategy and advertisements with the help of ethos, pathos, and logos in order to draw the audience’s attention to the product.

The Relation of Consumer Buying Process to the Stages of Product Development

The consumer buying process depends on the awareness of need. This awareness is related to the process of idea generation when the definite product is only at a stage of its discussion because of the obvious audience and market’s needs.

Then, a consumer is inclined to evaluate alternatives, and this or that choice is directly connected with the effectiveness of the product screening, evaluation, and development (Goldsmith, 2008). The consumer’s choice depends not only on the product’s features and qualities but also on the effectiveness of the promotion strategy. Thus, the fact of purchasing the product supports the idea that commercialization strategy was developed effectively.

Reference

Goldsmith, E. (2008). Consumer economics: Issues and behaviors. USA: Prentice Hall.

Introduction

Sleep is one of the most important components of life and one cannot do without it. However, most people overlook the importance of making enough time to sleep apparently due to the lack of knowledge about the benefits of having enough sleep (Persson, 2006). Psychologists argue that sleep helps relieve a person from stress hence boosting one’s health. Sleep helps the body recover from the daily fatigue and prepares a person for the next day (Colten & Altevogt, 2006). For one to maximize the benefits accruing from having enough sleep, it is essential to consider the best pillows depending on the sleeping habits. People have different sleeping habits ranging from side sleeping to back sleeping. Most producers of pillows ignore the fact that people have different sleeping styles hence the need to design a variety of pillow types to suit the needs for all.

Sleep helps the body to recover after a long day of work coupled with preparing one for the next day (Kornblatt, 2010). However, the pillow has to be of good quality that fits the need of every client. Selection of the wrong pillow may cause backaches and lead to fatigue on waking up the following day. Currently, there are many pillow vendors in the world with each type of pillows designed to suit different purposes. However, there exists a gap in customer satisfaction, as the currently available pillows do not meet the customers’ needs fully. People have different sleeping habits with some being side sleepers while others are back sleepers (Cohen-Mansfield & Jensen, 2005). People with different sleeping styles require different types of pillows hence the need for a more advanced type of pillows to fill the gap.

Additionally, people have different sleep needs owing to the diversity of the nature of work. In that regard, the pillows need to be designed in such a way that they have the necessary devices such as an alarm clock, Mp3 player, and a timer. Following research into the pillow market and considering reviews from customers, I came up with a new type of pillow that is more advanced than the ones available on the market. The sleep and wake pillow is designed in such a way that it allows its users to sleep comfortably overnight and has numerous devices fixed in it that suit the needs of every individual. The pillow comes in different sizes to address the needs of the different types of sleepers as illustrated in Appendix 1. This paper shall analyze the process of idea generation; discuss the competition the new product shall face as well as the strengths and weaknesses of the pillow.

Overview

Over the past few decades, businesses have invested heavily in the manufacture of pillows that would satisfy the customers’ needs. The increasing spinal cord issues have specifically led to an increase in demand for pillows (Jacobson, Boolani & Smith, 2009). Experts argue that the pillow that a customer chooses for use when asleep affects his/her sleeping patterns significantly. Innovation has led to the advancement of the pillows through the inclusion of different features and devices such as alarm clocks and Mp3 media player. However, the pillows that are currently in the market do not fully satisfy the customers’ needs hence the need to introduce highly sophisticated types of pillows. Psychologists are continuously educating their clients on the importance of sleep in solving mental problems and spinal cord disorders (Persson, 2006).

Competition

Competition is high among vendors of the pillows in the global market as indicated by the prices of pillows. Currently, pillows are trading between $30 and $200 depending on the quality and other additional features. Most organizations are using the online marketing strategies to maximize their sales without incurring huge advertising costs. The global market has opened new market channels helping firms maximize their profits against the backdrop of the stiffening competition in the various industries (Piller & Walcher, 2006). Most rival companies can negotiate for discounts from suppliers due to their voluminous purchases. In that regard, they can lower their overall operational costs leading to lower prices of their pillows without hurting the profits.

The sleep and wake pillows are at the inauguration stages, and they may not benefit from the economies of scale facilitated by such voluminous purchases. Some of the most notable rivals in the industry are the PillowsAA and Fibers Inc., Kush Kushion, Quality down Fibers, NodPod, and the Atlantic Feather. The listed companies are among the leading producers of pillows in the US, and it is estimated that they produce between 10,000-15,000 pillows daily. To counter the stiff competition, we shall manufacture high-quality pillows and maintaining the production costs as low as possible. The low production costs will facilitate the low pricing strategy adopted by the company hence outsmarting the competitors.

The Product

Description and Specification

The sleep and wake pillow is an advanced type of pillow designed to fill the gap between the quality and the price. Different from the pillows currently in the market, sleep and wake pillow has different features fixed in it, which distinguish it from rival products. Some of the components of the pillow include:

1. Tap sensor control
2. Alarm
3. LED, 3D speaker
4. MP3 Player-USB chargeable

3D sound system speakers and microphone (virtually undetectable)

The sleep and wake pillow is Installed with great quality dual 3D sound system speakers not to mention the preinstalled 3D’s sounds and tracks that cause a relaxation feeling. Psychologists argue that low sound music brings emotional relaxation and helps the listener to get rid of the daylong stress (Klein, 2012). The volume is adjustable allowing the clients to make the necessary adjustments for maximum enjoyment.

LED Display of time & date

Another feature that distinguishes the sleep and wake pillow from those produced by the competitors is the LED Display of time & date. The pillow is the closest object when asleep and clients do not have to leave the bed to check the time on a watch or a phone.

Alarm Clock (with Silent mode)

Another device installed in the pillow is the alarm clock, which is sold with the pillow at an inclusive price. The installation of alarm is informed by the view that different people spend their days accomplishing difficult tasks, and thus they may over sleep, which causes inconveniences at their workplace (Gordon, Rodríguez, Olson, & Miller, 2005). The alarm clock has a silent mode and only vibrates the pillow below the head alerting the user that the waking time has approached. The alarm clock allows the users to set the wake-up time depending on their schedules.

Pillow Design and Material

The sleep and wake pillows come in different designs informed by the view that different people have different sleeping habits. The sizes also vary to allow customers to select the size of pillow they feel comfortable lying on (Cohen-Mansfield & Jensen, 2005). The pillows are of high quality and are designed to align the neck and the spinal cord to prevent back pains. Customers have previously complained of backaches after sleeping on poor quality pillows. Our pillow is made of wool making it fictile depending on the weight placed.

The product development phases

Idea Generation

Idea generation refers to the process by which entrepreneurs identifies a business opportunity. Business ideas may be obtained from both internal and external sources (Wheelwright, 2010). The internal sources of ideas include:

1. Ideas from the CEOs and top managers
2. Ideas generated by employees in the course of employment

On the other hand, the external sources include ideas generated from

1. Competitors
2. Customers
3. Suppliers

The idea of creating the sleep and wake emanated from a comprehensive analysis of the competitors and the customers. The analysis of the competitors involved the use of SWOT assessment to assess their products’ strengths and weaknesses. The analysis revealed that the rivals did not include innovative features on their pillows such as the alarm clock and the sound system speakers. Companies that included such features in their pillows did so with every device sold with the pillows being disintegrated and sold separately. The idea of integrating such features and selling the pillow at an inclusive price proved a viable one. A team comprising of four members visited the various rival company’s stores to assess the pillows produced by the competitors.

Customer assessment was done through the Internet whereby the prospective customers were advised to cite the main concerns about the currently available pillows. The customers were reached through the social media, private email addresses, and their private phone numbers. The majority of the customers contacted cited the absence of various features on the pillows while others complained of backaches even after using the pillows from the rivals. The idea of producing a high-quality pillow to mitigate the backache complaints happened to fill the widening market gap.

Concept Testing

Once an idea is formulated, it needs to be screened before devotion of resources for implementation purposes. Testing the idea involves drafting of the expected returns from the sale of the product. If the returns are good enough to support the idea, the thought is implemented. Having analyzed the potential of the target market, I am convinced that this product will be the customers’ choice since it is built on the innovation. Besides, the product is lowly priced compared to that of the competitors. Appendix 2 illustrates the expected returns over a period of 5 years.

Concept development and testing

This aspect involves presenting the idea in a more meaningful form to paint a picture of the product as if it was already in the market (Ernst, Hoyer & Rübsaamen, 2010). Our strategy in this phase will involve posting the idea on the social media with accompanying photos of the pillow. Customers will be encouraged to review the idea. The reviews shall be used as the basis for determining whether to develop the product or drop it.

Marketing Strategy Development

This phase involves an analysis of the target market in light of the following factors:

1. Product planned price, distribution, and marketing budget for the first year.
2. Description of the target market, the planned product positioning, sales, market share and profit goals for the first few years
3. Planned long-term sales, profit goals, and marketing mix strategy

In the case of sleep and wake pillow, the strategies shall be based upon consultation with the product development team. The prices shall be slightly lower than that charged by the competitors but still high enough to ensure that the firm operates at a profit.

Business Analysis

Having identified the target market and the projected sales, the next step will be to determine the net profits, which shall be achieved from the sale of the product. Appendix2 illustrates the expected sales, the costs and the net profits in the first and the fifth year.

Product development

This stage of product development involves the conversion of the idea into a tangible product for sale to the target customers. For a firm to embark on the development of the product there must be enough indicators that the product shall be profitable (Song& Swink, 2009). The profitability of the product is determined in the previous phases. In this phase, the pillows shall be produced in small scale and sent to the market for testing.

Test marketing

The pillows produced in the product development phase shall be introduced to the Miami market and some advertising made to alert the customers of the existence of the product. The customers’ responses shall inform the product development team on whether to embark on the large-scale development of the product.

Commercialization

In the commercialization stage, the product is produced in large scale and introduced into the market in large volumes. The commercialization of a product is highly dependent on the customers’ response in the test-marketing phase (Wheelwright, 2010). If customers embrace the creation at the test-marketing phase, the product is produced in large volumes. In commercializing sleep and wake pillow, the company shall assess the customers’ response in the test marketing stage. If the response is positive, the marketing strategies will be implemented. The firm shall embark on aggressive advertisement to alert customers of the existence of the product.

Target market

Pillows are luxurious commodities designed to provide comfort for people after a busy day at work. Statistics indicates that bar and restaurant owners are the main consumers of pillows due to a large number of visitors who board in their hotels (Becker, 2013). In that regard, I intend to target Miami city due to the voluminous number of restaurants in the city. The city has the best boarding rooms in the US and receives millions of visitors annually. Most of the visitors are tourists who come to the area for exploratory purposes. I will set up a team of aggressive sales officers who will help market the pillows directly to the clients. Additionally, I will utilize the Internet to reach both the local and the global customers. The use of the Internet to market my product will not only facilitate savings but will also boost the penetration of the product to the international market. Therefore, to avoid risks and market failures, I will partner with the local wholesalers and retailers, and convince them to help in the distribution of the pillows.

Five Ws Analysis

Who

The sleep and wake pillow targets every individual regardless of his/her age, gender, or marital status. However, the initial market shall be restricted to the Miami city due to the high number of restaurants and people in the area.

What

There are numerous advertising channels available for promoting new products in the contemporary business environment. Some of the most common mediums include the Internet, personal selling, mass media, sponsorship, outdoor advertising, and print advertising just to mention a few (Cheng, Blankson, Wang, & Chen, 2009). Sleep and wake pillow will utilize the following channels to alert customers of the existence of the new creation.

The Social Media

The social media shall be used to gain insight of the customers’ support of the idea before its implementation (Todi, 2008). After the product is developed and introduced into the market, the media shall remain a relevant advertising channel. Facebook, Twitter, and LinkedIn are some of the channels that shall be used to improve knowledge about the product among customers.

Television adverts

TV adverts are more effective than any other form of advertisement since they reach many customers in both the local and the international market. Most business adverts are aired alongside the most watched programs (Bonabeau, Bodick, & Armstrong, 2008). The skillful placement of such adverts between the most watched programs ensures that they reach many customers. Just like in the print media advert, our TV ad shall specify the various features contained in the pillow alongside a photo of the product.

Mass Communication / Radio

Advertising through the radio can be an effective way of reaching customers since radios are accessible to all. In light of that view, scripts about the pillow shall be aired in all the local radio stations.

Direct advertising

The company shall also engage in personal advertising through sales persons who will make constant visits to the various restaurants and wholesale and retail stores located in the city. The salespersons shall educate customers of the important of the pillow over those produced by the competitors and persuade them to test the product.

Print Advertising

Lastly, the organization shall submit eye-catching written adverts to the local newspapers with the specifications of the pillow clearly indicated. Photos of the pillow shall be posted alongside the persuasive messages to attract the attention of the customers.

When

All the adverts made through the listed channels shall occur at different times of the product development process. Social media adverts shall be made before the development of the product to invite customers’ reviews of the idea before devoting money to the development of the pillow. Adverts through the social media shall continue through the commercialization phase. Personal adverts shall be launched after the product development phase. The radio and print advertisement shall be launched at the product testing phase and continue after the commercialization phase.

Where

The first office shall be based in Miami since the company targets the city’s residents. There will be an open show at the Miami office whereby customers will benefit from price discounts.

Why

The marketing strategies adopted by the firm are in line with the company’s objectives of attracting as many customers as possible in the local market. The advertising methods are meant to ignite anticipation among the prospective customers residing in Miami and its environs.

Objectives

The primary objective of this marketing strategy is to reach as many customers as possible located in Miami. The secondary objectives include:

1. To increase the demand for utilizing sleep and wake pillow
2. To gain at least 30% awareness of brand/product to target market
3. To deliver a strong message of sophistication, desire and anticipation, to the target market associated with the brand and product

Message

The primary message for the product launch will be

“Sleep and wake pillow is designed to provide you with the comfort that you need when at the bed. It has integrated features, which include an LCD media player, an alarm clock, and a digital watch. The pillow is made up of high-quality cotton to provide enough comfort. Buy today and enjoy an amazing experience….”

Conclusion

Sleep is an important component of everyone’s daily schedule and requires one to devote enough time to relax and recover from the busy daily activities. A well-designed pillow may be of great importance in enhancing good sleep and in preventing back pains. Unfortunately, the currently available pillows, in the market, are not good enough to guarantee the user of relaxation and to prevent back pains. In this paper, the sleep and wake pillow has been explored as a solution to the cited concerns. The product is in its development stages, and the marketing strategies have been explored in details. The pillow includes certain features that distinguish it from those produced by the competitors. Some of the notable features found in the new pillow include an alarm clock, Tap sensor control, LED watch, and a 3D speakerMP3 Player. The product shall initially be launched in the Miami city before extending the market share to other cities. Promotion shall be done through the Internet, radios, TVs, direct marketing, and open shows among others.

References

Becker, E. (2013). Overbooked: the exploding business of travel and tourism. New York, NY: Simon and Schuster.

Bonabeau, E., Bodick, N., & Armstrong, R. W. (2008). A more rational approach to new-product development. Harvard Business Review, 86(3), 96 – 102.

Cheng, J., Blankson, C., Wang, T., & Chen, L. (2009). Consumer attitudes and interactive digital advertising. International Journal of Advertising, 28(3), 501-525.

Cohen-Mansfield, J., &Jensen, B. (2005). Sleep-related habits and preferences in older adults: a pilot study of their range and self-rated importance. Behavioral Sleep Medicine, 3(4), 209-226.

Colten, H., & Altevogt, B. (2006). Sleep Disorders and Sleep Deprivation: An Unmet Public Health Problem. Washington, DC: National Academic Press.

Ernst, H., Hoyer, W., & Rübsaamen, C. (2010). Sales, marketing, and research-and-development cooperation across new product development stages: implications for success. Journal of Marketing, 74(5), 80-92.

Gordon, I., Rodríguez, A., Olson, D., & Miller, K. (2005). Pillow case. Journal of Cataract & Refractive Surgery, 31(9), 1824-1825.

Jacobson, H., Boolani, A., & Smith, D. (2009). Changes in back pain, sleep quality, and perceived stress after introduction of new bedding systems. Journal of Chiropractic Medicine, 8(1), 1-8.

Klein, C. (2012). Backache Relief: The Ultimate Second Opinion from Back-pain Sufferers Nationwide who Share Their Successful Healing Experiences. New Bremen, OH: Crown Publishers.

Kornblatt, S. (2010). Restful Insomnia: How to Get the Benefits of Sleep Even When You Can’t. San Francisco, CA: Red Wheel LLC.

Persson, L. (2006). Neck pain and pillows–A blinded study of the effect of pillows on non-specific neck pain, headache and sleep. Advances in Physiotherapy, 8(3), 122-127.

Piller, F., & Walcher, D. (2006). Toolkits for idea competitions: a novel method to integrate users in new product development. Research and Development Management, 36(3), 307-318.

Song, M., & Swink, M. (2009). Marketing–manufacturing integration across stages of new product development: Effects on the success of high-and low-innovativeness products. IEEE, 56(1), 31-44.

Todi, M. (2008). Advertising on social networking websites. Wharton Research Scholars Journal, 52(2), 76-98.

Wheelwright, C. (2010). Managing new product and process development: text cases. New York, NY: Simon and Schuster.

Appendices

Appendix 2

Appendix 3

Soren Case Study

Company and Jen Moritz Introduction

The company’s full name is Water Treatment Group. It developed various chemicals for treating water. Jen Moritz was the Marketing Manager for The Water Treatment Group of Companies. She was responsible for the development of chemicals for treating drinking water and for maintaining pools. In this case, her tasks included developing a relatively cheap product for cleaning pools called Kailan.

Estimation of the Market Potential for Residential Pool Clarifiers

The following is the overall outlook of the market and the product, among others, it will compete.

• There are 300,000 commercial pools,
• One thousand water parks,
• $ 30 Million in revenue generated from selling such chemicals,
• The market for the chemicals is projected to grow by 7% to $32.1 Million in 2007,
• Water treatment Group enjoyed $ 6.1 M / $ 30 M = 20% market share in 2006.

The residential Market Size at Retailer Prices is as follows.

There are 9 Million Residential Pools x $ 50 (Annual Treatment Cost per Pool) = $ 112.5 Million at Retail. Since manufacturers buy at 60% of Retail Prices, the $ 67.5 Million is the potential of the market for the manufacturer. The company’s products are for residential pools. The company also aims to have a footing in the market to launch other products. However, competitors are eager to launch their version of the product to counter Water Treatment Group’s Kailan MW and Coracle.

Reasonability of $1.5M Market Size potential

Soren’s target of $1.5 Million in the first year (which is $1.5/$67.5 Million = 2.2%), is an extremely reasonable and realizable market share to target at launch. The pricing of the product is quite reasonable too, as indicated by the following analysis.

The retail price of a container of 0.5 Gallons was estimated at $25 using a manufacturer price of $14.88. At that manufacturer price, Soren estimated a 35% gross margin. The following is the breakdown.

Breakdown

• Selling Price = Cost Price + percentage margin x Selling Price
• Selling Price (1 – percentage margin) = Cost Price
• Selling Price = Cost Price / (1 – %margin)
• Distributor Cost Price = $14.88
• Distributor Margin = 30%
• Distributor Selling Price = 14.88 / (1-0.3) = $21.25
• Distributor Margin = $6.375
• Retailer Cost Price = $21.25
• Retailer Margin = 15%
• Retailer Selling Price = 21.25 / (1-0.15) = $25.00
• Retailer Margin = $ 3.75

The breakdown was also quite reasonable. Hence, failure of success was unlikely to emanate from the costing and pricing. Conversely, it would lead to loss of income for the major players.

Situation Analysis

Product description briefly

Research conducted by Soren concluded that residential pool owners – 80% take care of their pools – are not technical. Soren did not explain the benefits of the product to them in a way they would easily understand. The benefits include lower costs hence a significant annual saving, better performance, and a cleaner pool.

Promotion description

Residential pool owners buying behavior follows this pattern:

• They buy from mass retailers
• They also buy from Specialty Pool Retailers
• They get maintenance services from professionals in the field
• They are not deeply aware of the details of pool chemicals
• They rely on counsel from professionals, retailers, and promotions for information

Soren failed to study the market and the buying behavior well leading to a catastrophic performance of coracle.

Price and distribution description

Distributors did not support the product because they could sell an adulterated version of Kailan or comparable products at significantly lower prices. Players in the supply chain discovered it would lead to lower revenue because they sell other chemicals too. The packaging of Coracle even made this fact known. The offsetting of earnings and the fact that there were other products in the market dented coracle.

New pricing structure

To get distributors’ support for Coracle’s success requires massive spending in branding. The change in route may not be a good idea from Soren’s earnings. Since the company is major, a B2B company the change will require a different experience. Therefore, margins will have to be re-adjusted to get supply chain support. The following presents a preliminary analysis.

Preliminary analysis

• Distributor Cost = $2.32 (equal to factory price)
• Distributor Profit/Loss = $1.28
• Distributor Selling Price = $3.6
• Retailer Cost = $3.6
• Retailer Profit/Loss = $1.13
• Retailer Selling Price = $ 4.73
• Annual Cost of Coracle Clarifiers for the customer = $47.3
• A lesser product from competition averages an annual spend of $50

At the price of $4.73, the distributor and retailer get similar margins from chemical sales of the competitors’ products. Hence, the distributors and retailers are naturally indifferent to Coracle since it is not adding or deleting to their profitability. The implication is that Soren must raise the distributor profits by adjusting the price of Coracle upwards.

Normally, customers spend $50 annually on clarifiers and $300 annually on various chemicals totaling $350. Spending $47.3 in Coracle and spending $225, which is 75% of the $300, on supporting chemicals, they will spend $272.3. That figure is considerably smaller than the initial $350. Hence, Soren can increase the price by $7.7 for more profitability. Additionally, the extra money will attract more distributors as it will increase profitability.

Recommendation

Soren should rethink its approach in many departments through reengineering. Reengineering of business processes is one of the most radical and effective methods of dealing with change. Reengineering is also effective in reducing costs and improving the quality of service. A far-reaching method requires a thorough evaluation before a firm embarks on it to refine its processes. Many firms have tried and failed to carry out Business Process Reengineering successfully. The reason is that the process requires a lot of time, resources, and knowledge for successful implementation. At Soren, there needs to be changed to the processes carried out by management in the past. These changes must be informed by previous needs and market assessment.

Advantages and Disadvantages of BPR

Currently, the economic environment is quite competitive and unpredictably dynamic. A firm has to review its operations, processes, and policies continue to align them with contemporary methods of doing business. Because of the dynamic nature of the business environment, a firm must embrace change if it is to survive or even maintain the same influence that it has in the industry. The need to meet changing and somewhat sophisticated consumer needs and to find cost-effective ways of operation has made Business Process Reengineering a necessity.

The advantages of this process are far-reaching and quite essential. Business Process Reengineering is the essential rethinking and revamps of processes in a business to achieve an enhancement in current measures of operations strategy performance and strength such as cost, quality, and delivery.