Chapter 2

Product and Service Design

Product and service design involves creating and improving offerings that meet
customer needs and are efficiently produced or delivered.
What does Product and Service design do?

The various activities and responsibilities of product and service design include the
following:
1. Translate customer wants and needs into product and service requirements:
Understand what customers want and turn those into specific product or service
features.

2. Refine existing products and services: Make improvements to current products

or services to better meet customer needs.

3. Develop new products and/or services: Create brand-new items or services to

offer to the market.

4. Formulate quality goals: Set standards to ensure the product or service meets
desired quality levels.

5. Formulate cost targets: Decide how much the product or service should cost to
make and sell profitably.

6. Construct and test prototypes: Build sample versions of the product and test
them to check if they work well.

7. Document specifications: Write down detailed instructions and standards for

making the product or delivering the service.

8.Translate product and service specifications into process specifications: Turn the
design details into steps and methods for manufacturing or service delivery.
 Reasons for Product and service design or redesign

Organizations engage in product and service design or redesign primarily due to

market opportunities and threats driven by various changes.

The factors that give rise to market opportunities and threats can be one or more
changes:

1. Economic Reasons: These relate to money matters—when a product isn't making

enough profit or is costing too much to maintain.

Example: If a smartphone model has low sales because it's too expensive for
customers, the company might redesign it using cheaper materials to reduce costs.

2. Social and Demographic Reasons: These involve changes in society or population,

like age, lifestyle, or location.

Example: With more elderly people in the population (like aging baby boomers),
companies might redesign their products (e.g., phones with bigger screens or
medical devices) to better serve older users.

3. Political, Liability, or Legal Reasons: This includes laws, safety standards, or

government regulations that businesses must follow.

Example: A car company may redesign its vehicles to meet new government safety
laws—like adding more airbags or fuel-efficient engines to meet emission rules.

4. Competitive Reasons: When rival companies launch new or improved products,

others may need to redesign theirs to stay competitive.

Example: If one brand of headphones releases a model with noise cancellation,

other brands might redesign their headphones to include that feature or improve
battery life.

5. Cost or Availability Reasons: If the price or supply of materials or labor changes,

a business might need to redesign.
Example: If the cost of a particular metal increases or there's a shortage of skilled
workers, a company may choose alternative materials or automate processes to cut
down on costs.

6. Technological Reasons: When new technology is available, companies often

redesign to take advantage of it.

Example: A TV company might redesign its product to switch from LCD to OLED
screens because they offer better picture quality.

Idea Generation

Ideas for new or redesigned products or services can come from a variety of sources,
including customers, the supply chain, competitors, employees, and research.

Customer Input: Ideas come from customers through surveys, focus groups,
complaints, or suggestions.

Input from Supply Chain and Employees: Suppliers, distributors, and workers can
share ideas through interviews, suggestions, or complaints.

Competitor Analysis: By observing what competitors offer and how they operate,
businesses can come up with new or better ideas.

Reverse Engineering: Taking apart a competitor’s product to understand how it

works and find ways to improve it.

Research and Development (R&D): Organized efforts to create new knowledge or

improve products/services:

• Basic Research: Learning new things without immediate commercial use.

• Applied Research: Using knowledge to develop products or services that can
be sold.
• Development: Turns research results into products or services ready for the
market.
 Legal and Ethical consideration

Designers must think about both legal rules and ethical values when creating a
product. They must avoid causing harm to people or the environment.

Environmental Impact: If a product or process might damage the environment, this

must be taken seriously and addressed responsibly.

Product Liability: If a faulty product causes injury or damage due to bad design or
poor quality, the manufacturer is legally responsible for it.

Uniform Commercial Code (UCC): This law says that products must be fit for their
intended use and of acceptable quality. Customers should be able to expect the
product to work properly.

Environmental factors: Sustainability

1. Cradle-to-Grave Assessment (Life Cycle Analysis): This is a method to check how

a product affects the environment from the time it’s made to the time it’s thrown
away. It looks at things like how much pollution it causes, how much waste it
creates, and how it affects the air and water.

Example:
When making a plastic water bottle, companies look at:

• Pollution from making the plastic,

• Fuel used for transportation,
• How the bottle is used and thrown away,
• Whether it ends up in landfills or gets recycled.

2. End-of-Life (EOL) Programs: These are plans for what to do with products that
are no longer useful, especially electronics. The goal is to keep them out of landfills
and reduce pollution by recycling or properly disposing of them.
Example:

• A company collects old smartphones and recycles them instead of letting them
be dumped in poor countries.
• Dell and Apple have programs where customers can return used laptops and
phones for proper recycling.

3. The Three Rs: Reduce, Reuse, and Recycle

a. Reduce – Value Analysis: This means checking if any parts or materials in a

product can be improved or removed to make it cheaper and better for the
environment.

Example:
A car company redesigns a part to use less metal, reducing weight and fuel use.

b. Reuse – Remanufacturing: This is about fixing and reusing old products by

replacing broken parts and selling them again.

Example:

• A company repairs and resells used printers.

• Car manufacturers remanufacture engines and sell them as like-new.

c. Recycle: This is turning used materials into new products to save resources and
protect the environment.

Example:

• Melting down used aluminum cans to make new cans.

• Using old plastic to make clothing or furniture.

Why Companies Recycle:

1. To save money.
2. To help the environment.
3. To follow laws and regulations.
 Other design Consideration

1. Degree of standardization

Standardization refers to how similar or identical products, services, or processes

are.

Standardized products are the same for every customer (like calculators or 2% milk),
produced in large quantities.

Standardized services give every customer the same experience (like an automatic
car wash).

Standardized processes mean the way things are done doesn’t change much,
leading to consistent results.

Degree of standardization: Advantages

• Improving Quality and Consistency: Using the same procedures every time
helps keep the quality of products or services high and consistent.
• Reducing Cost: Standard processes help buy materials in bulk and lower
inventory costs. It also saves money by making operations smoother and
reducing mistakes.
• Enhancing Operational Efficiency: Standardized steps make processes simpler
and more predictable, helping managers make faster and better decisions.
• Improved Productivity: When everyone follows the same process, there's less
confusion, fewer mistakes, and more work gets done in less time.

Degree of standardization: Disadvantages

• Lack of Flexibility: Standard processes can make it hard to meet special

customer needs or adapt to markets that want customized products.
• Stifled Innovation: Focusing too much on doing things the same way can limit
creativity and make it harder to respond to changing customer preferences.
 • High Initial Cost: Setting up standardized systems (like automation) can be
expensive and take a lot of time, needing investment in training, equipment,
and planning.

2. Mass customization: This means making large quantities of a product but still
allowing some customization for individual customers.

• Delayed Differentiation: This is when a product is mostly made, but the final
steps are delayed until the customer makes a choice (e.g., color, features).

Example: A plain t-shirt is made in bulk, but printing the design is done after
the customer picks it.

• Modular Design: This means using pre-made, interchangeable parts (modules)

that can be combined in different ways to create different final products.

Example: A computer made from separate modules like CPU, RAM, and hard
drive that can be swapped or customized easily.

3.Reliability: This is about how well a product, part, service, or system does the job
it’s supposed to do, under expected conditions.

• Failure: This means the product or service stops working properly or doesn’t
do what it’s supposed to.
• Normal Operating Conditions: These are the specific conditions (like
temperature, workload, or how it’s used) under which the product or service
is expected to work reliably.
 Phases in Product Design and Development

Feasibility Analysis
Product Specifications
Process Specifications
Prototype Development
Design review
Market test
Product introduction
Follow up evaluation

1. Feasibility Analysis: Check if the product idea is possible and worth doing. This
means looking at demand, cost, profit, technical skills, and whether the idea fits the
company’s goals.

Example: A phone company considers making a foldable phone. They analyze if

customers want it, if it can be made profitably, and if their team has the skills and
tools to build it.

2. Product Specification: Define exactly what the product must do to satisfy

customers, including legal and quality standards.
Example: For the foldable phone, specs might include screen size, battery life,
durability, and software features, ensuring it meets user needs and legal standards.

3. Process Specification: Decide how to make the product, including the steps,
equipment, and materials needed.

Example: The company decides on the machines and steps needed to assemble the
foldable screen and test it for durability.

4. Prototype Development: Build a sample product to test for flaws in design or

production.

Example: They make a few foldable phones to see if the hinge works smoothly and
the screen lasts with repeated use.

5. Design Review: Review the prototype and decide whether to improve, continue,
or stop the project.

Example: If the hinge on the prototype breaks easily, the team meets to decide
whether to redesign it or cancel the product.

6. Market Test: Try selling the product in a small area or group to see how customers
react.

Example: The foldable phone is released in one country or through selected stores
to see if customers like it.

7. Product Introduction: Launch and promote the product to the wider market.

Example: Ads are released, the foldable phone is stocked globally, and marketing
teams create buzz through social media and events.

8. Follow-up Evaluation: Collect feedback after launch to see what works and what
needs improvement.

Example: Users report that the screen scratches easily, so the company updates its
future models or improves materials.