Design Of Products Services Marketing Essay

Introduction

Product and Service design is considered as one the most important factors of operations management, simply because a good or bad product and service design can make or break the company, “products and services are often the first thing that customer sees of a company, so they have an enormous impact” (Slack et al 2007). It is widely believed that a good design not only satisfies customer, but also corresponds the idea of the product or service to its market. (Slack et al 2007) defines product & service design as “The main objective of good design, either product or service, is to satisfy customers by meeting their actual or anticipated needs and expectations”.

The list below comprises of goals or objectives of product & service designers, and is extracted from various literatures citied in the reference.

Aesthetically pleasing

Satisfaction of needs

Customer expectation

Life-time Reliability

Ease of manufacturing

Differentiation (unique product)

Low cost

Quality

Speed

Dependability

Literature Overview

Stages of product & service design

To understand design of product & services, we have to look at the stages of design from concept to specification as described by (Slack et al 2007). There are several key stages and processes through which a design passes through, figure 1.1 shows the stages of design in order.

Figure 1.1

Concept generation

Concept generation is recognized as the brain of the design operation, (Slack et al 2007) defines it has “a stage in the product and service design process that formalizes the underlying idea behind a product or service”. There are many ways in which a company can generate new concepts; they vary from conducting a SWOT analysis to measuring market and consumer trends. (Slack et al 2007) identifies five ways listed below.

Ideas from customers

Invention of microprocessor was possible because of an idea from customer, (Michael 1995) describes in his book “The Microprocessor: A biography” that Busicom a Japanese calculator manufacturer placed an order with Intel for custom calculator chips”, it was Busicom who`s need for calculator microprocessor chip, initiated the beginning of microprocessors.

Listening to customers

(Leonard et al 1994) describes listening to customers as one of the most important factors in concept generation, during their research (Leonard et al 1994) found that “The downtown Chicago Marriot hotel had been open for fifteen years before its management discovered that sixty-six percent of all guest calls to the housekeeping were requests for irons / ironing boards”.

Ideas from competitor activity

Apple Inc. launched iPhone on June 29, 2007, a one of a kind touch screen phone, it has sold 50 million units worldwide, due to its huge success apple`s competitors also entered touch screen phone market and today all the major cellular companies provide touch screen phones. (http://www.apple.com). All market-aware companies follow the activities of their competitors and sometimes this involves reverse engineering, that is taking apart a product to understand how a competing organization has made it (Slack et al 2007).

Ideas from staff

The contact staff in any organization interacts with customers on a daily basis, these staff may have good idea about what customers likes or dislikes. (Beddows 2001) writing for management services magazine highlights that staff suggestion schemes are not new, “We are looking at a concept that was recorded in Japan in 1721 with shogun offering rewards for ideas”.

Ideas from research & development (R&D)

A good R&D department is every company dream; because it can single handedly change the whole outlook of the company. (Slack et al 2007) defines R&D as “The function in the organization that develops new knowledge and ideas and operationalizes the ideas to form the underlying knowledge on which product, service and process design are based”

Concept Screening

(Slack et al 2007) describes it as a method of assessing each concept or option against a certain design criteria, as highlighted below.

Diagram 1.2

Design funnel is a model that depicts the design process as a progressive reduction of design options from many alternatives down to the final design (Slack et al 2007).

Diagram 1.3

Preliminary design

(Karl et al 2000) describes preliminary design as an initial effort at specifying the component products and services in the package and defining the processes to create the package. (Slack et al 2007) identifies preliminary design as a method of reducing design complexity to achieve competitive advantage. (Slack et al 2007) describes three common approaches to complexity reduction.

Standardization

Commonality

Modularization

Design evaluation and improvement

The purpose of design evaluation and improvement is to perfect the product or service before it reaches into development stage, because once product reaches development stage it becomes costly to retract (Karl et al 2000). Three techniques are defined by (Slack et al 2007) which have proved useful in improving the preliminary design.

Quality function deployment (QFD) – ensures eventual design meets the needs of customers.

Value engineering (VE) – cost reduction approach that examine its purpose as well as its basic and secondary functions.

Taguchi methods – design technique that tests the robustness of a design.

Prototyping and final design

Prototyping is the final stage of design it is where a design is physically tested to make sure it works according to the design specifications. (Slack et al 2007) lists three forms of prototyping

Card models

Clay models

Computer simulation (CAD)

(B) Critical Analysis

Application of product & service design literature in businesses

According to UK design council businesses are putting an extra effort into good product and service design (Slack et al 2007) this helps businesses to create products and services that they can compete on value rather than price. Businesses are investing heavily in product and service design and due to this trend; design companies like Ocean observations are benefiting (Slack et al 2007). Product and service development is becoming a crucial factor for companies but there are some industries which cannot survive without them, and the most important one is pharmaceuticals (Karl et al 2000). Novartis is one of the giants of pharmaceutical industry with R&D budget of over $ 7 billion, it takes them 10 – 15 years to produce a drug from the scratch so having plenty of potentially marketable drugs in development is vital (http://www.novartis.com). There are many examples of businesses that lost their competitive edge because of their inability to keep on producing good product and service design, Hoover dominated the vacuum cleaner market for decades but did not invest in R&D, along came Dyson and changed the whole outlook of vacuum cleaning, today Dyson is the biggest manufacturer of vacuum cleaners in the world and according to Martin McCourt, the Dyson chief executive, “Without R&D and relentless innovation, we wouldn’t be able to take on huge markets like the US or stay ahead of competitors. It’s our technology that Americans clearly understand and appreciate” (Doran 2006).

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(Slack et al 2007) described concept generation as the brains of the design activity, and further highlighted that ideas from customers and listening to customers as very important factors, it certainly hold true in case of many business, which are improving their businesses because of their customers. (Magidson & Brandyberry 2001) describes how IKEA when aiming to grow in North America by creating stronger bonds with its customers, assembled nine groups of roughly dozen customers each to get their idea about how an IKEA store should be designed to maximize customer satisfaction, with the customer feedback a new store was designed in Chicago and after several customer surveys it was reported that 85% of people coming to store rated it good and no one rated it as a bad design. This shows just how important ideas from customers are for any product or service design.

(Henser 2003) further highlights the importance of listening to customers by explaining how Boeing is transforming their interior design of the plan by getting to know their customer wants & needs, Boeing tour center in Washington receives approximately 110,000 visitors from all over the world per year, making it the top tourist destination in the state about 200 – 300 people take interactive surveys about Boeing`s interior design every day. One of the directors at Boeing, Blake Emery described their surveys as “The purpose of the research is twofold: to influence the design of airplane interiors with input from actual users and to provide our airline customers with valuable information that will help them select their interiors”, Speaking about the importance of listening to customers Blake Emery said “Even in the few short months it’s been in operation, we learned several pieces of valuable and sometimes surprising information”, above mentioned statements from a Boeing director are the reason that companies are starting to invest in every aspect of concept generation.

Research and development is listed as an important factor in most of the literatures regarding product and service design (Slack et al 2007; Karl et al 2000), most business agree with this as they are investing a lot of time and money in R&D. WD-40 is a company in lubrication industry which is famous for its first and most well-known product of the same name as company WD-40, it is a water displacement lubricant, and as the name suggests it took the scientists 40 tries to perfect the formula (http://www.wd40.com). WD-40 is an example of a product going through extensive R&D, and as (Slack et al 2007) suggests that research usually means attempting to develop and idea but it’s the actual development that requires a lot of creativity and persistence. WD-40 started with just one product but today it markets its product in more than 187 countries worldwide (http://www.wd40.com), because of sheer determination and continuous R&D development.

Problems / discrepancies in product service design literature

While studying product service design literature one thing became clear that there is a lot of emphasis on concept generation and screening (Slack et al 2007; Karl et al 2000), but one important factor that literature did not consider is the post development evaluation. Once the product / service design is completed and released, company receives an enormous amount of feedback from customers which is a very powerful tool of improving future designs. Designers at Microsoft`s Xbox 360 used customer feedback to improve their future designs, Jonathan hays a senior designer at Microsoft pointed out that “we used customer feedback to improve our future designs, designers incorporated a lot of features in the new design that customers desired” (Xbox360.com).

(Slack et al 2007) describes design funnel as one of the main ways of concept screening, but the concept of design funnel does not apply in real life situations as companies do not have an infinite or large number of options to start with, and sometimes the number of options being considered increases with time, and most importantly in reality designers often go back to the starting point as potential design solutions raises fresh questions or become dead ends.

Conclusion

Product / service design has changed the fortunes of companies, good design helped establish companies while bad or stagnant design destroyed the company (Slack et al 2007). This view is also supported by (Karl et al 2000) “good product service design is the single greatest asset any company can wish for”. We looked in the literature review that a good product service design can not only enhance the competitive of the company but it can also capture a major share of the market. (Karl et al 2000) describes this concept as “window of opportunity” the period in which the new product faces no or low competition in the market place, figure below explains the concept.

Diagram 1.4

Good or breakthrough product service design is extremely successful for companies because its life cycle correlates with window of opportunity and this provides company with high amount of return on their product development. Figure below explains product service design lifecycle.

Diagram 1.5

There are many examples of companies creating an amazing product but didn’t see the full potential because of bad product / service design. (Porges, 2010) describes that how Nintendo Wii suffered because of bad design of its controller, Wii controller because of its ultra high gloss finish becomes extremely slippery if your palms produce even the slightest bit of sweat, but because Wii thrives on motion captured action it was a complete disaster for Nintendo, so in response to this potential hazard Nintendo offered customers latex grip shells free of charge.

To summarize product service design holds enormous amounts of benefits of companies but they must ensure that designs are what customers want; a really sophisticated product or service design is useless if it does not appeal to the customers (Slack et al 2007) is in agreement with this analysis by saying that “product and services are often the first thing that customers see of a company, so they should have an impact”. Companies should look at the market leaders from today and see how they achieved customer satisfaction by delivering good product / service design but they should also learn from the failures of many companies which disregarded product / service design as an unimportant function.

(A) Provide a brief description of an organization of your choice.

Apple

Apple Inc. is an American multinational corporation founded by Steve Jobs and Steve Wozniak that designs and manufactures consumer electronics, computer software and personal computers. Apple is best known for its hardware such as Macintosh (Mac) computers, iPod, iPhone, and now iPad, on the software side Apple is famous for Mac OS X operating system, iTunes, iLife, and iWorks. Apple`s sales soared passed $ 50 Million at the end of 2009 fiscal year. Apple has over 35,000 employees worldwide and it has been voted as the most admired company in the world by Fortune magazine for three years running (apple.com).

(B) Drawing upon the literature review in task 1 answer the following questions:

How does the chosen organization compare or contrast with the literature for the topic selected?

Apple is considered as a market leader for product and service design, (Wray & Johnson, 2009) consider apple as a revolutionary company that changes the whole perspective of things with its ingenious product service designs. (Wray & Johnson, 2009) points out that it was apple that introduced mouse for the first time with its Macintosh computers. Apple is the perfect example of a company whose roots and in product and service design, after careful analysis of Apple and product service design literature I came to the conclusion that Apple embodies most of the principles outlined in literature.

(Slack et al 2007) described concept generation as the brains of design operation and in Apple`s case this is most certainly true because Apple success is built around its outstanding product and service designs. Steve Jobs founder and CEO of Apple said in his launch speech of iPhone that “we surveyed the market, listened to the customers, listened to what they really wanted from a Smartphone and realized that no one in the market was providing what they needed, that is when we decided to enter phone market” (apple.com), this is in accordance with (Leonard et al 1994) which emphasizes on the importance of listening to customers. (Beddows, 2001) described that idea from staff as an important part of concept generation, and in the case of Apple it was reason for the creation of iPod`s, (Schlender, 2001) reports that a staff member of Apple raised the question about the portability of the music players available at the time, and after extensive study of the market Apple realized that existing digital music players were big and clunky or small and useless with awful user interfaces, that was when Apple decided to develop its own version of portable digital music player. R&D has always been the strongest asset of Apple since its beginning even in the early years when the only product Apple had was its Macintosh computer, (Slack et al 2007) regards R&D as an integral part of concept generation and Apple certainly agrees with that cause Apple spends $ 700 Million per year on its R&D development (apple.com). Apple is in a unique position as it embodies a very revolutionary and innovative approach towards its product and service design and because of this uniqueness it cannot get ideas from customers and neither can it learn from its competitors because at concept generation stage it has no competition to learn from. (Wray & Johnson, 2009) reckons that this is and has been one of Apple biggest drawbacks that its competitors learn from it and produce something similar, iPhone was the first of its kind multi-touch phone, but now every major phone company has a touch screen phone similar to the iPhone.

Apple differs widely from concept screening literature in (Slack et al 2007) and especially from the design funnel model. Steve Jobs when presenting iPhone to the world said that “we started off with just one design but as we progressed design options seemed limitless” (apple.com), this contradicts directly with the (Slack et al 2007) design funnel model.

Apple is in compete agreement with (Karl et al 2000) description of preliminary design, the genius of Apple was to produce designs that can be incorporated in different products e.g. iPod touch, iPhone, and iPad (apple.com). Apple follows the same approach as described by (Slack et al 2007) to reduce complexity and cost in a design, all of Apple`s products use similar software e.g. iTunes is used in all of Apple`s products, similarly all of Apple`s designs use the same hardware components e.g. touch screens, battery, processors etc. (apple.com).

Apple differs a bit from (Slack et al 2007) description of prototyping and final design. In the literature there is a lot of emphasis on computer-aided design (CAD) and for most companies it holds true but Apple has a very keen eye for aesthetics, all of their products have one similar theme i.e. that they are very aesthetically pleasing, for this purpose Apple uses physical models to determine the quality of the their design.

Critically evaluate the contribution of the chosen topic to the organization’s performance.

Apple throughout its history was known for innovation and breakthrough designs, Apple`s aim is to be design perfect. Steve Jobs founder and CEO of Apple explained the philosophy behind their designs by saying that “every once in a while a new revolutionary product comes along that changes everything, it changes the whole perspective and that is what Apple strives for” (apple.com).

Macintosh

The first Macintosh was introduced in 1984; it was the first commercially successful personal computer to feature a mouse and a graphical user interface (GUI) rather than a command-line interface (Polsson, 2006). Steve Jobs in his interview said that “Macintosh, it didn’t just change Apple it changed the whole computer industry” and many (Polsson, 2006) agrees with him by pointing out the fact that Macintosh launched the era of desktop publishing. Innovative design was at the heart of Macintosh design which introduced Apple to the world. (Slack et al 2007) said that design of products and services leave everlasting impression on customers, Apple has taken full advantage of this fact by introducing ingenious designs throughout the years thus creating an extremely devoted customer base.

iMac

Apple further strengthened its position as a market leader in innovation and revolutionary design by introducing iMac in 1998. Apple described iMac as all-in-one Macintosh computer, the beauty of iMac was in its design it was the first computer that introduced the concept of personal computer as a single unit rather than two separate units including a central processor unit (CPU) and a monitor. Apple changed the way people perceived personal computers for the second time in less than 15 years this shows the amount of effort Apple puts in its research and development program. (Swartz, 2000) reporting for Forbes magazine described the original iMac as being an “industry-altering success”. Product and service design is the sole reason of Apple`s success as explained by Steve Jobs in his opening presentation of iMac (peestandingup, 2007). There`s a lot of emphasis on R&D in product and service design literature, (Slack et al 2007; Karl et al 2000) pointed out that a good R&D department is necessary for any company`s survival. Apple has proved this fact right time and time again. Diagram below shows how Apple captured the market with its iMac design, and how it re-invented it again and again making it better every time (apple.com).

Figure 1.6

1998 – Original iMac

2002 – First Re-design

2004 – Second Re-design

2007 – Third Re-design

Apple`s iMac introduced the world to simple computing, making personal computer easy for everyone, Apple achieved all this because of its superior designs.

iPod

There are very few companies that contributed as much towards technology innovation as Apple did, in 2001 Apple took all world by surprise by introducing its revolutionary and highly innovative portable media device called iPod (apple.com). product and service design was once again in the heart of Apple`s iPod, Steve Jobs in his opening presentation of iPod (peestandingup, 2007) said that the most important thing about iPod is its revolutionary design. (Marshal, 2006) reported that iPod`s command an enormous 90% of the U.S digital audio market and 70% of worldwide digital audio market. Apple`s iPod has won numerous awards for its design and by the end of 2009 it sold over 260,000,000 units worldwide (apple.com). Sales chart (apple.com) below shows the impact of iPod.

Figure 1.7

Apple is a market leader because it constantly re-invents itself, diagram below shows Apple`s constant improvement of iPod.

Figure 1.8

Model

Generation

Image

Release date

Model

Generation

Image

Release date

Classic

First

2001

Mini

First

2004

Second

2002

Second

2005

Third

2003

First

2005

Fourth

2004

Second

2006

Fifth

2005

Third

2007

Sixth

2007

Fourth

2008

Shuffle

First

2005

Fifth

2009

Model

Generation

Image

Release date

Model

Generation

Image

Release date

Shuffle

Second

2006

Touch

First

2007

Third

2009

Second

2008

Third

2009

iPhone

Steve jobs when launching iPhone said that “we looked at the smart phone market and realized that every major company has a similar phone design” (peestandingup, 2007). Excellent product and service design allowed Apple to conquer the Smartphone market. Apple changed the whole outlook of Smartphone industry in 2007 by introducing iPhone, Apple staying true to its philosophy designed a revolutionary phone that had no rival, and this proved to be extremely successful for the company which has since sold more than 50 million units worldwide. Diagram below compares iPhone with the smart phones of that time.

Figure 1.9

Motorola Q Samsung F700 HTC Advantage Nokia E61i

iPhone

Apple`s iPhone revolutionized the way people use their mobile phone, it was all possible because of an ingenious design, but Apple R&D team didn’t sit back after the launch of iPhone they worked hard day and night to make the product even better, iPhone has re-designed its model three times up till now to make sure that it stays on top of the game.

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iPad

Apple launched a revolutionary desktop computer (iMac), digital audio player (iPod), a phone (iPhone) and in 2010 Apple decided to change the way people used their notebooks by introducing iPad (apple.com). Once again product & service design was at the core of Apple while inventing iPad, and once again it proved highly beneficial for the company as iPad sold more than 1 million units in just 28 days (apple.com). Diagram below compares the design of a notebook with iPad.

Figure 1.10

iPad Notebook

Conclusion

Apple gained commercial success in 1984 by introducing the original Macintosh, but that success was short lived as Microsoft and IBM took over the software and hardware markets respectively (apple-history.com). Steve Jobs in an interview (peestandingup, 2007) said that “Microsoft and IBM were successful in the 80`s and 90`s because of their business strategy not because of their innovation, Apple is built on the philosophy that innovation has no competition”, these remarks by Steve Jobs certainly hold true if we look at the history of Apple, with all their products Apple set a benchmark for competitors and in some cases e.g. iPhone, iPod it took competitors a considerable time to produce a rival product. Apple made its reputation on its ingenious product and service designs that took its products from being a niche market to a mainstream one.

What recommendations would you make to improve the performance of the company in the area of the topic selected?

Apple is known for its product and service design excellence (cebit.de), so giving recommendations that will improve Apple`s performance is quite hard. Apple is probably the only company that is considered a market leader in every sector it ventured into; weather its desktop computing or telecommunications. Below are the recommendations that Apple could follow, these recommendations are based on literature citied in the reference.

Recommendation 1

Problem: Apple has a very strict rule about copyrights Steve Jobs said in an interview (peestandingup, 2007) “we have over 500 individual patents for iPhone”, even after these extreme measures Apple`s products are copied by its competitors.

Solution: Apple requires a much more firm approach towards copyrights; Apple has currently 10 cases pending against Major Corporations including (Microsoft, Sony, HTC, Nikon etc.) for patent infringement. Apple must see these cases through so that a precedent can be set for patent infringement.

Effects: Apple will dominate the market even more than it already does.

Recommendation 2

Problem: Apple is extremely sensitive about its products, customers see the product when its launched by being so secretive about their products Apple is missing an important factor in concept generation i.e. ideas from customers ((Michael 1995).

Solution: Apple should use focus groups to learn from customers.

Effects: Apple is at the height of innovation but still a revolutionary idea can come from any source, in the critical review we looked at how one customer’s idea made possible the microprocessor chips we use today.