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THE PROCESS OF PRODUCT AND
PACKAGING DEVELOPMENT
Rahim Jabbar
19 June 2007
PRODUCT DEVELOPMENT FOR GLOBAL MARKET
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Main Discussion (1)
The Reasons and Scope of Product Development
The Reasons for the Need of Product Development
Some Goals of Product Development
Product Development Stage (PD)
The Cycle of Planning and Implementing Product
Development
Technical and Economical Tests for Each Stages of Product
Development
Assessment ofOpportunity Costs
Key Questions in Product Development
THE PROCESS OF PRODUCT AND PACKAGINGDEVELOPMENT
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Main Discussion (2)
Product DesignDefinition of Product Design
Inputs for Product Design
Consumer Awareness Product Vision
Understanding Product Vision
Understanding Product Concept
Understanding Product DefinitionProduct Design: Vision, Concept and Product Definition
THE PROCESS OF PRODUCT AND PACKAGINGDEVELOPMENT
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Main Discussion (3)
Examples of the Format of Product Design
Product Vision
Product Concept
Product Definition
Product PackagingDefinition
Packaging for End Consumer
Packaging for Shipping
Packaging from Marketing Standpoint
Packaging Materials
Packaging for Export Market
THE PROCESS OF PRODUCT AND PACKAGINGDEVELOPMENT
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Main Discussion (4)
Principles of Good Designs
Creating Product Design Exercise
Child Toy
Leather Shoes
Muslim(ah) Clothing
THE PROCESS OF PRODUCT AND PACKAGINGDEVELOPMENT
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THE REASONS AND
SCOPE OF PRODUCTDEVELOPMENT
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The Reasons for the Need of Product Development
TARGET
CUSTOMER/
CONSUMER
SEGMENT
Product ofCompetitor
B
Product of
CompetitorC
Product of
CompetitorA
Product ofCompetitor
D
Your
Product
MANUFACTURING METHODS&TECHNIQUES
(MANUFACTURINGTECHNOLOGY)
RawMaterials
RawMaterials
CHANGES TO CUSTOMERS,COMPETITOR PRODUCTS, MANUFACTURINGTECHNIQUES AND RAW & SUPPORTING MATERIALS CHANGES THE COMPETITIVE POSITION OF YOURPRODUCT NEEDS CONTINUOUSDEVELOPMENT TO MAKE IT A
PREFERRED CHOICE FOR CONSUMERSKandungan Isi Makalah ini Merupakan Hak Cipta Rahim Jabbar
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Some Goals of Product Development
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CUSTOMER SEGMENT OR TARGET MARKET
OLD NEW
P
R
O
D
U
C
T
O
L
D
CONTINUOUSPRODUCTDEVELOPMENT
DEVELOPMENT OF OLDPRODUCTS FOR NEWMARKET SEGMENTS
N
E
W
DEVELOPMENT OFNEW PRODUCTS FOROLD MARKET
SEGMENTS
DEVELOPMENT OF NEWPRODUCTS FOR NEWMARKET SEGMENTS
PRODUCT DEVELOPMENT IS ABSOLUTELY NEEDEDTO STRENGTHEN MARKET POSITION AND TO DEVELOPMARKETS
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SCOPE OF PRODUCT DEVELOPMENT
PRODUCT DEVELOPMENT IS A SERIES OF
ACTIVITIES TO BRING NEW PRODUCT CONCEPTS
INTO A FINISHED RESULT WHICH IS SALEABLE AND
READY TO BE MARKETED
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TECHNICAL STAGES OF
PRODUCTDEVELOPMENT
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THE CYCLE OF PLANNING AND IMPLEMENTATIONOF PRODUCT DEVELOPMENT (PD)
PRODUCTDEVELOPMENT
IDEA GENERATORDEVELOP IDEAS
PRODUCT
DESIGN
PRODUCTMANUFACTURE
PRODUCT
LAUNCHING
RESULTEVALUATION
Continue/Repeat
STOP
Continue/Repeat STOP
Contiune/Repeat
STOP
IS PRODUCTSMOOTHING AND
RENEWALFEASIBLE?
NO!
YES/OK!
FailsTesting
FailsTesting
FailsTesting
YES/OK!
YES/OK!
YES/OK!
?
?
?
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TECHNICAL TESTS FOR EACH STAGE:WHETHER THE IDEAS/DESIGNS ARE
TECHNICALLY FEASIBLE
Are the rawmaterials easy to
obtain?
Can we obtainManufacturing
Techniques and
the necessaryequipment?
Estimate rawmaterials costs
Estimate purchasecosts of equipment
and training
Review whether
the total costsworth the
overall benefits
OK
NEXT STAGE
REVIEW
??
!!!
??
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ECONOMIC/BUSINESS TEST FOR EACH STAGE:COSTS VERSUS BENEFITS
Determine the typesOf costs related to
product development(including
the cost of risk)
Define the benefits
of productdevelopment
Estimate thefinancial value of
all costs
Estimate the
financial value ofall benefits
Review total costsversustotal benefits
OK
NEXTSTAGE
REVIEW
??
!!!
??
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ASSESSMENT : OPPORTUNITY COST
Dont forget about opportunity cost, which ispotential benefits lost if the company does notstart product development
Usually, an insightful Small-Medium-Enterprise (SME) level businessperson will
calculate opportunity costs thoroughly
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KEY QUESTION
The main question of SME business-person isnot whether to conduct product development,but rather :
How can product development be conductedaccording to our business conditions and in amanner that best fits the wants and needs ofthe target market, in order to obtain maximum
effectiveness with the most efficientfunding?.
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PRODUCT DESIGN
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DEFINITION OF PRODUCT DESIGN
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Product Design is the result of the product design process(which is a part of Product Development) that consist of aseries of technical activities in three stages as follow:
Understanding inputs on the business opportunitiesof new product designs
Developing Concepts and Product Definitions
Applying the Product Concepts (Making the Product)
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TARGET MARKETSEGMENT:
WHAT ARE THEIRSPECIFIC NEEDS OF
THE PRODUCT
YOUR PRODUCTDESIGN
(To be developed)Strengths & Weaknesses
of your currentproduct
COMPETITORSPRODUCTS
(Existing)
COMPARISON:ATTRIBUTES, UTILITIES,
USES, BENEFITS
COMPETETHROUGHUNIQUENESS
ConsumerInsights
PRODUCT STRATEGY INPUTS FORPRODUCT DESIGN
ProductVision
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CONSUMER INSIGHTS PRODUCT VISION (1)
Awareness and understanding about target
consumers/customers is usually gained through Consumer
Research and Study of Competitors Products.
Research may be Qualitative Research or QuantitativeResearch. (Both require significant funding).
SME Businesses can conduct simple and cheap research
through(1):Observing customers/consumers that use your products and
trying to understand the whats and whys
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CONSUMER INSIGHTS PRODUCT VISION (2)
SME Businesses can do a cheap research through (2) :
Placing yourself in the consumers/customers shoes (role
playing) and asking yourself what you would want if you
were to use the products for yourself. You can go through the
stages of asking what, how, and why until you find the
essence of what you want out of the product.
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CONSUMER INSIGHTS PRODUCT VISION (3)
SME Businesses can do a cheap research through (3):
In-depth interviews conducted by yourself of a person
representative of the customer group (perhaps by buying
lunch). The interview is done through staged questions(i.e. what,how, why) until you can figure out what the
interviewee wants and what values are most important to
him/her.
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CONSUMER INSIGHTS PRODUCT VISION (4)
SME Businesses can do a cheap research through (4):
Studying the products of competitors, if necessary including
taking them apart and breaking them down to understand what
are they made of and the methods of manufacture. This is useful
to compare and find out the strengths and weaknesses ofcompetitors products.
(Story of an entrepreneur whos able to reach the same
conclusion both through high-cost research and throughpersonal interviews and in-depth contemplation which both
eventually become a deep and wide awareness of his product)
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UNDERSTANDING PRODUCT VISION (1)
PRODUCT VISION ANSWERS THE QUESTION:
WHAT KIND OF PRODUCT DO WE WANT TO MARKET?
WHAT ATTRIBUTES ARE NOT AVAILABLE IN OUR AND
COMPETITORS CURRENT PRODUCTS, WHICH WE WILL
THEN MAKE AND MARKET, BECAUSE THEY ARE WANTED
BY THE CONSUMERS?
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UNDERSTANDING PRODUCT VISION (2)
PRODUCT VISION ANSWERS THE QUESTION:
WHAT OR KINDS OF DIFFICULTIES OR DRAWBACKS
CAN BE FOUND IN CURRENT PRODUCTS THAT YOU
WANT TO REDUCE OR ELIMINATE?
(REMEMBER: EVERY CONSUMER KNOWS EXACTLY
WHAT HE/SHE WANTS OUT OF YOUR PRODUCT. AS A
BUSINESSPERSON YOU CERTAINLY WANT TO
STRENGTHEN YOUR POSITION IN THE MARKET. THIS
CAN BE DONE AMONG OTHER THINGS BY
DEVELOPING QUALITY PRODUCTS THAT ARE
PREFERRED BY CONSUMERS.
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UNDERSTANDING PRODUCT CONCEPT
PRODUCT CONCEPT IS A WRITTEN DOCUMENT OFDESCRIPTION/EXPLANATION WITH SCHEMATICS OF A NEW
PRODUCT IDEA OR OF AN IMPROVEMENT OF OLD PRODUCTS.
THE DESCRIPTION/EXPLANATION INCLUDE ATTRIBUTES,
FUNCTIONS, USES AND THE BENEFITS OF THE PRODUCT TO
THE TARGET CONSUMER, ALONG WITH A GENERAL
EXPLANATION OF RAW MATERIALS AND SUPPORTING
MATERIALS USED AND THE METHODS/TECHNIQUES OF
MANUFACTURE (PRODUCTION TECHNOLOGY).
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UNDERSTANDING PRODUCT DEFINITION
PRODUCT DEFINITION IS THE ENLARGEMENT OF THE
PRODUCT CONCEPT WHICH INCLUDE TARGET SEGMENT,
POSITIONING STRATEGY, PRICE RANGE, DESIGN
SPECIFICATIONS, EVEN SALES FORECAST
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PRODUCT DESIGN:PRODUCT VISION, CONCEPT AND DEFINITION
Product Vision:Which consumer problems or
difficulties do you seekto fix by a new product?
What are the drawbacks ofcurrent products in the market
that you want to fix or eliminate?What new things do you
Want to offer?
Product Concept:Explanation and rough
description of new productideas or improvements
to old products.Include attributes, functions,
uses, target consumers,utilities for consumers,
Manufacturingmethods/techniques
Product Definition
Positioning strategy,price range,
design specification,sales forecast
CONSUMER
AWARENESS
ADDED
WITH INPUTS
FROM
MANUFACTURING
ASPECTS
ADDED WITH
INPUTS FROM
MARKETING
ASPECTS
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SAMPLE FORMAT OF
PRODUCT DESIGN
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SAMPLE FORMAT OF PRODUCT DESIGN (1)
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Product Vision:We ( Small Business XYZ) intend to produce healthymarkisa juice extract packaged in attractive packagingReason: most markisa juice extract products in the markettoday is not suitable for customers who want to keep theirblood sugar level in check, or for customers who want to
limit their carbohydrate intake, since current productsavailable in the market utilize ordinary sugar as a sweeteneragent.Moreover, markisa juice extract products are typicallypackaged in standard glass bottles (similar to typical soybean sauce products)
(Note: Both aspects mentioned in the product vision are ideasources for the development of markisa juice extractproduct.Juice extract is produced from the squeezing or squashing offresh mature fruits.
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SAMPLE FORMAT OF PRODUCT DESIGN (2)
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Product Concept:Healthy Markisa juice extract product is to provide the goodnessof fresh markisa fruit flavor, sweet enough for consumers who areconscious of their blood sugar level. This juice drink is a tasty thirstquencher that is also healthy.
This markisa juice extract contains lower levels of calorie since it
uses 75% artificial sweetener aspartame and 25% sugar. (For 1 (one)liter of clear markisa juice extract typically 200 grams of fine sugarflour is used);For the Healthy Markisa Juice Extract, aspartame is added in theamount equivalent to the sweetness of 150 grams of sugar (which isaround 1.5 grams, since aspartame available in the market is
around 100 times sweeter than sugar of the same weight. (The bestquality aspartame is around be 200 times sweeter than sugar ofthe same weight)
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SAMPLE FORMAT OF PRODUCT DESIGN (3)
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Product Concept (Continued):The benefits of aspartame as substitute for sugar are:Enriching the sauce/taste materials of the drink.Does not cause faster teeth deteriorationUseful for controlling body weightUseful for diabetic patients
This markisa juice drink can become a part of a healthy food &drink diet
Manufacturing technique (Refer to a separate handout paper).Where sugar is required, substitute of its part with aspartameweight of the same sweetness level with the sugar weight
Packaging:Requires attractive bottle design.
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SAMPLE FORMAT OF PRODUCT DESIGN (3)
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Product Definition:
Positioning Strategy:Healthy Markisa Juice Drink is positioned as a healthy anddelicious thirst quencher product with the unique taste of themarkisa fruit.
Price Range:Price range is around 40% to 60% above the price of regular
markisa juice product (Note : this requires costs and pricecalculation)
Marketing Activity:Marketing communication activity is needed in the form ofhandout brochures distributed to customers outlets
Sales Forecast:Initially only a few hundred fiberites of 24 bottles each will beoffered to selected outles. Sales is predicted to increase byapproximately 10% per month. (Note: Monthly sales forecast isneeded.
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PRODUCT PACKAGING
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DEFINITION OF PACKAGING
AN INTEGRATED SYSTEM TO PRESERVE, PREPARE A
PRODUCT TO BE READY FOR DELIVERY ANDDISTRIBUTION TO END CONSUMERS IN THE MOST
EFFICIENT AND CHEAP MANNER
(W.T.O)
PACKAGING (1)
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PACKAGING FOR END CONSUMERS
- PACKAGING IN DIRECT CONTACT WITH ITS CONTENTS &
ITS SIZE IS RELATIVELY SMALL
AS NEEDED- ACTS TO PROTECT ITS CONTENTS FROM OXIDATION IN
THE OPEN AIR AND TO PROTECT AGAINST HUMIDITY AND
SUNLIGHT THAT CAN AFFECT THE PRODUCTS QUALITY.
PACKAGING (2)
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PACKAGING FOR DELIVERY/TRANSPORTATION PURPOSES
- ACTS AS THE PROTECTOR OF A NUMBER OF PACKAGINGFOR END CONSUMERS DURING HANDLING ANDDELIVERY/TRANSPORTATION PROCESS
- AS A TOOL OF GROUPING AND MOVING
- AS EXTERNAL PROTECTOR WHEN THE PRODUCT ISBEING STACKED IN WAREHOUSES OR STORAGE
FACILITIES
PACKAGING (3)
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INNOVATIVE AND ATTRACTIVE PACKAGING IS USEFUL TO
ATTRACT CONSUMERS ATTENTION.
PACKAGING IS ONE OF THE MAIN COMPONENTS OF BRANDED
PRODUCTS MARKETING. PACKAGING ACT AS ETERNAL
PROMOTER OF THE BRAND.
AS SUCH, GOOD PACKAGING CONCEPT MUST TAKE THE
FOLLOWING ASPECTS INTO CONSIDERATION:
CAPABLE TO PROTECT THE CONTENTS OF ITS PRODUCT
THE DESIGN INCLUDES DECORATIVE COLORED SURFACE
MOTIVESAND DISPLAY
LOGO DAN BRAND
PACKAGING (4)
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PACKAGING MATERIALS CAN BE MADE OF:
1. PAPER / CARTON
2. METAL : ALUMINUM, STAINLESS STEEL
3. GLASS
4. LAMINATED FLEXIBLE PACKAGING5. PLASTIC: SOFT, HARD, RIGID OR SEMI RIGID
CHOSEN MATERIALS DEPEND ON PRODUCTS THE
FUNCTION AND PRICE, EASE OF SHAPING AND EASE OFCREATING DISPLAY AND SURFACE DECORATIVE DESIGNS
PACKAGING (5)
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PACKAGING FOR EXPORT MARKET (1)
THE PACKAGING MUST BE ABLE TO PROTECT THE
PRODUCT UP TO A CERTAIN TIME
LIMIT.(INCLUDING DURING TRAVEL, UP TO THE
REQUIRED PRODUCT EXPIRY DATE)
DESIGN MUST BE ATTRACTIVE AND MATCHES THE
CULTURE OF ITS EXPORT DESTINATION COUNTRY
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PACKAGING FOR EXPORT MARKET (2)
PACKAGING AND PACKING MUST CONSIDER LOCAL
HANDLING IN ORIGIN COUNTRYS PORT ALL THE
WAY TO THE WAREHOUSE AND OUTLET
RETAILERS AT THE EXPORT DESTINATION
COUNTRY.
LABELINGMUST BE COMPLETE AND CLEAR.
THE PACKAGING MUST BE ENVIRONMENTALLY
FRIENDLY
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PRINCIPLE OF PRODUCT
DISPLAY DESIGN
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1. A GOOD PRODUCT DISPLAY DESIGN IS INNOVATIVE, I.E
PRESENTING SOMETHING NEW (NOT MERELY
DUPLICATING)
2. A GOOD DESIGN OF PRODUCT DISPLAY ENHANCES THE
USEFULNESS OF THE PRODUCT
3. A GOOD DESIGH OF PRODUCT DISPLAY IS
AESTHETICALLY CONCEIVED
Source: Adapted from Brauns Mission Statement as quoted by Bruce & Jevnaker, Management of DesignAlliances,Sustaining Competitive Advantage, Wiley, 1998 . (The two statements within brackets are the writers addition)
TEN PRINCIPLES FOR THE DESIGN OF PRODUCT DISPLAY(BRAUNS TEN PRINCIPLES OF GOOD DESIGNS*)
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4. A GOOD PRODUCT DISPLAY DESIGN DISPLAYS THE
LOGICAL STRUCTURE OF THE PRODUCT.
DISPLAY FOLLOWS FUNCTION .(Example : Tooth paste tube)
5. A GOOD PRODUCT DISPLAY DESIGN IS UNOBTRUSIVE
6. A GOOD PRODUCT DISPLAY DESIGN IS HONEST
Source: Adapted from Brauns Mission Statement as quoted by Bruce & Jevnaker, Management of DesignAlliances,
Sustaining Competitive Advantage, Wiley, 1998 . (The two statements within brackets are the writers addition)
TEN PRINCIPLES FOR THE DESIGN OF PRODUCT DISPLAY(BRAUNS TEN PRINCIPLES OF GOOD DESIGNS*)
- Continued
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7. A GOOD PRODUCT DISPLAY DESIGN IS ENDURING (WILL
NEVER LOOK OLD/OUTDATED)
8. A GOOD PRODUCT DISPLAY DESIGN IS CONSISTENT TO
THE SMALLEST DETAILS
Source: Adapted from Brauns Mission Statement as quoted by Bruce & Jevnaker, Management of DesignAlliances,
Sustaining Competitive Advantage, Wiley, 1998 . (The two statements within brackets are the writers addition)
TEN PRINCIPLES FOR THE DESIGN OF PRODUCT DISPLAY(BRAUNS TEN PRINCIPLES OF GOOD DESIGNS*)
- Continued
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9. A GOOD PRODUCT DISPLAY DESIGN IS ECOLOGICALLY
CONSCIOUS10. A GOOD PRODUCT DISPLAY DESIGN IS OF MINIMALIST
DESIGN
Source: Adapted from Brauns Mission Statement as quoted by Bruce & Jevnaker, Management of DesignAlliances,
Sustaining Competitive Advantage, Wiley, 1998 . (The two statements within brackets are the writers addition)
TEN PRINCIPLES FOR THE DESIGN OF PRODUCT DISPLAY(BRAUNS TEN PRINCIPLES OF GOOD DESIGNS*)
- Continued
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EXERCISE IN
CREATING PRODUCTDESIGN:
CHILD TOYLEATHER SHOESFEMALE MUSLIM
CLOTHING
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CHILD TOY
Sumber: How to Choose Children Toys, 2005
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LEATHER SHOES
Sumber: How Shoes Are Made
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MUSLIM FEMALE CLOTHING
References (1)
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References (1)
Capon, Noel and James M. Hulbert, Marketing Management
in the 21st Century, Prentice Hall, 2001Davidson, Hugh, Even More Offensive Marketing, Penguin
Books, 1997
Hiam, Alexander and Charles D. Schewe, The Portable MBA
inMarketing, John Wiley & Sons, Inc., 1992
Jabbar, Rahim, Approaches towards Segmentation,
Targeting & Positioning, 2002, (unpublished)
Business Week, 2001, The 100 Most Valuable Global Brands
WIPO, Intellectual Property, A Power Tool for Economic
Growth, 2002, internet edition, accessed 2nd August 2005 through:http://www.wipo/int/about_wipo/gen/wipo.dgo/wipo_pub_888/
html.
http://www.wipo/int/about_wipo/gen/wipo.dgo/wipo_pub_888/http://www.wipo/int/about_wipo/gen/wipo.dgo/wipo_pub_888/8/3/2019 Prod Dev Process for Exp Mkts Arj - English
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References (2)
Kennedy,Carol, Managing with the Gurus, Top level
Guidance on 20 management techniques, Century BusinessBook, 1996
Cowley, Don, Ed. Understanding Brands, Kogan Page 1991
Aaker, David A. Managing Brand Equity The Free Press,1991
Temporal, Paul, Branding in Asia, 2001
Knapp, Duane E, The Brand Mindset, The Mc-Graw Hill
Companies Inc., 2000
Upshaw, Lynn B., Building Brand Identity, John Wiley &
Sons Inc., 1995.
Arnold, David, The Handbook of Brand Management,Century Business, 1992.
Woodruff, Robert & Gardial, Sarah F., Understanding
Customer Values & Satisfaction, Blackwell Business, 2000.