Product design

Product Design

RAHUL BABAR

What is product design ?Product design is the process of creating anew product to be sold by a business to its

customers.

It is essentially the efficient and effective generation

And development of ideas through a process that leads

to new products.

Why is product design concept used ?

Profit Maximization in Long run

Upgrade desired product quality

Reduce development time and cost to minimum

Ensure producibility or manufacturability

Steps in Product Designing

Idea Generation

Customer & competitor

research

Brainstorming sessions

Surveys

Customer input

Research & Development team

Concept screening

Is there a real, clearly defined customer need or want for this product or service ?

Can we fully develop this product or service ?

Is the profit potential for this product large enough to justify it’s development ?

Competitive analysis“ Best of ” ideas are

incorporated to mitigate any competitor advantage.

Verify buyer market size for similar offerings to validate development investment.

Concept TestingPrinciple target is to

quantify actual customer enthusiasm for the product or service.

Get solid feel that the market of buyers is genuinely interested in the concept before we develop it into a tangible offering

In-depth analysisFormal list of features &

benefits, key USP (unique selling proposition), etc.

Summary of all resources needed for development.

Marketing plan with ROI projections.

Summary of competitive products, pricing, packaging etc.

Prototype Development

Product name, specific marketing messaging, etc, are solidified.

Prospective buyers review the prototype and asked if they like it, would they buy it, what would make it better, etc.

CommercializationThe product is finalized and launched full scale

iPhoneApple

ResistiveTechnology

CapacitiveTechnology

Manufacturing Cost Estimates

Flash Memory & RAM  $20.85

Display & Touchscreen  $44.00

Processor  $17.50

Sensors  $6.50

Cameras  $18.00

Cellular Radio  $34.00

Wireless Radio $5.00 

Battery  $4.50

Power Management $8.50

Mechanical Parts  $33.00

Packaging  $7.00

Production $8.00

Licensing Fees $20.00

Total Cost  $226.85

Operating Cost Estimates

Research & Development

$18.85

Software & Administrative

$42.33

Total Cost  $61.18

 The Total Estimated Cost

Manufacturing $226.85

Operating Expenses

$61.18

Wholesale to Retail Markup

$68.90

Total Cost $356.93

R&D cost of US$ 150 million

Total Cost per piece $356.93

Price per piece $599

Profit per piece $242.07

Sold 6.1 million first generation iPhone units over five quarters

By the end of 2010, a total of 73.5 million iPhones were sold.