Introduction to Product

Development
Prof. V N Achutha Naikan
IIT Kharagpur
 IM43001 Product Development
(3-0-0 : 3)
Basic Concepts, Alternative Product Strategies, Steps in
new product development, Technology forecasting,
Sales forecasting, Product design, Life Testing, Quality
and Reliability considerations, Manufacturing and
maintenance, Defining product market structure,
Consumer perception and product positioning.
 Books on Product Development
1. Product Development and design for manufacturing
- John W. Priest, Jose M. Sanchez
2. Engg. & Product Development Management
- Stephen C. Armstrong
3. Product Design and Manufacturing
- A.K. Chitale and R.C. Gupta
4. Essentials of New Product Management
- Glen L. Urban, John R. Hauser, Nikhilesh Dholakia
5. Problems of Product Design and Development
- C. Hearn Buck
6. Hand book of New Product Development
- Peter Hilton
7. Product design and development
- Ulrich, K T and S D Eppinger
 1. Introduction to PD: Some Success Cases
• Dominant mode of urban transportation in Europe was street car railway- fast,
reliable, cheaper
• In 1910 Henry Ford designed a personal car- slightly higher cost, more flexible –
great success-automotive industry was born
• Michelin, French tire maker – radial tires- with tough quality standard,
aggressive marketing campaign- great success
• When US started producing radial tires, Michelin reduced the price, and
diversified to heavy duty ($ 2 bn) applications
• Communications: AT&T was leader. 1980 MCI Communications introduced
low cost long distance call services, immediately captured 4% Market (in 3
months)
• Medical Diagnosis: General Electric-USG has almost replaced usage of harmful
X-rays
• $ 5 bn Shampoo market:
– 1970s-Johnson&Sons-Agree Crème Rinse to “stop greasiness”
– Gillette
- For oily hair only shampoo- (12-24 age group),
- For oil replenishment, hair loss, styling-Mint oil shampoo (19-49 age group)
– 1980s, Gillette- “Silkience”-self adjusting shampoo
 Why Product Development?
•Industrial Products and Consumer Products
•Why PD ?
–Make More Profits
–Excess Capacity of production system
–Business needs have changed
- cost cutting, new material, process, machines, technology
–World competition, Travel/tourism, Growth of global communication
–Effective Competition in dynamic market
–Needs and desires of consumers are not static
–Scientific Advances / Technology changes
–Success of any product is only temporary
–Statuary compulsions
–Tax benefits
–New situations and opportunities
•This requires effort for
Finding, screening, producing, testing, packing & marketing new products
 How does a product succeed?

Winning features
• Superior
• Cheaper
• Distinctive
• Marketing strategy
This requires innovative ideas
 Some Failure Cases
• Ford motor company – (ill-conceived automobile) Edsel –
lost 100M$
• GM – abandoned Wankel Rotary Engine- 100M$ invested
• Bowmar – Calculators – 50M$
• DuPont –Coir foam substitute for leather-400M$
• General Mills – (Line of snacks) Bugles, Daisies, Butterflies-
M of $
• Gillette – (Facial cleansing cream) Happy face – M of $
• Osborne – First portable PC – went bankrupt 1983
• IBM – Stopped manufacturing PC Jr.-heavy losses
 There is also risk !
• Failure rates of new products are substantial
• 20-25% of Industrial products fail

• 30-35% of consumer products fail

•PLC is getting shorter

•Technological changes render products obsolete very fast rate

•Investments are required in R&D, Engineering, prototyping,

testing, test marketing, etc, much before product introduction.
 There is also risk ! Expenditure on PD
•R&D - before products introduction
• Engg. & Tech. - some times products are not actually
• Marketing introduced

•1 out of 7 new ideas only materialize

• Innovation is a high risk activity
• Investment on R&D, engineering, prototypes, test marketing
is needed. Some products are not even introduced after much
investment
• 46% of resources on new PD are allocated to failed
products in the market
 Class Tutorial 1
Tutorial Date
1 Consider the following Product 16-August-2021
Categories:

1. Automobile
2. Computers and Communication
3. Electricity and Power
4. Food
5. Medical Diagnosis

A. Name any one successful product in

any of the above categories.
B. In your opinion, what are the winning
features of this product?
Answer in one page only.
End