1. Design of Goods & Services KAWTHER ALTANI PREPARED BY | KAWTHER ALTANI

2. Contents  Design of Goods & Services  Introduction  Functions of goods-and-service design  Understanding Goods v. Services  Product development  Where New Product Opportunities Come From  Life Cycle and Strategy  Relative Market Share  Basis of competitiveness

3. Introduction  Operations Management  Operations management (OM) is the science and art of ensuring that goods and services are created and delivered successfully to customers.  design of goods and services = key to organizational survival and success.  Good design all activities connected with introducing new good to the market  Service design all activities connected with introducing new service to the market

4. Functions of goods-and-service design  Clear definition (customers, markets)  Understanding customers long and short-term needs  Linkages between customer & design, production and delivery  Relationships with customers  Complaint management processes  Measurement of customer satisfaction

5. Understanding Goods v. Services Goods are tangible Goods = physical products that you can see, touch, or possibly consume Services are intangible Demand for services is more difficult to predict than demand for goods. Services cannot be stored as physical inventory. Service facilities typically need to be in close proximity to the customer. Patents do not protect services. Services especially in the “front office” (at points of contact with the customer) require different skills than producing physical goods, services must be better at forecasting and demand/capacity planning than goods- producing firms or they will miss a sale.

6. Product development  Steps in product design and development  Planning – development of design strategy. Technology check  Concept development – investigate target market and its requirements  System design - identify all sub-systems required to make up the good/service  Detailed design –specification of good/service. Product and quality specifications.Process plan developed  Testing & improvement – prototype production. Performance evaluation  Production initialization –production commences. Operator training. Product/good launched

7. Where New Product Opportunities Come From  Economic Change  Sociological and Demographic Change  Technological Change  Political / Legal Change  Other Changes

8. Life Cycle and Strategy  Strategies change as products move through their life cycle  Introduction  Growth  Maturity  Decline

10. Introduction Stage  The first stage in a product’s life cycle is the introduction stage. Firms that manufacture products such as cereals, snacks, soap, and shampoos often use mass marketing techniques such as television commercials and Internet campaigns and promotional programs such as coupons and sampling to reach consume During introduction, an organization must have enough distribution outlets (places where the product is sold or the service is available) to get the product or service to customers.  The product quantities must also be available to meet demand.

11. Growth Stage  During the growth stage, firms seek to enlarge the market and capture more customers. Firms are likely to encounter competition from firms that have followed with similar products Unfortunately for the firm, the growth stage attracts competitors who enter the market very quickly

12. Maturity Stage  As the product enters the mature stage, the demand for the product stabilizes and ceases to expand. At this point, the firm invests in production, distribution, and marketing improvements that enhance its ability to maintain or improve its market position. As the market is no longer growing, the firm will generally face the prospect that the overall supply of product will be greater than the demand for the product.

13. Decline Stage  As a product enters the decline stage of the life cycle, the demand for the product begins to diminish. Unless new uses for the product that might reverse the decline are found, it is very likely that manufacture of the product will eventually cease. Certainly, a firm finding itself dependent on a product in the decline stage.

14. Basis of competitiveness  Globalization - NO longer guaranteed a firm base of customers  Technology – keep ahead with latest technology  Outside influences – Government legislation i.e. environmental controls, trade union activity i.e. health & safety measures

15. Basis of competitiveness  Economic indicators – other emerging markets i.e. China  The competition!!  Cost and availability – resources must be right price and quality to enable manufacture of goods at right price and standard

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