1. CHAPTER 11 THE PRODUCT-INNOVATION PROCESS

2. THE THREE LEVELS OF A PRODUCT
Core Product
Installation
Actual
Product
Packaging
Brand
Name
Delivery
/ Credit
Core
Features
& Options
Benefit
Augmented
Product or
Service
After
Sale
Service
Quality
Styling
Warranty

3. GOOD, SERVICE, & PRODUCTS
Product : anything that an organization can offer to a market for attention, acquisition, use, or consumption that might satisfy a want or a need (good+service)
Three Levels of a Product
Core : essential benefit or service
Actual : tangible parts - packaging, features and options
Augmented : intangible part - life insurance, after-sale service
Consumer product vs. Industrial product

4. DESIGNING SERVICES Attributes of services Intangibility Perishability
Simultaneity
Heterogeneity (다양성보장)
Idea의 원천(기업 내)
Vector marketing : latent demands
service delivery system : network
Types of service buyer (Fitzsimmons) : target
Economizers
Convenience seekers
Personal care seeker
Ethical/loyal customers

5. MATRIX OF SERVICE PROCESSES
Customization
Low
High
SERVICE FACTORY
Airlines
Trucking firm
Hotel
Resort and
Recreation firm
SERVICE SHOP
Hospital
Auto repair shop
Other repair services
Low
Labor
Intensity
MASS SERVICE
Retailers
Wholesalers
Schools
Retail banking
PROFESSIONAL
SERVICES
Doctors
Attorney
Accountant
Architect
High

6. AN OBJECT/LOCATION SERVICE CLASSIFICATION
What is
Serviced
Person
Thing
TV viewing
Employee training
Swim lessons
Pizza delivery
Police protection
Horse shoed
Lawn care
Computer repair
Catering
Garbage collection
Customer’s
Site
Where
Serviced
Exercise clinic
Loan deal
Legal services
Movie theater
Health care services
Beauty salons
Dry cleaning
Tax preparation
Stock sales
Pizza preparation
Goods transportation
Server’s
Site

7. PRODUCT ARCHITECTURE ISSUES
At the start of the product innovation process, top management must decide certain product architecture issues. Namely:
How can a standardized product meet the core needs of targeted customers
How Can a standard product comprised of a flexible set of optional functional modules satisfy the needs of buyers who want a customized product?
How Can a product design be divided into separate modules?
How should these modules interact with each other?
How much technical risk should the design of each module take?
How much reserve capacity should the design of the overall product and its modules have?
Which of these modules should be designed by outside designer/suppliers.

8. PRODUCT STANDARDIZATION
Mass manufacturing has long sought to make standard products from standard parts. In doing so, they sought to gain the following:
Lower product design costs(common design, unwanted feature)
Lower component design costs(vendor’s expertise)
Lower production costs(large batch, inventory-efficiency)
Lower delivery costs(transportation)
Quicker deliveries(inventories sites near customers)
Brand recognition economies of scale
Simplified comparisons(mail-order purchase)
Stronger consumer protection

9. MASS CUSTOMIZATION
Mass customization seeks to achieve high levels of product customization while retaining the economies of scale of mass manufacturing. It seeks to do this by:
Offering standard product with customized services
Customize product at the point of delivery
Assemble standard, modular components into customized final goods and services.

10. MODULA DESIGN Modular product designs
Concentrate all function in a single, special-purpose unit
Develop a module to perform each function
Technology of different modules
Modular Design Interface : Open architecture –vendor
Technical Risk : Business decision
Placement of reserve capacity in a modular design -capacity shortfall
In-House VS. Outside Module-make or buy

11. SEQUENTIAL VS. CONCURRENT ENGINEERING
Shortcomings of Sequential process
much time(outdated), much cost(rush job)
Quality problem(product recall)
Communication(committees,paper 필요), perspective(customer)
Concurrent engineering의 성공요인
Leadership
Teamwork
Communications
Simultaneous development

12. ORGANIZING FOR WORLD-CLASS PRODUCT DEVELOPMENT
The product development strategy
Process Inputs
Technology assessment and forecasting
Market assessment and forecasting
Technology strategy
Product/market strategies
Technology Strategy
Technology Assessment and Forecasting
Project Management and Execution
Postproject Learning and Improvement
Goals and Objectives
Aggregate Project Plan
Market Assessment and Forecasting
Product/Market Strategy