Week #5: Product Development Management

Post Diamond Shreddies

This week I really enjoyed the video by Rory Sutherland on intangible value creation.  His ideas are very original, and I admire his off-the-cuff thinking and hilarious quips.  The “Diamond Shreddies” perfectly exemplifies the idea of intangible value creation through marketing techniques.  I do, however, think this type of value creation lends itself well to the UK culture versus the US.  My favorite other notable excerpts were the idea of a “placebo education” and “impulse saving”.

I work within the area of Product Development, so I’m well versed in the 8 steps of the new product development process and developing a product for the entire lifecycle.  But… the ideas of branding, brand equity, and positioning are fresh learning opportunities for me.  Likewise for the idea of product “levels” – I haven’t previously considered the three levels of a product (Core, Actual, and Augmented).

Within the automotive industry realm, let us consider the idea of product levels.  A car provides the core level, which is meeting the transportation needs of the customer and transporting them from point A to point B.  The actual product would be the car or truck itself.  Finally, the augmented product level is the support structure of the dealership network to provide service and parts/customization support for the vehicle, as well as any peripheral services used in the vehicle such as Onstar or XM/Sirius satellite radio.

Staying on the XM/Sirius thought, I think these services are on their way to becoming obsolete.  As vehicles become connected to the internet, satellite radio is quickly being replaced by services such as Pandora that do not require a monthly subscription.  Other once-popular products that have become obsolete are the tube television (I just sold my last one at a yard sale for $10), the Palm Pilot (given away at the same yard sale), and records/tapes/CD’s as digital media (MP3’s) have taken over.  In the video world, streaming video is quickly rendering DVD’s obsolete.  My wife and I routinely rent and stream movies, rather than run out to a brick-and-mortar store to rent a physical DVD.

One string that ties many of my thoughts above together is technology.  Technology seems to be moving forward at an incredible pace, and the general buying public can’t get enough of it.  This has, in turn, shortened product lifecycles and forced companies to keep pace or risk losing business to competitors that are on the cutting edge.   Consequently, several steps of the product development process end up being performed concurrently, and in some cases, eliminated completely.   Within the auto industry, the trend is to eliminate uber-costly prototypes and complete all development and testing via analysis and simulation tools.  Examples such as this prove that the product development process is definitely being altered by shorter product lifecycles.

The product development lifecycle has most certainly been affected by the advent of new technology.  Of course communications have improved with the advent of email, texting, and handhelds/tablets, and that has a large effect on each step of the product development process.  However, I think the largest gain has been in the concept development phase.  Technology has made it possible to design products in the digital world with CAD (computer aided drafting), test them analytically via simulation, and then rapid prototype them in the same day. 

Opel Astra by Dosch Design

Thinking about new vehicle development, we no longer mock up full-size clay prototypes – everything is done in CAD.  Virtual reality tools now allow us to open the door and actually sit in a vehicle before any hardware exists.  A full-scale replica can be constructed in a matter of days, and this has greatly shortened the product development process and associated product lifecycles.  Crash testing and manufacturability studies can be carried out in hours rather than weeks.  Vehicle lifecycles used to be 8-10 years, and now a new version of a vehicle is expected every 3-4 years by our customers.

I look forward to learning more about how to effectively create a brand and strengthen brand equity.  I see this as a huge tool that all aspects of a company should collaborate on together.