Unit-2 Market Survey & Product Specification Finalization

UNIT-02: MARKET SURVEY & PRODUCT SPECIFICATION

FINALIZATION

Syllabus:
Topics- Product definition, Types of products, Customer Population and Market
segmentation, Types of customers and Needs, Customer need Models- Introduction to Kano
Model, Triz Method/Altshuller Matrix, Design Thinking, etc. Types of Design information
and the Various Sources of information, Product planning and its Phases, Mission statement

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and Technical Questioning, Technology forecasting and S-curve, Tools for gathering

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Customer needs, QFD and House of quality

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2.0 Definition of Product & its Types :

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-A product is any offering by a company to a market that serves to satisfy customer needs and

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wants. It can be an object, service, idea ,etc.(Physical, Virtual or Hybrid Products)

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-Basically, a product is the object of the exchange process, the thing which the producer or
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supplier offers to a potential customer in exchange for something which the supplier thinks as
equivalent or greater value.
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❖ Types of Products:
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Generally, products are classified into two types (Based on Marketing & Buying behaviour).
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● Consumer Products (convenience products, shopping products, specialty products,

unsought products).
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● Industrial Products (capital goods, raw materials, component parts, major equipment,
accessory equipment, operating supplies, and services).
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Consumer products Industrial products

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Consumer products are those which are Industrial products are those intended for use in
bought by consumers for ultimate making other products or operating a business
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consumption and not for resale. These or institution. Thus, industrial products are
goods can be further classified based on differentiated from consumer products based on
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how consumers buy them. Consumer their ultimate use. The types of Industrial goods
products include are
1. Convenience products, 1. Raw materials,
2. Shopping products, 2. Component parts,
3. Specialty products, 3. Major equipment,
4. Unsought products. 4. Accessory equipment, operating
supplies,
5. Services.

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2.1 Customer Population and Market Segmentation

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Customer is any person/s or organization that receives a product or services from the
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Manufacturer/Entrepreneur. Customers (and potential customers) can be categorized

according to an almost endless number of variables. Some of the most common customer
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demographics for business purposes include age, gender, geographical location, education
level, marital status, household income, occupation and hobbies. The customer population
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involves the different types of Customers.

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❖ Market Segmentation:
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The division of the market is called Market segmentation. This process involves defining and
subdividing the market into clearly identifiable segments with similar needs or
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[Link] of market segmentation is to design such a market which matches the

expectations of customers in the targeted segment. The four basic factors on which the
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segmentation is done are:-

1. Geographical Differences
2. Demographic
3. Psychographic
4. Behavioral

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2.2 Types of customers and Needs: i (D
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In the retail industry, customers can be segmented into seven main types:
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1. External customers: Customers who use products and services by paying to the
company.
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2. Internal customers: Customers who work at the place of service and products are to
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be sold.
3. Loyal customers: Customers that make up a minority of the customer base but
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generate a large portion of sales.

4. Impulse customers: Customers that do not have a specific product in mind and
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purchase goods when it seems good at the time.

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5. Discount customers: Customers that shop frequently but base buying decisions
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primarily on markdowns.
6. Wandering customers: Customers that are not sure of what they want to buy.
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7. Need-based customers: Customers with the intention of buying a specific product.

Wandering customers: Customers that are not sure of what they want to buy.
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❖ Customer Needs:

A customer need is a need that motivates a customer to purchase a product or service. The
need can be known (i.e., the customer can put it into words) or unknown, and is the ultimate
factor that determines which solution the customer purchases.

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❖ The Types of Customer Needs are:

1. Direct Needs:- These are the Main or Basic needs of customers. Customers easily
declare these needs when asked. They are really concerned about these needs. Ex:
Cost/Quality of the product, Ease of Operation, etc.
2. Latent needs:- These are the Hidden needs of customers. Customers never express
their needs directly. Ex: Obtaining Photos by using a Smartphone.
3. Constant Needs:- These needs do not change with the time. These needs are constant
throughout the life of the product.

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4. Variable Needs:- These needs are varying needs of the customer. As a

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technology/trend changes these needs keep on changing.

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5. General needs:- These needs are common needs of customers. Apply to every person
in the customer population. Ex: Power Window/Steering in Automobile.

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6. Special Needs:- These needs are extremely specific to the customers. Ex: Customized
PCs, Special Luxurious vehicles etc.

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2.3 Customer Need Model:- The Kano Model
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Don’t find customers for your products, find products for your customers. — Seth Godin
The Kano Model has all the answers for you. It is one of the techniques we use in Cleevio for
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identifying customers’ needs. It helps to define the attributes of products and services which
directly lead to better satisfaction. It was developed in the 1980s by Japanese professor Kano,
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and since then, it’s been widely used by marketers and product leaders from all sectors
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Customers are buying products with expectations and needs and therefore, the product's
functionality and features directly impact customers’ emotions. Based on the Kano model,
each product feature can be categorized by their caused effect: Mandatory Features,
Satisfiers, Delighters, Indifferent, and Reverse Features. Let’s take a look at them one by one.

❖ Mandatory Features

Also called “must-haves” or “basic expectations”. These are the baseline features of the
product that satisfy the basic customer needs. They take them for granted and as a
characteristic for its category. For example, when you buy a phone, you expect that it’s

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capable of writing and sending text messages, making phone calls, etc. The presence of

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mandatory features does not lead to happiness or excitement, but their absence leads to a

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strong dissatisfaction. With the lack of emotional affect, they’re difficult to identify just by
asking “What features would you appreciate?” It’s better to ask the other way around:

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“Would you be disappointed if the feature was missing?”

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Performance features increase the satisfaction level when fulfilled and a decrease in the
satisfaction level when not fulfilled. Their fulfillment is often directly dependent on the price
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of the product. A good example of performance features is e.g. smartphone camera

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resolution, storage size, or battery life. Also several questions and responses in different
Survey Monkey plans.

❖ Delighters

So-called excitement/attractive features are often represented by something extra; special

value which customers get despite their requirements. They demonstrate that someone really
cares about customers and thinks about the small details that truly make for a unique
experience. They show above-standard quality and exhibit exceptionality.

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When delighters are missing, nobody complains. If they’re present, they might lead to a
significant increase in satisfaction. These features make the difference between Viable and

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Awesome Products. Customers are telling their friends and family about them and everybody

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loves them. But be careful — delighters will only work when all the basic expectations are
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Customers are slowly getting used to the delighters, and they’re becoming performance
features or even mandatory features over time. A good example is the car air conditioner.
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Originally used in the 1960 Chrysler Imperial as a sign of luxury and unprecedented quality.
Today, every newly produced car has one and it’s considered a baseline feature — nothing
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special.
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❖ Reverse and Indifferent Features

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Both Reverse and indifferent features are those you should avoid in your product. Reverse
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features are opposite to satisfiers — the more of them that you deliver, the less satisfied your
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customers will be. These features are bringing complexity to your product and harm its value.
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❖ Satisfying Customer Needs Using The Kano Model

Step 1: Choose The Right Features and Customers

Step 2: Data Collection
If you had (feature), how do you feel? — Functional positive question
If you didn’t have (feature), how do you feel? — Dysfunctional negative question
Step 3: Analysing The Results
Step 4: Using The Results
END

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2.4 Triz Method/Altshuller Matrix

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TRIZ is the Russian acronym for the "Theory of Inventive Problem Solving," an international
system of creativity developed in the U.S.S.R. between 1946 and 1985, by engineer and

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scientist Genrich S. Altshuller and his colleagues.

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According to TRIZ, universal principles of creativity form the basis of innovation. TRIZ
identifies and codifies these principles, and uses them to make the creative process more
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predictable.
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❖ TRIZ Matrix Basics

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In TRIZ Matrix terminology a problem is often called a contradiction. This is because the
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Russian scientist had found that improving the product in one aspect leads to its deterioration
in another aspect. Let’s assume that we improve the speed of a car by fitting a bigger engine,
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the mileage would take a hit. This creates a “contradiction”. The challenge that TRIZ
addresses is how to get more of one feature without deteriorating the performance of other
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features.
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He also found that most of the “contradictions” faced by different industries are the same. For
example: cost vs speed, accuracy vs speed etc. Since the contradictions are more or less
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similar across the industries, so are their solutions. The makers of the TRIZ matrix
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documented their solutions in what is called the 40 inventive principles of problem solving.
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❖ TRIZ Problem Solving Methodology

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The TRIZ method believes that all technological innovations that have occurred in different
industries have been based on a set of “inventive principles”. TRIZ method states that every
specific problem that an organization faces can be reduced to a general problem that has been
faced before. This general problem then has a general solution based on one of the 40
inventive principles that the matrix contains.
Thus, the use of the matrix suggests the general solution. This general solution can then be
used to come up with a specific solution to the specific problem that the organization is

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facing. The terminology can be confusing and hence an example in this scenario would be
helpful.

● Identify Contradiction: The TRIZ method believes that for something that an
organization wants to gain, it has to sacrifice something. This is what is called a
contradiction in TRIZ jargon. For instance, if you want to build a faster engine, you
lose fuel efficiency. This contradiction is the general problem that an organization
faces and must be used as an input to the TRIZ matrix.
● Determine Improvement and Degradation: The next step would be to explicitly
state the trade-off. In the above case one can look at speed as the improvement

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parameter while fuel efficiency as the parameter which must not be degraded.
● Design Parameters: The TRIZ matrix uses the above information as input. It will

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then cross verify similar problems that have been faced in the past. Then it will give a
general solution an output. This solution could be something like using a lighter metal

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to build the vehicle, so that the weight of the vehicle is reduced and speed is increased

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without losing fuel efficiency.
● Examine Proposed Principle: One needs to understand that the TRIZ method is like

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an advisor. It proposes solutions. However the final decision whether the proposed
solution must be implemented or not lies in the hands of the managers. For instance,
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in the above example using a lighter metal could compromise the safety of the vehicle
being used. The management must then take a call whether this is the correct solution.
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● Select Best Principle: The TRIZ usually gives more than one inventive solution to
the problem. This solution is usually in the form of general solution. The TRIZ matrix
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is popular because it allows organizations to create alternative solutions before they

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actually decide to implement the best one.

● Apply Inventive Principle: Each proposed general solution must then be converted
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into a specific solution for the problem at hand. Thus at the end of TRIZ exercise, the
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management has multiple solutions which it can then provide as an input to the
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decision making process.

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2.5 Design Thinking?

Design thinking is a non-linear, iterative process that teams use to understand users, challenge
assumptions, redefine problems and create innovative solutions to prototype and test.
Involving five phases—Empathize, Define, Ideate, Prototype and Test—it is most useful to
tackle problems that are ill-defined or unknown.

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2.6 Types of Design information and the Various Sources of information

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A design team should gather information on,

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a)The products and related products

b)The functions they perform
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c) The targeted market segments

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1. Solicited(wanted), Measurable, Routine(Regular):-Market Surveys

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2. Unsolicited(Unwanted), Measurable, Routine:- Customer Complaints (Field)

3. Solicited, Subjective(Individual), Routine:- Focus Groups
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4. Solicited, Subjective, Haphazard(Random):- Consultants

[Link], Subjective, Haphazard:- Vendors, Suppliers
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❖ Sources of Design information :

A single designer or even a team of designers cannot have knowledge on all aspects of every
design they attempt. It would not be feasible to acquire expertise in all required areas,
therefore it is necessary to turn to other sources for knowledge and ideas. Fortunately, these
sources are numerous, and thanks to modern communication and the Internet, information

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can be sought globally, often at little cost. Basic Information Sources in Engineering,
suggests some basic guidelines to follow when attempting to locate information.

● Literature: Handbooks, Textbooks, Industry manuals, Trade Magazines &

Research Journals
● Databases
● Yellow Pages
● Catalogs
● World Wide Web
● People :Colleagues, Consultants, Vendors, Customers, Friends/family

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● Organizations: Government, laboratories, Professional Organizations
● Other :Nature, Patents, etc.

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2.7 Product planning and its Phases

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The product plan identifies the portfolio of products to be developed by the organization and the
timing of their introduction to the market. Product planning is an activity that considers both the
current product line and the potential portfolio of projects that an organization might pursue. Product
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planning decisions determine what subset of the possible development projects will be pursued over a
certain time period. The product planning activity ensures that product development projects support
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the broader business strategy of the company, and in doing so addresses these questions:
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● What product development projects will be undertaken?

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● What mix of fundamentally new products, platforms, and derivative products should be
Pursued?
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● How do the various projects relate to the current product line and to each other as a
portfolio?
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● What will be the timing and sequence of the projects?

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❖ To develop a product plan and project mission statements, we suggest a five-step

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process/Phases of Planning are :

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Figure: Product Planning Process

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1. Identify opportunities: The first phase of product planning is developing the product
concept. Marketing managers usually create ideas for new products by identifying certain
problems that consumers face or various customers need. After the product idea is conceived,
managers will start planning the dimensions and features of the product. Some small
companies will even develop a product mock up or model.

2. Evaluate and prioritize projects: The next step in the product planning process is
studying the competition. Secondary research usually provides details on key competitors and
their market share, which is the percent of total sales that they hold in the marketplace. The
business can then determine places in which it has an advantage over the competition to

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identify areas of opportunity.

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3. Allocate resources and plan timing: A small company should consider doing both
qualitative and quantitative marketing research for its new product. Focus groups are an

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example of qualitative information. Focus groups allow companies to ask their consumers
about their likes and dislikes of a product in small groups.

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4. Complete pre-project planning:
● Mission of project to be decided.i
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● Objectives, Constraints and assumptions to be placed on board.
● Business case to be prepared.
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● Stakeholder list to be published.

● Decision matrix based on stakeholder interest to be prepared.
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● Complete pre project planning to be done.

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5. Reflect on the results and the process: Product planning must also include managing the
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product through various stages of its product life cycle. These stages include the
development, introduction, growth, maturity and decline stages.
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2.8 Mission statement and Technical Questioning

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❖ Mission statement:
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The outcome of the technical questioning procedure should be a clear statement of mission of
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the design team. The mission statement, sometimes called a market attack plan, a vision
statement or a product plan. The mission statement is both a calling card & barrier stating the
design team’s intention.

Typically the mission statement is written by a project manager and it is distributed to

all development team members and as the project kick off, to explain what they will be doing.

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Table : Typical Structure of Mission Statement

Product Description A unique Sentence

Key Business or Humanitarian goals ● Task arrangement or Schedule

● Total Profit share
● Percentage market share
● Achievement of advanced human
needs

Preliminary market Small portion of market segment

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Scope for another market ● Look for another markets
● Already achieved market

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Considerations Main consideration or Uncontrolled factors

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to be finalized by customers

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Share holders 1-5 words statements of customer sets

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Scope for creative design Creating scope for innovation by searching
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Scope & limitations Prepare a list of limitations those will put
back the design team from “Solving the
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word”
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❖ Technical Questioning:
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It is the task of gathering additional information. We can go for many developments and
collection of information on many topics. If we want to be focused, then one should question
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the current understanding of the development in that area. Following are the few questions
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that need to be asked and answered frequently throughout the lifecycle of the design process.
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Questions are:
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1. Actually what is the problem about?

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2. What desires, hidden needs & expectations are involved?

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3. Whether the mentioned customer needs, their constraints & function requirements are
really feasible?
4. What options can we have for creative design & innovative design problem solving?
5. What attributes or features should the product have?
6. What are the technical & technological disagreements about the design task? etc.

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2.9 Technology Forecasting

Technology Forecasting (TF) is a planning tool to be used in dynamic environments which

undergo rapid changes. Rapid technology progress and the increased rate of obsolescence of
technologies necessitate technology forecasting for any planning process. Since technologies
play a major role in planning of business, industry, government and society's growth, it
becomes essential to determine its direction and magnitude by systematic analysis and study.

❖ Need for technology forecasting

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The need for technology forecasting is essential for the following reasons:

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● Future oriented R & D

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● Prevention of import of obsolete technologies

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● Anticipating technical innovation

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● Shift towards appropriate technology
● Effective technology transfer i
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● Development of exportable technologies
● Rapidity of innovations
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● Trade restrictions
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● Avoid surprises
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2.10 S-Curve of Innovation

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S-Curve of Innovation represents product performance, competitive advantage, or generated
value over time. During the evolutionary change, performance starts from a slow initial
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phase, goes through an accelerated and scaled interval before it stabilizes and matures. As the
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technology loses its competitive advantage, there comes the need for a revolutionary change
(Technological Paradigm), which results in a new S-Curve.
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❖ Stages of Technology S-Curve

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A – Lower portion
This phase is in the beginning of the S-Curve pattern of innovation. It is when the product/
industry is completely new. As a result, a dominant design in the market hasn’t been
established yet. Therefore, the competition between the various players in the industry is
fierce. As a result, usually at this stage, most of the resources are spent on research and
development. There will apparently not be much innovation. Changes are less and widely
spaced

B – Middle portion
In this phase, due to the ability to overcome a major technical obstacle or the ability to satisfy

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a demand of the market. The product/industry has been adopted by the early majority and

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managed to cross the differences and a dominant design has been established already. Hence,

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the market will be characterized by rapid growth in production, and the product will move
quickly towards a full market acceptance. So, A rapid profusion of innovation (slope) will

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take place during this period. Many products are launched and many competitors join the
market.

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C – Top portion (Maturity)
Here, the product is adopted almost completely by society and is usually approaching a
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physical limit. Due to the strong competition among the major players in the market which is
clearly defined at this stage, most of the resources at this point are spent on improving the
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production processes and making them cheaper. Therefore, oftentimes the products at this
stage become completely standardized and the innovations at this stage are considered
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incremental.
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Discontinuity in S-Curve
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Usually, when the innovation in the product reaches its maturity level, there might be a
change in the technology which disrupts the industry or the market by its new technology. So
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thereby a new S-curve starts. When the new S-Curve starts, there will be a discontinuity in
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between the two S-Curves.

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Figures: S-Curve (with one Technology Innovation)
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2.11 Tools for Gathering Customer needs

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There are various methods available for the design team to realize customer needs. Different
techniques are developed and applied to construct a customer needs list which includes few
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among given below are:

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1. Interviews: Here a design team member discusses the needs with a single customer, one at
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a time. Such interviews are usually conducted in the customer environment, where the
customer uses the product.
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2. Questionnaires: Here the team develops a list of criteria which is relevant to the
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customers concerns. It then ranks the product on these criteria. This organized response is
arranged suitably for further development process.
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3. Focus Groups: Here a leader from team members facilitates a session with a group of
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customers. Usually the session is held in the product developer’s environment, typically
inside a room with a 2-way mirror communication so that the design team can observe the
customer during the session. Effective focus group practice is to have leaders ask exploratory
questions such as “Why” to uncover the needs of the customer.
4. Be the Customer: The Design team also travels to the location where their or their
competitors product is used and acts as a customer. This activity is typically executed by the
design team working hand-in-hand with the customers or alternatively, when the designer is
the customer such as during the design of equipment for in house use.
5. Web-based information/Internet etc.

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2.12 QFD and House of quality

Quality Function Deployment (QFD) and House of Quality (HOQ) is a structured approach
for defining customer requirements and translating design specifications or product control
characteristics in the form of a planning matrix. In other words, using QFD allows the
charting of customer wants and the technical hows, which results in a better understanding of
design relationships. QFD was initially developed by “Yoji Akao” and first applied in the
1970’s by “Mitsubishi Shipyard”.

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❖ House of Quality (HOQ): Each matrix in the methodology of QFD to translate the
Customer desires into Engineering specifications is called the House of Quality.

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Fig: Steps for building the house of quality:
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Example : Gear box top cover GBS 40 Tata Truck
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Step 1: Put all customer requirements (voice of customers) i.e. WHATS into rows. The QFD
assigns numeric values of 1.5,1.2 and 1 to each of the WHATS, with 1.5 going to the most
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important WHAT, 1.2 to the second important and 1 to all others.

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Step 2: Put all technical descriptions (Voice of organizations) i.e. HOWS into columns.
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Step 3: To determine the correlation between each HOWS and WHATS in the matrix.
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The following correlation and values are used:

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● Possible correlation-1
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● Some correlation-3
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● Strong correlation-9
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Step 4: To do the Customer Competitive Assessment and to Prioritize Customer

Requirements.
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Step 5: To do the Technical Competitive Assessment and to Prioritize Technical Descriptors.

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Note: T=Total, B=Rate of importance, N=Company now, P=Plan, A=ratio of

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improvement, C= Sales point, AW=Absolute wt. DW=Demanded wt.

Relationships strong = 9, Medium = 3, Weak = 1, Sales point = 1.5, 1.2 or 1,
AW=AXBXC, A=P/N
Cell value=Relationship wt. X dw E.G. 243=9 X 27
B,N & P = according to importance 5=very good and 1=very poor.

Conclusion: Ease of gear shifting is the most important customer demand and Integral
casting is the most important design change.
****END****

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