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Chapter 1

ADMS 4245 Chapter Notes - Chapter 1: Industrial Design

Administrative Studies
Course Code
ADMS 4245
Peter Modir

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The economics success of a product depends on the ability to find a need and quickly create a
product to satisfy those needs. Achieving these goals is not solely a marketing problem, nor is it
solely a design problem or manufacturing problem; it is a PRODUCT DEVELOPMENT
PRODUCT DEVELOPMENT: it is the set of activities beginning with the perception of a
market opportunity and ending in the production, sale, and delivery of a product.
Characteristics of Successful Product Development: There are 5 dimensions that should
lead to economics success; however, other performance criteria arise from the interest of
other stakeholders in the enterprise, including the members of the development team, other
employees and the community where it is manufactured.
1. Product Quality: How good is it? Product quality is ultimately reflected in market
share and the price that customers are willing to pay
2. Product Cost: What is the manufacturing cost of the product?, which includes
capital acquisition, incremental cost of production. Product cost determines how
much profit accrues to the firm for a particular sales volume and a particular sales
3. Development time: How quickly did the team complete the development?
Development time determines how responsive the firm can be to competitive forces
and to technological developments as well as how quickly the firm receives the
economics returns from the team’s effort
4. Development cost: how much did it cost to develop the product? This is a significant
investment for a new product
5. Development Capability: are the team and the firm better able to develop future
products as a result of their experience with a product development project?
Development capability is an asset the firm can use to develop products more
effectively and economically in the future
Who designs and develop Products?: Product development requires contribution from
nearly all the functions of a firm. These are the most important functions:
1. Marketing: Helps understand the customers’ needs and typically arranges
communication between firm and customers, sets target prices, and oversees the
launch and promotion of product
2. Design: It plays the lead role in defining the physical form of the product to best
meet customer needs. It includes engineering design such as mechanical, electrical,
software, etc. Industrial design (Ergonomics)
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