Explaining Change in Product Design and Product Modification

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What do you understand by change in product design/product modification? Why does the necessity for changing product design arise? Draw one change management program for product or process.

Product design is the process of creating a new product that will be sold by a company to its customers. A very broad concept, it is essentially the production and development of ideas and effective through a process that leads to new products.

In a systematic approach, product designers conceptualize and evaluate ideas, turn them into products and material inventions. The role of the product designer is to combine art, science and technology to create new products that others can use. Their changing role has been facilitated by digital tools that now allow designers to communicate, visualize, analyze and produce really concrete in a way that would take more manpower in the ideas of the past.

Product design is sometimes confused with (and certainly overlaps) industrial design, and has recently become an inclusive term of services, software and physical design. Industrial design is the design and artistic sensation usually associated with the design and craftsmanship of ergonomics, and mass-produced goods. Other aspects of product design include engineering design, especially when issues of functionality or utility (e.g., problem solving) are involved, although these limits are not always clear.

An effective development process of products or services should be divided into a number of key steps:

  • Generating ideas - capture new ideas.
  • Distillation idea - to disseminate these ideas not worth moving.
  • Definition of the concept - consider specifications such as technical feasibility and market potential. If you are considering a new product, you should consider the design process now.
  • Strategic analysis - to ensure your ideas are part of the strategic plans of your company.
  • Development of the concept - to create a product prototype or pilot service.
  • Testing and finalizing the marketing concept - to ensure that your product or service may be modified based on feedback from customer, manufacturer and support organizations. This means deciding the best time and the process of piloting your new product or service.
  • Product launch - the most sensitive stage. Before setting a date, you must determine how to sell, promote and support your product or service. Make the right choice the first time is essential. But any decision to delay your launch must be weighed against the danger that you beat your competitors in the market.

The two aspects of the markets for product modification information: i) the manner in which retention and conquesting modifications affect competition between downstream firms and ii) the optimal selling and pricing policies for a vendor who markets product modification information. They consider several aspects of the vendor’s contracting problem including how a vendor should package and target the information to the downstream firms and whether the vendor should limit the type of information that is sold? They also examine when a vendor can gain by offering exclusivity to a firm? The authors address these issues in a model consisting of an information vendor facing two downstream firms who sell differentiated products. The model analyses how information contracting is affected by differentiation in the downstream market and the quality of the information (in terms of how impactful the resulting modifications are). They analyze two possible scenarios. In the first, the information facilitates modifications that increase the appeal of products to the loyal customers of only one of the two downstream firms (i.e., one-sided information). In the second scenario, the information facilitates modifications that are attractive to the loyal consumers of both the firms (i.e., two-sided information). The effect of modifications on downstream competition depends on whether they are of the retention or of the conquesting type. A retention-type modification increases the “effective” differentiation between the firms and softens the price competition between firms. Conquesting modifications, however, have benefits as well as associated costs. A conquesting modification of low impact reduces the “effective” differentiation between competing products and leads to increased price competition. However, when conquesting modifications are of sufficiently high impact they also have the benefit of helping a firm to capture the customers of the competitor. The vendor's strategy for one-sided information always involves selling to one firm. When information identifies high impact modifications, it is sold to the firm for which the identified modifications are conquesting. In contrast, when the modifications have low impact, the optimal strategy is to sell the information to the firm for whom the modifications are the retention-type. With two-sided information, the equilibrium strategy is for the vendor to sell the complete packet of information (information on both retention and conquesting modifications) to both downstream firms. However, in equilibrium, both the firms only implement retention-type modifications. The information on conquesting modifications is “passive” in the sense that it is never used by downstream firms. Yet the vendor makes strictly greater profit by including it in the packet. This obtains because the price charged for information depends critically on the situation an individual firm encounters by not buying the information. The presence of conquesting information in the packet puts a non-buyer in a worse situation and this underlines the “passive power of information”. The vendor gains by including the conquesting information even though it is never used in equilibrium.

There are three major ways of product modification, i.e. quality modifications, functional modifications, and style modifications.

Quality modifications: These are changes that relate to a product's dependability and durability and usually are executed by alterations in the materials or production process employed. Reducing a product's quality may allow an organization to lower the price and direct the item at a larger target market.

The quality of a product may give a firm an advantage over competing brands and may allow the firm to charge a higher price because of increased quality. Or the firm may be forced to charge more because of higher costs to achieve the increased quality. 

Functional modifications: Changes that affect a product's versatility, effectiveness, convenience, or safety are called functional modifications. They usually require redesigning the product. Functional modifications can make a product useful to more people, which enlarge the market for it. This type of change can place a product in a favorable competitive position by providing benefits not offered by competing items. Functional modifications can also help an organization to achieve and maintain a progressive image.

Style modifications: Style modifications are directed at changing the sensory appeal of a product by altering its taste, texture, sound, smell, or visual characteristics. Since a buyer's purchase decision is affected by how the product looks, smells, tastes, feels, or sounds, a style modification may have a definite impact on purchases.

Through style modifications a firm can differentiate its product from competing brands and perhaps gain a sizable market share for this unique product. The major drawback in using style modifications is that their value is determined subjectively. Although a firm may modify a product to improve the product's style, customers may find the modified product to be less appealing.

Changing Product Strategies

In industrial product development, a marketing strategy that is flexible and adaptive to changing market circumstances stands a greater chance of being effective in the long-term. Products and consumer perceptions are variable, so changes in strategy may be required to better address customer needs, technological developments, new laws and regulations, and the overall product life-cycle. By monitoring external conditions and shifting product development accordingly, a company can better target its consumers and learn to react to their needs. The major factors that can necessitate a change in product strategy include:

Customer Preferences: Fluctuations in the cost of materials, new application requirements, and changing brand awareness are just a few of things that can cause consumer needs to change. Keeping close track of customer response to a product and taking their demands into consideration are important for maintaining market share.

Technological Advances: A new technological development can engender a change in a product line, causing products to need modification in order to remain competitive or rendering some products obsolete. For example, fibre optic cables have replaced older cables in certain applications and many businesses have switched from main frame computers to personal computers. Being aware of these advances can help a business stay ahead of the curve.

• Laws and Regulations: The implementation of new governmental regulations can cause certain products or manufacturing methods to be restricted, limiting their consumer appeal. Conversely, new laws can also lend an advantage to certain business and deregulation can sometimes benefit production standards. Product development strategies must shift according to the legal landscape.

Product Life-Cycles: To preserve the rate of growth in profit and sales, many industrial companies decide to alter, discontinue, or replace older products with newer models or more recent upgrades. These changes are usually made periodically, allowing existing products that reach maturity or decline to be phased out or modified, thus retaining their appeal.

Example of Sony incorporation

The term Corporate Identity (CI) refers to both a company's characteristics and the image it conveys to the public. In the early years, when Sony was still relatively small and unknown, CI was a totally new concept in Japan. However, people at Sony realized the importance of CI early on and began to promote the Sony brand name worldwide.

In 1955, Ibuka and Morita registered SONY as an official trademark of Tokyo Tsushin Kogyo with the intention of establishing the name as a global brand. One month later, when Bulova Inc. of the US promised to order 100,000 transistor radios on the condition that they be sold under its own brand name, Morita refused, saying that his company would only allow its products to be sold under the Sony brand. When pressed, he asked Bulova, "How many people had heard of your company fifty years ago? My company is just starting out, but fifty years from now it will be just as famous as yours."

In 1958, Tokyo Tsushin Kogyo, which was gaining recognition for its Sony brand goods, changed its name to Sony Corporation. The name "Sony" is easy to pronounce and read in any language. Moreover, it has a short lively ring, which matched the spirit of freedom and open-mindedness which Ibuka emphasized in the company's Founding Prospectus. The name "Sony" was neither derived from anything connected with the electronics industry, nor from the names of the company's two founders. At the time it was introduced, the name was considered by many Japanese to be quite strange. The fact that it was introduced at all can be attributed to Ibuka and Morita's progressive philosophy.

After changing its name, Sony set about building its brand image. Morita firmly believed that brand image could be built from the ground up, and that a company had to work hard to develop it. For him, corporate image was like a product; it had to be carefully manufactured and marketed and he always kept this in mind when conducting business.

From its introduction, the eye-catching SONY logo was revered within the company. The first version of the logo, which was enclosed in a square box, was registered as a trademark in 1955. Thereafter, the logo went through a succession of changes. In the 1960s, when Sony began to seriously develop its brand image overseas, the logo was displayed in neon in New York and Hong Kong, where it competed with famous and well-established foreign companies. In 1959, the catchphrase "Sony -- a worldwide brand born in Japan" was introduced to capitalize on the logo. This was followed by the slogan, "Research Makes the Difference." One man who worked particularly hard on the development of the logo was Sony designer Yasuo Kuroki. In 1961, it was decided to place the new Sony logo on a neon sign in an upscale area of Hong Kong. Sony was the first Japanese company to put up such a sign there. But before this could happen, the logo needed to be modified to suit this method of display. So Kuroki who was then in the Publicity Department, was asked by Morita to come up with a design. The following year, Kuroki's logo was proudly displayed in advertisements for Sony's miniature televisions. To develop an even more effective logo, a committee was formed within Norio Ohga's Design Division. By 1962, corporate identity (CI) rules and a design policy for the use of the Sony logo were established. After making numerous attempts to modify the logo, the company decided on the current version, which was introduced in 1973.

In order to mark the 35th anniversary of the company in 1981, there was a proposal within Sony to introduce a new logo. Although ideas were submitted from all over the world, Ibuka decided that none of the designs was better than the original one which had been in use since 1973. Consequently, the 1973 logo was kept, and it is still in use today.

In 1982, Sony created a catchphrase and an additional logo to enhance the company's overall CI. When Morita was shown the design for this "S mark" logo, he thought that when people saw it for the first time, they would wonder what it represented. He reasoned that a brief, catchy description would be needed to explain the "S mark." The phrase he came up with was, "It's a Sony!" This, he believed, would add impact to the advertisement. Thereafter, all Sony TV commercials ended with the "S mark," followed by a voice-over saying, "It's a Sony!" This unique combination of picture and sound quickly became recognized around the world as a unique Sony trait.

When launching such products as the Betamax VCR in 1975, the Walkman headphone stereo in 1979, and the 8mm camcorder series in the 80s, Sony sought to create new markets and lifestyles. Because such products often presented completely new concepts, they had to be advertised in ways that effectively explained what they were and how they should be used. Therefore, Sony advertising staff was involved in product planning so that product names, marketing slogans and advertising strategies were created in tandem with the products themselves. Sony's method has traditionally been to come up with one or two catchy words to introduce a new concept or product. A prime example of this is the name "Walkman," a Sony product name that has become synonymous with personal headphone stereos. Another example is "Passport-size," which was used to promote Sony's 8mm camcorder. This camera was small enough to fit into a travel bag and was marketed for use on holidays. Since the establishment of the Sony brand name, the company has tried to make its product names and catchphrases part of our everyday language.

Sony always strives to manufacture products that fit the Sony brand image. These products are usually classified and marketed as the "World's First," "World's Smallest," "World's Biggest," or "World's Best" products. By the same token, Sony approaches the design of new products in a way that nobody else has done before, emphasizing originality and uniqueness. Good examples include the Walkman, Profeel and Handycam products.