Notes_Quality Marketing RnD Design

7/23/2019 Notes_Quality Marketing RnD Design

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Engineering Management Notes Quality, Marketing, R&D, Design

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QUALITY MANAGEMENT

Operations Management

Refers to the management of the production system that transforms inputs into finished

goods and services.

o Production system: the way a firm acquires inputs then converts and disposes

outputs.

o Operations managers: responsible for the transformation process from inputs to

outputs.

Operations management seeks to increase the quality, efficiency, and responsiveness of the

firm.

o Seeks to provide a competitive advantage.

The Purpose of Operations Management

Operations Management Concepts

Quality: goods and services that are reliable and perform correctly.

o Quality allows customers to receive the performance that they expect.

Efficiency: the amount of input to produce a given output.

o

Less input required lowers cost and waste. Responsiveness to customers: actions taken to respond to customer needs.

o Firm can react quickly and correctly to customer needs as they arise.

Improving Responsiveness to Customers

Without customers, organizations cease to exist.

o Non-profit and for-profit firms all have customers.

o Managers need to identify who the customer is and their needs.

What do customers want? Usually customers prefer:

A lower price to a higher price.

High quality over low quality.

Fast service over slow service.

o

Also good after sale support.

Many features over few features.

Products tailored to their specific needs.

Price Attributes

Firms offering high quality, fast service and other customer desires, often must raise price.

o Customers must tradeoff price for attributes.

Operations management tries to push the price/attribute curve to the right with better

production.

Provides more attributes at the same cost.

By enhancing the price/attribute relationship, the firm can increase its competitive position.

Customer Responsive Production Systems

An outputs attributes is determined by the production system.


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o Firms must strike a balance between cost and attributes

Improving Quality: can apply to firms producing goods and services.

o A firm that provides higher quality than others at the same price is more responsive

to customers.

o Higher quality can also lead to better efficiency.

Impact of Increased Quality on Organizational Performance

Production Operations

Major focus of production operations is on efficiency and effectiveness of processes

Production operations often include substantial measurement and analysis of internal

processes

Quality

Meeting the Requirements, Needs, and Desires of the Customer

Measurable

Each Persons Responsibility

Quality management

Quality broadly is a concept as subjective as glamour, beauty or attractive.

The standardized definition refers to all those features of a product or a service which are

required by the customer.

Quality Management means what the organization does to ensure that its products conform

to the customers requirements.

Quality Management Model

Factors affecting TQM: Customer Focus, Process improvement and Total involvement

Enablers: Leadership, processes, human resources, policies/procedures and people

management

Results: Customer satisfaction and impact on society

Two Quality Approaches

Quality management systems (QMS)o Represented mainly by the ISO 9000 standard family

o Benefits of implementing qms: Commercial, Financial, Legal & Image

Total quality management(TQM)

o Total organization using Quality thinking and methods to Manage.

o Represented by Excellence Prizes as the Deming Prize and the Malcolm Baldrige

Award( Ref: NORM APME)

The 8 ISO 9001:2000 Quality Management Principles

1. Customer focus

a. Organizations depend on their customers and therefore should understand current

and future customer needs, should meet customer requirements and strive to exceed

customer expectations.


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b.

Main benefits:

i. Increased revenue and market share obtained through flexible and fast

responses to market opportunities.

ii. Increased effectiveness in the use of the organization's resources to

Enhance customer satisfaction.

iii.

Improved customer loyalty leading to repeat business.2.

Leadership

a. Leaders establish unity of purpose and direction of the organization. They should

create and maintain the internal environment in which people can become fully

involved in achieving the organizations objectives.

b. Main benefits:

i. People will understand and be motivated towards the organizations goals

and objectives.

ii. Activities are evaluated, aligned and implemented in a unified way.

iii. Miscommunication between levels of an organization will be minimized.

3. Involvement of people

a.

People at all levels are the essence of an organization and their full involvementenables their abilities to be used for the organization's benefit.

b.

Main benefits:

i. Motivated, committed and involved people within the organization.

ii. Innovation and creativity in furthering the organization's objectives.

iii. People being accountable for their own performance.

iv.

People eager to participate in and contribute to continual improvement.

4.

Process approach

a. A desired result is achieved more efficiently when activities and related resources are

managed as a process.

b. Main benefits:

i.

Increased revenue and market share obtained through flexible and fastresponses to market opportunities.

ii.

Increased effectiveness in the use of the organization's resources to

enhance customer satisfaction.

iii.

Improved customer loyalty leading to repeat business.

5. System approach to management

a. Identifying, understanding and managing interrelated processes as a system

contributes to the organization's effectiveness and efficiency in achieving its

objectives.

b.

Main benefits:

i.

Integration and alignment of the processes that will best achieve the desired

results.

ii. Ability to focus effort on the key processes.

iii. Providing confidence to interested parties as to the consistency,

effectiveness and efficiency of the organization.

6.

Continual improvement

a. Continual improvement of the organization's overall

b. performance should be a permanent objective of the organization.

c. Main benefits:

i.

Performance advantage through improved organizational capabilities.

ii.

Alignment of improvement activities at all levels to an organization's

strategic intent.

iii. Flexibility to react quickly to opportunities.

7.

Factual approach to decision making


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a. Effective decisions are based on the analysis of data and information

b. Main benefits:

i. Informed decisions.

ii. An increased ability to demonstrate the effectiveness of past decisions

through reference to factual records.

iii.

Increased ability to review, challenge and change opinions and decisions.8.

Mutually beneficial supplier relationships

a. An organization and its suppliers are Interdependent and a mutually beneficial

relationship enhances the ability of both to create value

b. Main benefits:

i. Increased ability to create value for both parties.

ii.

Flexibility and speed of joint responses to changing market or customer

needs and expectations.

iii. Optimization of costs and resources.

Implementation ISO 9001: Quality Management System

Identify the goals you want to achieve Identify what others expect of you

Obtain information about the ISO 9000 family

Apply the ISO 9000 family of standards in your management system.

Obtain guidance on specific topics within the QMS

Establish your current status, determine the gaps between your QMS and the requirements

of ISO 9001:2000

Determine the processes that are needed to supply products to your customers

Develop a plan to close the gaps in step 6 and develop the processes in step 7

Carry out your plan

Undergo periodic internal assessment

Do you need to demonstrate conformance ? If yes, step 12. If No, Step 13 Undergo independent audit

Continue to improve your business.

WHY implement QMS

Might be costly but it exists ways to avoid it by working together

More efficient management system

Better quality productsNo cost for return of defect products

Legal protection . Obey European Directives

More market shares

Image benefit

Strategic tool leading to sustainable development

Background Total Quality Management

Deming

Juras

Crosby

Baldrige Award

Process for Improvement

Plan

Do

Check Act


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TQM Prizes Malcolm Baldrige Assessment

Organizations must submit details showing their achievements and improvements in seven key

areas:

leadership,

strategic planning, customer and market focus,

information and analysis,

human resource focus,

process management,

results

The Deming Cycle 14 Points

Keep the course of your mission by constantly improving the products and the services

Adopt the new philosophy of management and lead the change of a firm hand

Do in a manner that the product quality asks for only a minimum of controls. Integrate

quality from the design

Give up the low price purchase rule. Rather seek to reduce the total cost. To reduce to a

minimum the number of suppliers per article, by establishing with them long-term relations

of honesty and confidence

Improve constantly all processes of planning, production and service, which will involve a

reduction of the costs

Institute a continuing education for all the personnel of the company

Institute a modern form of authority (leadership) having for goal to facilitate the work of the

men and the machines

Made fear disappeared, so that each one can contribute to the success of the company

Reverse the barriers between services. The tea work will avoid problems which can appearduring the development and the product us.

Remove exhortations, slogans and objectives which require from the employees to reach the

"zero defect" and to increase the productivity

Remove quotas of production, the method known as "management by objectives" (DPO)

and any form of management by figures

Remove obstacles which prevent the employees, the engineers and the executives from

being proud of their work

Institute a vigorous program of education and personal improvement

Make work all forces of the company to achieve the transformation

Malcolm Baldrige Quality Award Criteria

Leadership

Strategic Planning

Customer and market focus

Measurement, analysis, and knowledge management

Human resource focus

Process management

Business results

ISO 9000

Requires an organization to create processes in all functional areas that focus on customer needs

and reasonable expectation and that validate requirements of quality


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Baldrige/ISO Difference

Baldrige criteria focuses on results

and continuous improvement

ISO helps determine what is needed

to maintain efficient qualityconformance system

Management commitment

Focus on customer

Continuous improvement of

processes

Utilization of entire work force

Performance measures for the

processes

Total Quality Management

Seeks improvement in the quality of a firms goods or services.

o Stress that all activities be directed to this goal.

o TQM is really a company-wide management philosophy developed by Dr. Edwards

Demming.

Japanese firms were the first to use TQM.

TQM results have been outstanding in many firms.

o

Xerox has reduced defects and problems dramatically. TQM can fail when managers do not really support it.

Successful TQM Implementation

Successful firms have followed these steps:

o 1)Build organizational commitment to quality.

All employees must embrace TQM concepts.

Focus on the customer as definition of quality.

Find ways to measure quality.

o Easy in manufacturing areas but harder in service jobs.

Set goals and create incentives to be reached.

Solicit input from employees.o Quality circles: groups of employees meeting to discuss how to increase quality.

Managers must respect employee opinion.

Identify defects and trace to source.

o Managers must find out why the defect happened.

Introduce Just-in-Time (JIT) inventory systems.

o Inventory is the stock of raw materials. JIT has parts arriving in the plant just when

needed and not stored in advance.

o KANBAN: Japanese name for JIT that seeks to avoid stockpiles of costly inventory.

Work with suppliers. You need good parts to make great products.

Design products for easy manufacture.

Remove barriers between departments.

Managers and TQM

Managers are critical to a successful TQM system:

o Functional managers carry the responsibility for most of the 10 steps to success.

o For TQM to work, functional managers must totally embrace TQM.

Top management must also show their strong support.

o They need to arrange training for all managers (including themselves).

o Reward functional managers that move TQM forward.

Improving Efficiency

Labor productivity allows labor comparisons between organizations. Improved efficiency

leads to lower costs and better performance.


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TQM and Efficiency: TQM can lead to much higher labor productivity. When quality rises,

less time is wasted on scrap.

Flexible manufacturing and efficiency: reduces the set-up costs for production systems.

o Facilities layout: seeks to design the machine-worker interface to increase

production efficiency.

Facilities Layouts

Product layout: work stations arranged in sequence.

o Mass production systems are a common example.

Workers are stationary and a belt moves work to them.

Process Layout: work stations are self-contained and not in a fixed sequence.

o Well suited to making a wide variety of products tailored to customers.

Provides flexibility to change products quickly

Fixed-position layout: product stays in a fixed spot, components produced at remote

stations and brought to final assembly.

o Good for jet aircraft assembly.

Efficient Manufacturing

Most firms face major expense when setting up to produce a product.

o These costs must be paid before production begins.

The more often products to be built change, the higher setup costs become.

o Flexible Manufacturing reduces setup costs.

Just-in-Time (JIT) inventory, while developed for TQM, also adds to efficient production.

o Many costs are reduced including warehousing, holding costs and inventory

tracking.

Firm does not have a supply of parts, but can be vulnerable to strikes or

supply problem

Self-managed teams boost efficiency by allowing for a flatter organization structure.

o The team takes the role of the supervisor.

o Teams working together often become very skilled at enhancing productivity.

Kaizen: Japanese term for a management philosophy the stresses the need for continuous

improvement.

o Better operations can come from many, small, continuous improvements.

Focus on what adds value to the product and try to eliminate steps that do

not add value (such as inspection for defects).

Reengineering

Process Reengineering: the fundamental rethinking and radical redesign of the business

process.

o Can boost efficiency by directing efforts to activities that add value to the good or

service produced.

o While Kaizen focuses on continuous enhancements, process reengineering considers

wholesale change.

Top managers must support operations enhancement tools for them to be accepted by

workers.

o Usually, a successful operations change means a complete change in the

organizational culture.

o Without a supporting culture, change will not succeed.


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MARKETING

Introduction

Basic functions of an enterprise: Marketing and Innovation - special roles for engineers!

Marketing: Provide products/services meeting the needs and wants of customers, Focusing

on basic marketing concepts and applications

Innovation: Strengthen the firms competitive marketing position and sustain profitability by

technology, supply chains, product design, etc.

Marketing definition

The social and management process that aims to provide service and add value to customer,

eventually make a profit for the business.

Build a long term relationship by creating and delivering value for customers and capture

value by return.

Marketing Function Selling Versus Marketing

Marketing Orientation

Customer Focus - Understand needs, create value, and serve to assure customer satisfaction,

with inter-functional teamwork

Competitor Focus - Seek advantages relative to competitors, monitor behavior and respond

to strategic moves (foes or friends)

Profit Focus - Manage to assure short- and long-term profitability

Marketing Process


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Marketing Five step Processes

1)

Market place research

a.

Consumer behaviour is affected by

i. Culture, Social, Personal, &Psychology.

b.

Business market behaviour as:-

i.

Fewer but professional buyers.

ii. Consumers are more geographically concentrated.

iii. Demand often more elastic and fluctuate more quickly.

iv.

Analyse and further research environment at micro level (suppliers,

consumers, competitors, public and internals) and macro (demographic,

economic, natural, technological, political & cultural).

2)

Customer driven marketing strategy.

a.

It is important to know strategic planning as it is the process for developing and

maintaining strategic fit between organisation goals and its changing market

opportunities. To satisfy this, we need to do:

i.

Define the company mission where it should be a) realistic, b) Specific, c)

Market, oriented d) Motivating e) fit the market environment.

ii. Set Goals/objectives, i.e. accomplish the mission.

iii. Design business portfolio, develop growth strategy and decide on

investment.

iv. Plan functional and operational strategies

b. As part of step 2, it is anticipated to design a strategy that include following key

tasks:

i. Divide the market into different segments.

ii. Target and choose the best segment to serve.

iii.

Positioning products and brands.

3) Construct marketing program (Marketing MIX)

a. To implement a marketing program:

i. Product and service design, building a strong brand.

ii. Price, create real value and different pricing decisions. New products by a)

Market skimming when quality image support high pricing and competitor

cannot enter easily. B) Market penetration, enter new product quickly and

attract buyers to win big share. c) Other Psychological and promotional

pricing, these are customer driven and often temporary.

iii. Place of distribution, Manage demand & supply.

iv.

Promotion, Communicate the value proposition.

4)

Build profitable relationship and create customer delight

a. Customer relationships management: Build strong relationships with chosen

customers.

b.

Partner relationship management: Build strong relationships with marketing

partners.


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5)

Capture Value

a.

The last step in the marketing process is capture value from customers in return.

i. Capture value from customers to create profits and customer equity.

ii.

Create satisfied, loyal customers.

iii.

Capture customer lifetime value.iv.

Increase share of market and share of customers.

Levels of Marketing Strategy

Corporate Level: Set future direction of what businesses to pursue (product, service, total

solution, etc.) and what value to be emphasized

Business Level: Bring products/services to the marketplace and achieve/maintain

competitive advantages

Operational Level: Plan marketing program and implement/control marketing efforts

Marketing Effectiveness Diagram

Total Success: High profitability at

maximum possible rate

Partial Success: New customers replace

lost customers

Partial Failure: Sales slow or fall due to

a lack of new customers

Total Failure: Sales fall as customers

leave

Key Elements in Marketing

Market (size, growth rate, location)

Environment (competition, entry barriers, constraints)

Customers (who, why, when, where how, what)

Marketing Mix

Market Forecast

Demand forecast is critically important

1.

Define the market - Total Sales revenue per year of all products delivering similar benefits to

customers regardless of physical and functional features

2. Segment the market - Subdivide total market into homogeneous customer subgroups with

similar buying behavior and preferences

3.

Conduct sensitivity analyses - assess risks and check assumptions


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4.

Determine segment drivers and predict their changes - key factors affecting the segment

growths

Application examples:

a. Industrial product- Segments based on industries with individual segment growth

rates as drivers, assuming product demand is proportional to growth and businesslevels involved

b. Electricity- segments of industrial, commercial and residential; drivers are: business

climate and industrial growth rate for industrial; Internet sales increase, consumer

confidence, stock market performance for commercial; new home sales, change in

home size and energy efficiency of appliances for residential

c. Uncoated white paper- segments based on end users: business forms, commercial

pricing, reprographics, envelops, stationary/ tablets and books; drivers include

growth of electronic means, white collar workers, level of economic activity, price

reduction of personal printers, paying bills online, and demand growth due to price

reduction

Environment

Market study is needed to assess:

a. Competition (market share distribution, technology, brand strength, marketing

position, customer loyalty, etc.)

b. Barriers of entry (capital, technology, supply chains, distribution channels,

governmental regulations, etc.)

Customer Orientation

Define needs through research (real value of a product to customer - prestige, convenience)

Define market segments (groups with similar needs to facilitate product customization)

Differentiate products and communications (e.g., Dude selling Dell computers)

Create differentiated advantages for customers

Customers

Who(Profile, who buy from competitors, who does the buying, for whom is the buying

done)

Why(Reasons for product preference: price, product performance, convenience, product

styling, service, packaging)

What (What for, what value benefit, what they really want? what needed in the future?)

Where(where to get product information, where is buying decision made, where to buy

from: Retail store, mail order, via internet, department store, discount store )

How(How to decide, how to compare)

When (When to buy, weekly, monthly, special occasions, etc.)


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Who Makes What Decisions for Whom?

Market Segmentation

Purpose

o Divide consumers into groups having similar product/service preferences

(divide/conquer)

o

Value to Company: (1) Match products/ service better to the groups, (2) Create

suitable channels of distribution to reach them, (3) Uncover new consumer groups,

not being served sufficiently in the past, (4) Focus on niches being neglected by

competition

Segmentation

1.

Develop suitable marketing strategies

2. Formulate better-fitting marketing programs

3. Track changes of buying behavior over time

4.

Evaluate companys competitive position in these segments

5. Achieve improved effectiveness in utilizing marketing resources

Segmentation Steps

o Classification of Consumers: (1) Individual consumers (profile, location, life-style,

family life cycle), (2) Institutional Consumer (Business type, needs), (3) Others

(attitude toward brands, usage levels, product knowledge, type of use)

o Situational Factors: (1) Availability, (2) Application, (3) Timing

o Benefits Sought: (1) Psychological, (2) Price, (3) Functional

Requirements for Effective Segmentation

o Measurability(groups are identifiable)

o Homogeneity(similar buying preference and behavior)

o Accessibility(reachable by promotion and distribution means)

Size(big enough to justify going after it)

o Growth Rate(large enough to assure long-term profitability)

Prerequisites for Implementing Segmentation Strategy

o Attractiveness(expected sales volume, profitability, growth)

o Skills(required skills to serve the segment in order to compete)

o

Synergies/dis-synergieswith other products of the company (existing distributionnetworks, acceptability in the marketplace)


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Pitfalls

o Over-Segmentation(small sizes, fragmented segments difficult for company to

serve -scale of economy) - Newer supply chains allows build-to-order strategies to

serve smaller segments (Dell, Custom beer, Chinese foods, etc.)

o

Over-concentration(lack of balance between segments)

Marketing Mix

Product Strategy: Functional attributes,

compatibility to customer needs,

distinguishable features over competition,

product-line strategy, product/market fit

Promotion/Communication Strategy:

How to promote, adopt pull/push, which

media to use, fit promotion to marketsegment selected

Pricing Strategy: Skimming or penetration based pricing, value-added pricing, target pricing, pricing fit to market

segment

Placement (Distribution) Strategy: Intensive, exclusive or selective distribution, relationship with intermediaries

(retailers, wholesalers), changes in distribution logistics and technologies

Product Strategy

Nature of Products

o Customers Perception: Bundles of Benefits satisfying specific wants and desires. Different products

providing the same or similar benefits are equivalent (substitution products)

o Producers Perception: Physical embodiments created by labor, materials, technologies and investment to

perform specific functions

Life Cycle of Products

New Product Development Process

Product Failure (Rate, Reasons)

Summary


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Product Strategy Options

Optimize product value(price, function features, quality, serviceability, ease of use, package) to create

differentiation to users - opportunities for engineers to make major contributions

Sequential introduction of new productsto sustain high levels of profitability (company needs frequent product

innovations

Product Positioning

What product features to include and emphasize - critically important

Selection of product featuresto place new (or existing) products in a favorable position with respect to

competition - customer preferences and gap created by existing products in marketplace

Product Life Cycle

Every Product goes through a number of phases: (1) Initiation(product development, testing, market

development, advertising), (2) Growth(product promotion, market acceptance, profit growth), (3) Stagnation

(price competition, substitution, new technologies), (4) Decline(cash cow strategy, product withdrawal)

Product Supply Curve

Product supply curve describes the market behavior of companies -- supplying larger quantity of products in the

product price is raising to higher levels in search of higher profits

Product innovations -- better products or lower product price, causing demand to increase and downward shift

of supply curve

Impact of Product Innovation

Brands

A Distinct identity that differentiates a relevant, enduring and creditable promise of value associated with a

product, service or organization that indicates the source of that promise. It represents all images and

experience customers have of and with the organization.


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Brand Pyramid

Brand Classes


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Product Strategy Engineering Contributions

Product strategy - key element in marketing mix with the entire marketing program built around products

Engineers are most qualified to contribute in the critical aspects of product design, production, quality

assurance, cost control, functional reliability, serviceability maintainability, and time-to-market aspects

Pricing Strategy

Pricing Options

o Skimming Strategy- Set premium price initially to capture high profitability from affordable

customers and then reduce price in time to reach additional customers in the marketplace (e.g., new

books, ginger)

o Penetration Strategy- Set price low to penetrate the market rapidly for setting barrier of entry to

late-coming competitors (e.g., Microsoft Office 2000, Japanese motor cycles)

Factors affecting Price

Pricing Methods

o Cost: Price = Cost + Markup (e.g., 30% of cost)

o

Profit: Price = Cost + Profits (e.g., ROI)

o Market: Set price to what the buyers are willing to pay (imperfect information distribution, the next

best alternative available to buyer)

o Value: Set price in proportion to products value added to buyer (application know-how)

o Competition: Set price at level charged by competition (Target Pricing)

o It is legal to price a given product differently at different time (end of season periods, holidays) to

different groups of customers, based on economic/business factors (e.g., purchase volume,

geographic markets, companys positioning strategy in specific segments - steel, food, chemical, etc.,

and inventory status).

Target Pricing

Setthe selling price based on customer inputs and market survey and determinepertinent product features

Adda gross margin that company must have

Obtain the Cost of Goods Sold (CGS) that must not be exceed

Definematerial/parts, design, product development, and production method to meet CGS target

Key Features of Target Pricing:

o Concurrent team to define price and product features - minimize design changes during

implementation

o Detailed cost analyses (material, activities) before product development


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o Innovation under the gun

o Assure market success and company profitability

Pricing and Psychology of Consumption

Consumption leads to repurchase

Frequent reminder of cost of a product tends to encourage buyers to consume the product -Time-

payments better than lump-sum

Sunk-cost Effect - Consumers feel compelled to consume product they have paid for to avoid the

guilty feeling that they have wasted their money

Marketing Communications

Communicator: Spokesperson (Bob Doe for Viagra, Tiger Wood for golf products) -Associating the

personal reputation of the communicator to the value of the product being communicated about

Message: Ring Around the Collar, Where is the Beef, Army, Be All You Can Be, You are What You

Know, We Measure our Performance One Investor at a Time Channels: Advertising (print, TV, web-based), personal selling (sales people calling on customers), direct

mail marketing, sales promotion (extra 15% off, free samples, interest-free loans, discount coupons),

interpersonal exchanges (shared experience in users group), news articles, sources perceived to be

neutral (Consumers Reports)

Audience: Buyer profile, media habits, product knowledge

Effect of Communication: Short-term (recall, recognition, awareness, creating purchase intention), long-

term (purchase decisions, brand loyalty), Influencing factors (timing, product availability, competitive

activity, bundle of values)

Promotion Strategy

Pull: Through advertising, products are pre-sold to users, who ask for these products, thus pull them

through the supply chain

Push: Through incentives programs (sales quota, factory rebates, discount coupons, interest-free loans),

products are being pushed onto the users

Internet Enabled Communications Options

Business to Business: Manufacturers Intranet for intermediaries

Business to Consumer: Web portals of distributors for selling to consumers Direct: Manufacturer web sites (Dell, Gateway), buyers portals (Covisint, ChemConnect)

Virtual Market: Third party search portals (Yahoo), auction site (e-Bay), e-marketplace

Contextual Marketing

Bringing marketing messages directly to customer at the point of need (hitting the iron while it is hot)

Johnson & Johnson - Banner ads for Tylenol, when stock market drops more than 100 points

Google - List ads ahead of list of hits

Dell - Product Specs in CNET and ZDNET

Distribution Strategy

Channels of Distribution


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Functions of Distribution Channels

o Transportation(overcoming the spatial gap between producers and users)

o Inventory(Overcoming the temporary gap between production and usage)

o Allocation(Assigning quantity and lot size)

o Assortment(Grouping compatible products for the convenience of users)

o Financing(Facilitating timely possession of products)

o Communications(Transmitting information and customers feedback)

Types of Distribution

o Intensive: Stock goods in many outlets for wide distributions (consumer products such as books,

CDs, films, calculators, electric fans, home appliances)

o Exclusive: Only through qualified outlets (autos, PCs)

o Selective: Through selected intermediaries (technical representatives for instruments, equipment,

software products)

Impact of E-Commerce on Distribution

o Internet reduced the value contributed by some wholesalers and retailers: (1) Speed and enriched

contents of communications between producers and users, (2) Order processing, (3) Direct

distribution by logistic providers from producers to users

o E-Commerce reduced the final product prices and product delivery time to users

Other Factors Affecting Marketing Success

Alliance and Partnership: Competition in todays marketplace requires competence and skills not always

timely available in house, leading many companies to pursue alliances and partnerships for the purposes

of formulating win-win marketing and production strategies to focus on creating superior customer

value

Customer Interactions and Loyalty:

o Customer experience with a company affects directly its business success (motivated employees

along with the required support infrastructure to satisfy customers needs)

o

Profitability - Customer loyalty - Trust - Effective customer interactions

o Five determinants of Customer Loyalty: (1) Quality customer support, (2) on-time delivery, (3)

compelling product performance, (4) convenient and reasonable priced shipping and handling,

and (5) clear and trustworthy privacy policies.

Organizational Effectiveness: Less rigidly structured organizations are more likely to become customer-

focused

R&D


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Product Life Cycle

Research and Development

Basic Research

Applied Research

Development

New Product Strategies

First-to-market

Follow-the-leader

Me-too

Application engineering

Intellectual Property

Ideas and inventions (products of the mind)

Patents, Copyrights and Trademarks are methods of protecting intellectual property.

Lawyers in this fields referred to as: intellectual property lawyers, patent lawyers, patent agents, or

patent attorneys.

Patent Types

Design Patents

o a fixed design or look of an object

Utility Patents

o composition of matter, process, method or apparatus

Plant Patents


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Criteria for Patentability

Novelty

Usefulness

Non-obvious to someone skilled in the art

Disclosure Types

Full, formal disclosure to Technology Transfer Manager

Bound laboratory notebooks with third party corroboration

Completion of Disclosure Checklist

Include drawings and sketches

Joint Inventorship Legally Speaking

Two or more persons who have contributed to the inventive acts of an invention

Group research often results in joint inventorship, however, it is critical to document evidence of joint

inventorship in laboratory notebooks

Laboratory Notebooks Legally Speaking

The best primary record of invention is numbered, bound laboratory notebooks

Pages skipped or not completely filled in by writing have a line drawn through the unwritten portion(s)

Contemplated or planned experiments are written out as precisely as possible, with results recorded as

soon as they are obtained

Each page is initialed and dated by the person who directs the experiments

Each page is initialed and dated by the person who conducts the experiments

By following these rules, a complete and timely record of the experimental work, in a manner which islegally recognized as highly probative evidence will be obtained

Document the Date of Conception

Make numbered and dated comprehensive sketches and written description of the concept.

Sign and date all documents with the inventor and two witnesses who are:

o not the inventor

o fully understand the idea

o expected to be around years later to testify in court if necessary

Document Diligence

Record progress (or failure) using lab notebooks and project reports

At least once a month, all of the inventors and two technically competent witnesses should sign and date

the entries

Always use actual dates... never backdate or predate

Patent Infringement

Patent is infringed when the invention covered by the patent is used without the permission of the

inventor during the time that the patent is in force

Patent owner has the right to sue the infringer in the federal courts and collect compensation for past

infringement can cause the infringer to cease and desist all infringing activity


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Trademarks

A distinguishing symbol, design, mark or word used by a manufacturer to identify his product from his

competitors

A mark, character or symbol by which another entity is recognized or associated

Copyrights

A copyright is a grant, by the United States, to an author for the right to exclude others (for a limited time) from

reproducing his/her work

Types of Copyrights

o Literary works

o Musical works

o Dramatic works

o Choreographic works

o Pictorial works

o

Motion Pictures/Videos

o Sound Recordings

Creativity Process

Preparation

Frustration

Inspiration or illumination

Verification

Creativity Techniques

Brainstorming

Nominal Group Technique

Attribute-listing

Mind mapping

Characteristics of Creative People

Self-confidence and independence

Curiosity

Approach to problems

Personal: loners, game players, creative writing

Kinds of People Needed for Technological Innovation

Idea generator

Entrepreneur

o One who undertakes effort to transform innovation into product

Gatekeeper

Program managers

Sponsor or Champion


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MANAGING ENGINEERING DESIGN

New Product Development

Approval to expend resources and agreement on work to be done

Accomplishment of work on stage Complete results

Proposed plan for next stage

Reviewformal or informal

Engineering Problem Solving Approach

Define the problem

Collect and analyze the data

Search for solutions

Evaluate alternatives Select solution and evaluate the impact

New Product Development Stages

Conceptual

Technical Feasibility or Concept Definition

Development

Commercial Validation

Production

Product Support

Disposal Stage

Concurrent Engineering

Set of methods, techniques, and practices, that:

Consideration within design phase of factors from later in cycle

Produce design of processes

Facilitate reduction of time required to translate design into products

User ability to meet users needs

Engineers Must Communicate

Drawings

Specifications

Financial Estimates

Written Reports

Oral Presentations

Sales

Control Systems in Design

Drawing Release

Configuration Management


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Design Review Board

Special Considerations in Design

Product liability

o Designer foresee unlikely conditions

o Product contains adequate warnings

o

Risks reduced to greatest extent possible

o Meets users reasonable expectations of safety

Safety

o Safeguards to Reduce or Eliminate Accidents Influenced By:

Design

Proven materials and components

Proven manufacturing methods

Clear instruction

Reliability

o Probability that the product will perform a specified function

o Under specified conditions

o For a stated period of time

Maintainability

o Administrative and preparation time

o Logistics time

o Active maintenance time

Availability

Ergonomicso Human Factors engineeringo Science of designing machines, products, and systems to maximize the safety, comfort, and

efficiency of the people who use them

o One of primary goals is prevention of workplace illness and accidents

Productibility

Value Engineering

What is it?

What does it do? What does it cost?

What is it worth?

What else might do the job?

What do alternatives cost?


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Documents

Notes_Quality Marketing RnD Design