2. Chapter 4: Identifying Customer Needs Product Design and Development Fourth Edition by Karl T. Ulrich and Steven D. Eppinger

3. Session Outline Introduction to Concept Development Phase and to Customer Needs Benefits of Structured Methods Review of Customer Needs Method Discussion of Principles and Caveats Needs Interpretation Exercise

4. Objectives & Strategy The fundamental metric of product quality –Satisfaction of customer needs. Teams must understand these needs in order to develop the right product. Importance of structured methods –Use of “generic instructions” for product development –Basic procedures for identifying customer needs Philosophy: To make engineers, industrial designers and developers to reach out to the customers

5. Benefits of structured methods Structured methods allow the team to maintain focus on the important issues, in this case on the needs of the customers. Structured methods provide a decision process that the team can follow and use to develop consensus throughout the project. Structured methods produce documentation of the development process and its key decisions.

6. Goals of adopting need identification methods Ensure that the product is focused on customer needs. Identify latent or hidden needs as well as explicit needs. Provide a fact base for justifying the product specifications. Create an archival record of the needs activity of the development process Ensure that no critical customer need is missed or forgotten Develop a common understanding of customer needs among members of the development team.

7. Planning Product Development Process Concept Development Concept Development System-Level Design System-Level Design Detail Design Detail Design Testing and Refinement Testing and Refinement Production Ramp-Up Production Ramp-Up

8. Concept Development Process Perform Economic Analysis Benchmark Competitive Products Build and Test Models and Prototypes Identify Customer Needs Establish Target Specifications Generate Product Concepts Select Product Concept(s) Set Final Specifications Plan Downstream Development Mission Statement Test Product Concept(s) Development Plan Examples of products ? …where the developers appear to have gotten the customer needs right …where they have not got it right

9. Customer Needs Process Step 0  Define the Scope –Mission Statement Step 1  Gather Raw Data –Interviews –Focus Groups –Observation Step 2  Interpret Raw Data –Need Statements Step 3  Organize the Needs –Hierarchy (Primary, secondary and tertiary needs) Step 4  Establish Importance –Surveys –Quantified Needs Step 5  Reflect on the Process –Continuous Improvement

10. Customer Needs Example: Cordless Screwdrivers

11. Step 0  Define the scope Mission statement

12. Mission Statement Example: Screwdriver Project Product Description A hand-held, power-assisted device for installing threaded fasteners Key Business Goals Product introduced in 4th Q of 2000 50% gross margin 10% share of cordless screwdriver market by 2004 Primary Market Do-it-yourself consumer Secondary Markets Casual consumer Light-duty professional Assumptions Hand-held Power assisted Nickel-metal-hydride rechargeable battery technology Stakeholders User Retailer Sales force Service center Production Legal department

13. Step 1  Gather Raw Data From the use environment of the product Interviews Focus Groups Observing the product in use Choosing customers –Quality over quantity –Concept development teams Single segment Multiple segment –Lead users Articulate emerging needs because of inadequacies May have invented solutions –Extreme users –Customer selection matrix (Exhibit 4.5)

14. How Many Customers? From: Griffin, Abbie and John R. Hauser. “The Voice of the Customer”, Marketing Science. vol. 12, no. 1, Winter 1993. One-on-One Interviews (1 hour) Focus Groups (2 hours) 012345678910 0 20 40 60 80 100 Percent of Needs Identified Number of Respondents or Groups

15. Art of eliciting customer needs –When and why do you use this product? –Walk us through a typical session using the product. –What do you like about the existing products? –What do you dislike about the existing products? –What issues do you consider when purchasing the product? –What improvements would you make to the product? General hints for effective interaction: Go with the flow Use visual stimuli and props Suppress preconceived hypotheses about the product technology Have the customer demonstrate the product and/or typical tasks related to the product Be alert for surprises and the expression of latent needs Watch for nonverbal information Document interactions with customers (Exh 4.6)

16. Step 2  Interpret Raw Data Guidelines for writing Need Statements: Express the need in terms of what the product has to do, not in terms of how it might do it. Express the need as specifically as the raw date Use positive, not negative, phrasing Express the need as an attribute of the product Avoid the words must and should

17. Five Guidelines for Writing Needs Statements Guideline Customer StatementNeed Statement-WrongNeed Statement-Right What Not How Specificity Positive Not Negative Attribute of the Product Avoid “Must” and “Should “Why don’t you put protective shields around the battery contacts?” “I drop my screwdriver all the time.” “It doesn’t matter if it’s raining, I still need to work outside on Saturdays.” “I’d like to charge my battery from my cigarette lighter.” “I hate it when I don’t know how much juice is left in the batteries of my cordless tools.” The screwdriver battery contacts are covered by a plastic sliding door. The screwdriver battery is protected from accidental shorting. The screwdriver is rugged. The screwdriver operates normally after repeated dropping. The screwdriver is not disabled by the rain. The screwdriver operates normally in the rain. An automobile cigarette lighter adapter can charge the screwdriver battery. The screwdriver battery can be charged from an automobile cigarette lighter. The screwdriver should provide an indication of the energy level of the battery. The screwdriver provides an indication of the energy level of the battery.

18. Step 3  Organize needs –Hierarchy (Primary, secondary and tertiary needs)

19. Organized List of Customer Needs

20. Step 4  Establish importance Surveys To establishes the relative importance of quantified needs Quantified needs

21. Step 5  Reflect on the process Continuous Improvement: Have we interacted with all of the important types of customers in our target market? Are we able to see beyond needs related only to existing products in order to capture the latent needs of our target customers? Are there areas of inquiry we should pursue in follow-up interviews or surveys? Which of the customers we spoke to would be good participants in our ongoing development efforts? What do we know now that we did not know when we started? Are we surprised by any of the needs? Did we involve everyone within our own organization who needs to deeply understand customer needs? How might we improve the process in future efforts?

22. Caveats Capture “What, Not How”. Meet customers in the use environment. Collect visual, verbal, and textual data. Props will stimulate customer responses. Interviews are more efficient than focus groups. Interview all stakeholders and lead users. Develop an organized list of need statements. Look for latent needs. Survey to quantify tradeoffs. Make a video to communicate results.

23. Principles and Caveats Involve the Whole Team Don’t just let the marketing representatives perform the needs process. Get the rest of the team involved. Capture the Use Environment Video and/or still photography is valuable to document the environment in which the product will be used. These images will come in handy during concept generation and for making presentations later. Identify the Lead Users Seek out those who experience needs ahead of others and those who stand to benefit greatly from new products. They often have useful innovations to share. Look for Latent Needs These are the needs that are most difficult to identify, however products which first are able to satisfy such needs are often phenomenally successful. Students can debate whether the structured approach presented here is capable of identifying latent needs. The Walkman example is a classic one: There are several ways that Sony could have figured out that people would like portable music. "What Not How" The most important guideline in translation of needs is to capture the essence of what the customer needs, not how to accomplish it. Of course when useful solutions are suggested, the team should make a note which can be saved for concept generation later. Use Props It is useful to bring props to customer interviews and focus groups. This can stimulate discussion about needs and will reveal problems with existing products. Suggested props include existing products, items related to the product use environment, etc.

24. Visual Information Example: Book Bag Design

25. Needs Translation Exercise: Book Bag Design Example “See how the leather on the bottom of the bag is all scratched; it’s ugly.” “When I’m standing in line at the cashier trying to find my checkbook while balancing my bag on my knee, I feel like a stork.” “This bag is my life; if I lose it I’m in big trouble.” “There’s nothing worse than a banana that’s been squished by the edge of a textbook.” “I never use both straps on my knapsack; I just sling it over one shoulder.”