Product Services Offering and Pricing Part 2CE 2.4: Product/Service Offering and Pricing

Daniela Axinte and Mary Keany2015/2016

Topics for discussion

• Engineering

• Testing

• Patentability

• Production

• Packaging

• Pricing strategies

ENGINEERING

Engineering

Development Prototype engineering design Engineering analysis Design review report

Prototyping All the various components

Finalization Rev A engineering design Software release (if any) Engineering test reports

TRANSFER TO ENGINEERING

Transfer to Manufacturing

Transfer and Tooling Tooling and fixture support Design files Product manual Product packaging

Design Verification Inspection Beta prototype Design verification test report

Pilot Production Production support

TESTING

Testing - Purpose

Validate the product technically

Test The product technically Price points Functionality Esthetics (colors, packaging, etc.) Messaging (on packaging, collateral material)

Testing – Things to Consider

Core Idea Concept vs. Positioning Statement Concept

• A core idea is a few sentences or one paragraph of text or rough artwork.

• It focuses on the main benefit with little emphasis on secondary benefits, emotions, or persuasiveness

• A positioning statement is several paragraphs • The focus is on the main benefit and secondary benefits

including some selling messages and high quality artwork or photos

Testing

Approved factory UL and other special requirements

Special testing for the specific product Examples: FDA, lead-free

Quality testing First products off the production line Ongoing, random quality testing

PATENTABILITY

Patentability

Types of Patents Design vs. utility patent Improvements vs. brand new idea

Patent office International patents Patent enforcement

PRODUCTION

Typical Production Schedule

Tooling Foam molds

Plastic molds

Order Individual components

Packaging

Assembly Packaging Shipping

From the factory

From the warehouse to the retailers

To consumers

Typical Costs*

Tooling Costs Production cost

Components (all listed individually)

Testing cost (if testing is required) Sourcing company commission (if a sourcing

company is being used) Assembly cost Packaging cost Freight and duty

* Per unit

PACKAGING

Packaging the offering

Languages Colors Benefits vs. features Visual images Environmental issues

PRICING STRATEGIES

Pricing strategies

Introductory pricing Good, better, best Promotional pricing Lost leader Competitive pricing

Topics discussed

• Engineering

• Testing

• Patentability

• Production

• Packaging

• Pricing strategies

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