Convergence products are multifunctional designs which are changing the way consumers use existing functionalities. Manufacturers’ ventures in developing convergence products abound in the marketplace. Smartphones, tablet computers, and internet TV are just a few examples. The complexity of designing a convergence product can differ significantly from that of single function products which most research in “design for market systems” aims at. In this paper, a new customer-driven approach for designing convergence products is proposed to address the following issues: (i) a design representation scheme that considers information from design solutions used in existing products. The representation facilitates the coupling of and combining multiple functionalities; (ii) a hierarchical Bayes model that evaluates consumers’ heterogeneous choices while revealing how usage of multiple functionalities impacts consumers’ preferences; and (iii) design metrics which help to evaluate profitability of design alternatives and account for future market penetration given evolving consumer preferences. An example problem for designing a tablet computer is used to demonstrate the proposed approach. The data for the example are collected by conducting a choice-based conjoint survey which yielded 92 responses. The proposed approach is demonstrated with three scenarios differentiated by the consideration of consumer heterogeneity and future market penetration, while comparing how the resulting optimal design solutions for the convergence product differ.
Issue Section:
Research Papers
References
1.
Han
, J. K.
, Chung
, S. W.
, and Sohn
, Y. S.
, 2009, “Technology Convergence: When Do Consumers Prefer Converged Products to Dedicated Products?
,” J. Marketing
, 73
(4
), pp. 97
–108
.2.
Luo
, L
, Kannan
, P. K.
, and Ratchford
, B. T.
, 2008, “Incorporating Subjective Characteristics in Product Design and Evaluations
,” J. Mark. Res.
, 45
(2
), pp.182
–194
.3.
Chen
, Y.
, Carrillo
, J. E.
, Vakharia
, A. J.
, and Sin
, P.
, 2010, “Fusion Product Planning: A Market Offering Perspective
,” Decision Sci.
, 41
(2
), pp. 325
–353
.4.
Li
, H.
, and Azarm
, S.
, 2000, “Product Design Selection under Uncertainty and with Competitive Advantage
,” ASME J. Mech. Des.
, 122
(4
), pp. 411
–418
.5.
Thevenot
, H. J.
, and Simpson
, T. W.
, 2009, “A product dissection-based methodology to Benchmark Product Family Design Alternatives
,” ASME J. Mech. Des.
, 131
(4
), 041002
.6.
Fellini
, R.
, Kokkolaras
, M.
, Papalambros
, P.
, and Perez-Duarte
, A.
, 2005, “Platform Selection under Performance Bounds in Optimal Design of Product Families
,” ASME J. Mech. Des.
, 127
(4
), pp. 524
–535
.7.
Strmersch
, S.
, and Tellis
, G. J.
, 2002, “Stragetic Bundling of Products and Prices: A New Synthesis for Marketing
,” J. Marketing
, 66
(1
), pp. 55
–72
.8.
Chung
, J.
, and Rao
, V. R.
, 2003, “A General Choice Model for Bundles with Multiple-Category Products: Application to Market Segmentation and Optimal Pricing for Bundles
,” J. Mark. Res.
, 40
(2
), pp. 115
–130
.9.
Williams
, N. A.
, Azarm
, S.
, and Kannan
, P. K.
, 2010, “Multicategory Design of Bundled Products for Retail Channels Under Uncertainty and Competition
,” ASME J. Mech. Des.
, 132
(3
), 031003
.10.
McAdams
, D. A.
, Stone
, R. B.
, and Wood
, K. L.
, 1999, “Functional Interdependence and Product Similarity Based on Customer Need
,” Res. Eng. Des.
, 11
(1
), pp. 1
–19
.11.
Gao
, F.
, Xiao
, G.
, and Simpson
, T. W.
, 2009, “Module-scale-based Product Platform Planning
,” Res. Eng. Des.
, 20
(2
), pp. 129
–141
.12.
Dobrescu
, G.
, and Reich
, Y.
, 2003, “Progressive Sharing of Modules among Product Variants
,” Comput. -Aided Des.
, 35
(9
), pp. 791
–806
.13.
Shiau
, C. N.
, and Michalek
, J. J.
, 2009 “Should Designers Worry About Market Systems?
,” ASME J. Mech. Des.
, 131
(1
), 011011
.14.
Tucker
, C. S.
, and Kim
, H. M.
, 2008, “Optimal Product Portfolio Formulation by Merging Predictive Data Mining with Multilevel Optimization
,” ASME J. Mech. Des.
, 130
(4
), 041103
.15.
Kumar
, D.
, Chen
, W.
, and Simpson
, T. W.
, 2009, “A Market Driven Approach to Product Family Design
,” Int. J. Prod. Res.
, 47
(1
), pp.71
–104
.16.
Hauser
, J. R.
, and Clausing
, D.
, 1988, “The House of Quality
,” Harv. Bus. Rev.
, 66
(3
), pp. 63
–73
.17.
Frischknecht
, B. D.
, Whitefoot
, K.
, and Papalambros
, P. Y.
, 2010, “On the Suitability of Econometric Demand Models in Design for Market Systems
,” ASME J. Mech. Des.
, 132
(12
), 121007
.18.
Orsborn
, S.
, Cagan
, J.
, and Boatwright
, P.
, 2009, “Quantifying Aesthetic Form Preference in a Utility Function
,” ASME J. Mech. Des.
, 131
(6
), 061001
.19.
Williams
, N.
, Azarm
, S.
, and Kannan
, P. K.
, 2008, “Engineering Product Design Optimization for Retail Channel Acceptance
,” ASME J. Mech. Des.
, 130
(6
), 061402
.20.
Williams
, N.
, Kannan
, P. K.
, and Azarm
, S.
, 2011, “Retail Channel Structure Impact on Strategic Engineering Product Design
,” Manage. Sci.
, 57
(5
), pp. 897
–914
.21.
Shiau
, C.
, Tseng
, L. H.
, Heutchy
, A. W.
, and Michalek
, J.
, 2007, “Design Optimization of a Laptop Computer Using Aggregate and Mixed Logit Demand Models with Consumer Survey Data
,” Proceedings of the ASME 2007 International Design Engineering Technical Conferences & Computers and Information in Engineering Conference
, September 4–7, 2007, Las Vegas, Nevada.22.
Hoyle
, C.
, Chen
, W.
, Wang
, N.
, and Koppelman
, F. S.
, 2010, “Integrated Bayesian Hierarchical Choice Modeling to Capture Heterogeneous Consumer Preferences in Engineering Design
,” ASME J. Mech. Des.
, 132
(12
), 121010
.23.
Koukova
, N. T.
, Kannan
, P. K.
, and Ratchford
, B. T.
, 2008, “Product Form Bundling: Implications for Marketing Digital Products
,” J. Retailing
, 84
(2
), pp. 181
–194
.24.
Koukova
, N. T.
, Kannan
, P. K.
, and Kirmani
, A.
, 2012, “Multi-Format Digital Products: How Design Attributes Interact with Usage Situations to Determine Choice
,” J. Mark. Res.
, 49
(1
), pp. 1
–10
.25.
Kane
, Y. I.
, 2010, “Apple Puts iPad Sales at Two Million
,” Wall Street Journal, available at: http://online.wsj.com/article/SB10001424052748703406604575278740134863582.html?KEYWORDS=ipad+sale+5+millionhttp://online.wsj.com/article/SB10001424052748703406604575278740134863582.html?KEYWORDS=ipad+sale+5+million, last checked on January 12, 2011.26.
Kane
, Y. I.
, 2010, “The Only Tech These Geeks Lack Is a Cart to Haul Their Gadgets
,” Wall Street Journal, Available at: http://online.wsj.com/article/SB10001424052748703514904575602703106692326.htmlhttp://online.wsj.com/article/SB10001424052748703514904575602703106692326.html, last checked on January 12, 2011.27.
Yang
, S.
, Allenby
, G. M.
, and Fenell
, G.
, 2002, “Modeling Variation in Brand Preference-the roles of objective environment and motivating conditions
,” Mark. Sci.
, 21
(1
), pp. 14
–31
.28.
Thevenot
, H. J.
, and Simpson
, T. W.
, 2004, “A Comparison of Commonality Indices for Product Family Design
,” Proceedings of the ASME 2004 International Design Engineering Technical Conferences & Computers and Information in Engineering Conference
, September 28-October 2, 2004, Salt Lake City, Utah
.29.
Kota
, S.
, Sethuraman
, K.
, and Miller
, R.
, 2000, “A Metric for Evaluating Design Commonality in Product Families
,” ASME J. Mech. Des.
, 122
(4
), pp. 403
–410
.30.
Meyer
, M. H.
, and Lehnerd
, A. P.
, The Power of Product Platforms: Building Value and Cost Leadership
(Free Press
, NY
, 1997).31.
Ramdas
, K.
, and Sawhney
, M. S.
, 2001, “A Cross-Functional Approach to Evaluating Multiple Line Extensions for Assembled Products
,” Manage. Sci.
, 47
(1
), pp. 22
–36
.32.
Heilman
, C. M.
, Bowman
, D.
, and Wright
, G. P.
, 2000, “The Evolution of Brand Preferences and Choice Behaviors of Consumers New to a Market
,” J. Market. Res.
, 37
(2
), pp. 139
–155
.33.
Lilien
, G. L.
, Kotler
, P.
, and Moorthy
, K. S.
, Marketing Models
(Prentice-Hall
, Upper Saddle River, NJ
, 1995).34.
Ulrich
, K. T.
, and Eppinger
, S. D.
,, Product Design and Development
(Irwin McGraw-Hill
, Boston, MA
, 2000).35.
Deb
, K.
, Multi-Objective Optimization using Evolutionary Algorithms
(John Wiley & Sons
, Chichester, NY
, 2001).36.
Belk
, R. W.
, 1975, “Situational Variables and Consumer-Behavior
,” J. Consum. Res.
, 2
(3
), pp. 157
–164
.37.
McFadden
, D.
, 1980, “Econometric Models for Probabilistic Choice Among Products
,” J. Business
, 53
(3
), pp. 13
–29
.38.
Green
, P. E.
, and Srinivasan
, V.
, 1978, “Conjoint Analysis in Consumer Research: Issues and Outlook
,” J. Consumer Res.
, 5
(2
), pp. 103
–123
.39.
Rossi
, P. E.
, Allenby
, G. M.
, and McCulloch
, R.
, Bayesian Statistics and Marketing
(Wiley
, Hoboken, NJ
, 2005).40.
Simpson
, T. W.
, and Park
, J.
, 2005, “Development of a Production Cost Estimation Framework to Support Product Family Design
,” Int. J. Prod. Res.
, 43
(4
), pp. 731
–772
.41.
Khajavirad
, A.
, Michalek
, J. J.
, and Simpson
, T. W.
, 2009, “An efficient decomposed multiobjective Genetic Algorithm for Solving the Joint Product Platform Selection and Product Family Design Problem with Generalized Commonality
,” Struct. Multidiscip. Optim.
, 39
(2
), pp. 187
–201
.42.
MathWorks, 2011, “
Using the Genetic Algorithm (Global Optimization Toolbox)
,” Available at: http://www.mathworks.com/help/toolbox/gads/f6010dfi3.htmlhttp://www.mathworks.com/help/toolbox/gads/f6010dfi3.html, last checked: May 25, 2011.43.
Mintel Oxygen, 2008, “
Home Personal Computers - US - December 2008, Segment Performance—Laptops
.”44.
Mintel Oxygen, 2010, “
Mobile Phones - US - June 2010, Segment Performance—Smartphones
.”45.
Haskell
, B.
, Portable Electronics Product Design and Development
(McGraw-Hill
, NY
, 2004).46.
Mouser Electronics, 2011, “
Mouser Electronics-Electronic Component Distributor
,” Available at: http://www.mouser.com/http://www.mouser.com/, last Check on 12 January.47.
Sawtooth Software Inc.
, Sawtooth Choice-Based Conjoint User Manual
(Sequim, WA, 2001).48.
Chrzan
, K.
, and Orme
, B.
, 2000, “An Overview and Comparison of Design Strategies for Choice-Based Conjoint Analysis
,” Sawtooth Software, available at: http://www.sawtoothsoftware.com/download/techpap/desgncbc.pdfhttp://www.sawtoothsoftware.com/download/techpap/desgncbc.pdf, last checked on May 19, 2011.49.
Qualtrics, 2010, “
Survey Design
,” available at: http://www.qualtrics.com/survey-design/http://www.qualtrics.com/survey-design/, last check on 12 January, 2011.50.
See supplementary material at http://dx.doi.org/10.1115/1.4004977http://dx.doi.org/10.1115/1.4004977E-JMDEDB-133-024108 for a comprehensive description of the survey procedure as well as the response data.
51.
Gill
, J.
, 2008, Bayesian Methods: A Social and Behavioral Sciences Approach
, 2nd ed., Chapman and Hall/CRC
, Boca Raton, FL
.52.
Spiegelhalter
, D. J.
, Best
, N. G.
, Carlin
, B. P.
, and van der Linde
, A.
, 2002, “Bayesian Measures of Model Complexity and Fit
,” J. R. Stat. Soc. Ser. B (Stat. Methodol.)
, 64
(4
), pp. 583
–640
.53.
Allenby
, G. M.
, Rossi
, P. E.
, and McCulloch
, R. E.
, 2005, “Hierarchical Bayes Models: A Practitioners Guide
,” available at SSRN: http://ssrn.com/abstract=655541http://ssrn.com/abstract=655541, last Checked on January 12, 2011.54.
Wang
, Z.
, Azarm
, S.
, and Kannan
, P. K.
, 2011, “Strategic Product Design Decisions for Uncertain Market Systems Using an Agent Based Approach
,” ASME J. Mech. Des.
, 133
(4
), 041003
.Copyright © 2011
by American Society of Mechanical Engineers
You do not currently have access to this content.
