Product and Service Development Report - Unit 22 Assignment

This report provides a comprehensive analysis of product and service development, using L'Oreal Paris as a case study. It begins with an introduction to the processes involved in developing products and services, including the levels of customer integration. The report then applies these processes to the development of a modified hair spa kit by L'Oreal Paris, incorporating Vitamin B tablets. The analysis includes an examination of the product life cycle stages and appropriate product line management choices for individual products. Furthermore, the report details the design and pitching of the modified product, taking into account market testing, product/service launch, and distribution strategies. Finally, it incorporates a reflective statement on team working, creative development, and presentation aspects of the assignment.

Product & Service
Development

PART - A.........................................................................................................................................1
INTRODUCTION...........................................................................................................................1
P1. Explain the processes involved in the development of products and services and the levels
of customer integration................................................................................................................1
P2. Apply these processes in application to the development of a specific organisational
product or service........................................................................................................................3
PART 2............................................................................................................................................4
Under this section of report, firm which has been chosen to further understand the concept of
NPD I.e.L`Oreal Paris. This subsection of report will keep its focus on product life cycle and
appropriate product line management choices which are required for individual products or
services of the company. Apart from this, Design and pitch a product or service taking in to
account market testing, product/service launch and distribution. Lastly, a reflective statement
is also enclosed under this assignment which will critically reflects on team working, creative
development and presentation.....................................................................................................4
TASK 2............................................................................................................................................4
P3. Assess the life-cycle stage of the products or services in a company’s portfolio.................4
P4. Evaluate which appropriate product line management choices are required for individual
products or services.....................................................................................................................5
P5. Design and pitch a product or service taking in to account market testing, product/service
launch and distribution................................................................................................................7
Hi
P6. Complete a reflective statement that critically reflects on team working, creative
development and presentation.....................................................................................................9
CONCLUSION................................................................................................................................9
REFERENCES..............................................................................................................................10

PART - A
INTRODUCTION
Modern business world is filled with competitors. Therefore, it has become vital for
companies to develop new products or services with the use of invention or innovative approach.
It is required for firms to understand the renews and measure needs of customers who have been
targeted. This may lead organizations to manufacture the best product or service. In present
report, company which has been chosen i.e. L`Oreal Paris which is a multinational French brand
which was found in the year of 1909. Company planned to re – launch its hair spa kit with
modifications in it (Vasantha and et. al., 2012). Here, they have added some tablets of Vitamin –
B which can help their clients to grow hair much more stronger and smoother in nature at the
same time. Assignment will include process of a new product development (NPD) and
application of it on a product.
TASK 1
P1. Explain the processes involved in the development of products and services and the levels of
customer integration
The process of development of products or services is referred as the stage where
particular company decides to establish and produce their own products or any kind of specific
services. Product and services are two different concept, but service is interlinked with the
product to some extent. Product means any item is being made for available to the sale. It can be
both tangible and intangible. Service can be a product, product cannot be a service. Service is a
kind of transaction when there is no existence of the physical product transferring from the seller
to the purchaser (Lee, Kao and Yang, 2014). The product of product and services is considered
as the cross functional framework which involves marketing, design and production process.
In context of L`Oreal Paris, process of new product development is the step by step
framework. L`Oreal Paris has decided to launch their new brand product (Modified hair spa kit).
It will helpful in strongering and smoothing the hairs of its clients. The foundation of process
starts with idea generation and end at the launch of the outcome or product.
This process is considered as a journey from the creative and innovative idea to actual
product. For L`Oreal Paris, the process of the new product development are as follow:
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Idea generation - This is the primary stage of the new product development of an existing
product of L`Oreal Paris. It starts with an idea generation from various sources such as market
research, SWOT analysis, customer’s feedback etc (Grönroos and Voima, 2013). An idea would
be creative, innovative and a common fact with the wide scope to sustain in the market. An idea
would be specific and creative and innovative etc.
Idea screening - This is the second stage of development of product or service of L`Oreal
Paris. Ideas are many finding the most suitable is the difficult tasks. It involves finding feasible
idea which will most appropriate results. There are many factors such as: competitive advantage,
present trend in the market, company’s strength, price factor, affordability etc.
Concept development & testing - This is the third stage of the product or service development.
An idea when passing the screening stage converts into the product concept for the testing
purpose. In this some target customer are taken into consideration for the testing scope and
reliability of the product (Jacobs, Chase and Lummus, 2014). Customer feedback is very
important for the further improvement and changes in existing hair spa kit. Post evaluation is
very important for the forwarding process of product or service development.
Business strategy analysis & development - In this stage, process of development of
products or services actually comes into the existence, when there is a final confirmation from
the R&D department of the L`Oreal Paris. In this, company decides what all sort of strategies
and marketing move will company follow to make demand of the product higher. It involves the
competition, target market, pricing strategies, advertisements and sales promotion etc.
Product development - Once all other stages and strategies has been approved, it is the stage
when the actual product comes into existence. It would be both tangible and intangible and
tangible products. This stage decides the production process of the actual product when it passes
through the multiple stages of the manufacturing, packaging and logistics (Bertoni, A., Bertoni,
M. and Isaksson, O., 2013).
Test marketing - Now a days, L`Oreal Paris and other organizations are using prototype
strategy instead of the concept theories to take customer feedback and advice by first few sample
products to customer to test and give their feedback, views and opinion etc. The makes the
product ready for the launch and commercialization.
Commercialization - This is the last stage of the product & service development process.
It reveals that actual products is ready for being launch in the market for the purchase. After
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marketing mix is now put to use. In this, L`Oreal Paris basically decides the market for the
launch of the product with modifications which further will decide whether product is feasible or
not. This is important for the company to decide this as soon as possible before loss or market
potential disadvantage.
P2. Apply these processes in application to the development of a specific organisational product
or service
L`Oreal Paris is going to launch its modified hair spa kit which is enclosed with Vitamin B
tablets that are strongly recommended for hair nowadays. It has been analysed that every single
product whether it is new or modified when an organisation launches it , company needs to set a
process through which launching of product or application of development can take place
(Hogan and Coote, 2014). it is also required forL`Oreal Paris to consider to keep its focus on
customer integration because people consists with a number of perception which can impact
upon whole process of the product. Here, it is being found that above discussed process can
easily help L`Oreal Paris to develop its hair kit taking help of research and collected data from
different perceptions of customers.
Idea generation, this is one of the crucial responsibility of L`Oreal Paris because their are ample
number of cosmetic companies that are doing business in all over world and they have good
number of unique products and services as well. Here, it has also been analysed that simple
modifications can help L`Oreal Paris to bring good changes in their hair spa tool kit and this may
easily aid them in giving good rivalry to its competitors. Apart from this, idea screening and
concept developing are two more major responsibilities of product development process which
can help L`Oreal Paris in choosing the right idea from many (Demirkan and Delen, 2013). After
that, it is required to set appropriate strategy so that effective modifications in existing product
(Hair spa kit) can be made. Away with this, after considering all the points, product development
can take place. Lastly, testing of modified or new product of L`Oreal Paris can take place where
it is assumed by company that modifications that company have brought in are being liked by
people or not with the help of commercializing the hair spa kit among targeted customers.
Conclusion
With the help of above mentioned report, it has been summarized that NPD processes can help
an organization in developing right product for correct consumers. This may help in bringing
effective modifications with in an existing product or may aid in building a new one. It is
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required for firms to focus on following whole process of NPD without leaving any step, because
from generating the idea to its screening and then from their to developing strategy, developing
product to its merchandising and more plays a crucial role in success of a product. This can help
firm in reaching to new heights.
PART 2
INTRODUCTION
Under this section of report, firm which has been chosen to further understand the concept of
NPD I.e.L`Oreal Paris. This subsection of report will keep its focus on product life cycle and
appropriate product line management choices which are required for individual products or
services of the company. Apart from this, Design and pitch a product or service taking in to
account market testing, product/service launch and distribution. Lastly, a reflective statement is
also enclosed under this assignment which will critically reflects on team working, creative
development and presentation.
TASK 2
P3. Assess the life-cycle stage of the products or services in a company’s portfolio
Product life cycle comprises different stages which are associated with various marketing
and managerial decisions (Spithoven, Vanhaverbeke and Roijakkers, 2013). Like a human every
product has life cycle. Products and services has to go through four primary stages: Introduction,
growth, maturity and decline. All these stages have different characteristics for different
business. L`Oreal Paris is world's largest cosmetics company, is introducing a Modified hair spa
kit. The following are stages of life cycle of this product:
Introduction stage: This is the most expensive for company as firms like L`Oreal Paris
launches their products and services in market for their target customers. L`Oreal Paris will
launch their modified hair spa kit. At this stage market size use to be small and so sales will also
be less. There will be huge cost linked to the product like research for product development,
testing of product among consumers and analysis of demand in market for launching new
product (Mason and Brown, 2013).
Maturity stage: At this stage, modified hair spa kit of L`Oreal Paris which will help in
smoothing and strengthening the hair of customers. If a product is established in market, then
next task of manufacturer is not to gain market share, but to maintain level of it. This is the stage,
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when competition at its higher and promotion strategies should be made keeping in consideration
all the aspects. L`Oreal Paris can change or modify its product as to increase sales so that
economies of scale can be achieved. Also, these will help organization to benefit of competitive
advantage.
Decline stage: This is last stage of product life cycle which is also known as saturation
point. As the name suggests, product of L`Oreal Paris is now at its saturation level. It means,
market starts declining or shrinking because of different types of choices available to customers
in market as compared to their product. Another reason is that customers already purchased that
product who were interested in buying. Organizations can choose cost effective methods of
production, so that profit ratio can be increased (Florén and Frishammar, 2012). This is because,
once product will be outdated then fixed cost incurred will not be covered. Resultantly, L`Oreal
Paris can suffer loss.
Growth stage: Growth stage can be said as a crucial stage of product life cycle because
highest profit is earned at this stage. This is due to achievement of economies of scale as L`Oreal
Paris has adopted efficient technology. There is also enhancement in sales, because of
promotional activities and attraction of customers to discounts as well as offers. Thus, growth
stage is for only product development. Potential of this stage can be maximized by establishing
strong marketing and promotional department as well as research and development department.
P4. Evaluate which appropriate product line management choices are required for individual
products or services
A product line is a group of related products under a single brand sold by the same company
(Flint and Woodruff, 2014). Companies sell multiple product lines under their various brands.
Companies often expand their offerings by adding to existing product lines, because consumers
are more likely to purchase products from brands with which they are already familiar. In present
context, L`Oreal Paris which is already having grey number of products which they have already
segmented them among a single brand name I.e. L`Oreal Paris. When it comes to launch a whole
new product or modifications within an existing product, company have to decisions for the
particular product and here it is Hair spa kit to select the best product line and make appropriate
choice with the help of management. In present context, it is the responsibility of product line
manager of the L ‘Oreal Paris,as this is the personwho manages specific products to ensure that
their success is in line with the company's expectations.
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They strive to increase profitability of existing products, while also helping to develop new
products. Product line managers work across all departments of the company, including sales,
operations, engineering, marketing, and manufacturing. The product line manager must be able
to effectively collaborate and communicate with these departments to meet company
expectations and consumer demands (Jacobs, Chase and Lummus, 2014). On an average, it is
required for every single organisation ti consider these four steps to establish cross functional,
collaborative product line management and spark its own product rationalization effort and these
are given beneath:
1. Gain clarity on sales & marketing strategy:It is imperative for sales and marketing of `Oreal
Paris to articulate an integrated strategy that clearly identifies the hair spa kit portfolio of
Establishing this clarity beyond the walls of sales and marketing is desirable, and should
especially be made clear to manufacturing. Manufacturing must be proactive in understanding
the sales and marketing strategy.
2. how the sales & marketing strategy is converted to units: Strategies that state “sell product
worth of products in region which was targeted,” and leave it at high level or to the vagaries of
planning and scheduling to derive a production mix without collaboration and cross functional
review, are all too common. L`Oreal Parismust be able to translate forecasted revenue to a viable
production mix in a manner that utilizes the input of all stakeholders. Think robust Sales and
Operations Planning. S&OP is an excellent product management tool that is often omitted as
L’Oreal Paris work stream (Demirkan and Delen, 2013)
3. Dive in: perform a detailed product line analysis:Here, it is required for the company to put
the whole segment of Hair spa kit to the test. There are three product line attributes to test:
volume history, volume and margin analysis, and strategic fit. Look first at the segment sales
volumes in the near history (three to five years), then apply the specific Principle to analyze
profitability and volume, and lastly perform a qualitative research of the strategic value of the
product lines and the whole segment.
4. Take action: implement the result; After complete the product line analysis, it is required for
L`Oreal Paris to develop approach so that pruning of the portfolio cam be done. For
example:Determine strategies to offer substitution alternatives to customers that are using or
have used an eliminated product of the same company. Identify opportunities to reprice products
that do not have alternatives to lower produced unit costs.
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Consider offering discounted options to pool similar products to extend order quantities and take
advantage of raw material synergies and purchasing economies.
Investigate strategies to improve production capability – line and equipment enhancements,
focused set-up reduction, leaning out critical processes, and eliminating that last bit of process
variance by applying Six Sigma (Lee, Kao and Yang, 2014). Manufacturing, sales and
marketing, and key operations stakeholders must be in it together. As previously
mentionedabove, product line rationalization cannot be successful if performed in solid sections
or areas. The approach must be aligned with common business goals in all functional areas
ofL`Oreal Paris.This way, the L`Oreal Paris will become ready to move forward to support and
sustain the product line management strategy.
TASK 3
P5. Design and pitch a product or service taking in to account market testing, product/service
launch and distribution
In context of L`Oreal Paris, company have already developed an effective modified hair spa kit.
This new idea the best chance to succeed, L`Oreal Paris need to accurately test the market and
plan the launch accordingly. While company could shell out a lot of money to consultants or
marketing strategists, it is mandatory for can organisation to study the market by own, and this
do-it-yourself approach may be easier and cheaper than holding an expensive strategy . (Jaakkola
and Alexander, 2014).
Start With Friends and Family: The vast majority of market research starts with discussing the
idea for Company’s product or service with the people in Business life wo are close enough and
can suggest the best option for L`Oreal Paris. Conversation can be done informally, over a
Business meeting or in the car, or it could consist of a more targeted brainstorming session,
trying to mine the best ideas to enhance the overall creation of the product i.e. Modifications in
hair spa kit. In general, L`Oreal Paris just want to get a feel for whether or not the idea is having
good opportunity of succeeding or not. Theoretically, the people in business life are going to be
the most positive about product which L`Oreal Paris is going to launch.
Small Scale Testing: Once L`Oreal Paris decides to move forward with the idea, company may
want to start market testing on a small scale. As L`Oreal Paris creating a physical product, have
prototypes made so that people can test it out and give actual feedback on its design and
functionality. Using all of this feedback to Company’s advantage. Don’t outright dismiss
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criticism without considering it, and remember that if multiple testers have the same compliant,
it’s probably a problem worth solving.
At the same position, , company also want to move outside the sphere of relatable business
people friends and family. L`Oreal Paris want to start getting the opinions of people with whom
organisation don’t have a personal relationship. For this stage, L`Oreal Paris can have the people
in into the business and enlist number of people so that they may provide feedback their and
family to provide feedback, or company can use social media to recruit a list of volunteers.
Hopefully, by getting these unvarnished opinions, people can start to refine product of L`Oreal
Paris creation so that it’s suitable to be unveiled to the public at large.
Testing the Market Online : The Internet is a virtually limitless resource for testing the viability
of L`Oreal Paris idea, and this research can be done in a number of different ways. One of the
best places to start is with online forums that deal with topics that are related to modified hair spa
kit. Check out the most popular forums on the topic, paying close attention to the number of
members and the frequency of posts. These metrics will help L`Oreal Paris to active the forum is,
which will give L`Oreal Paris some idea of how much public interest there is in its product
(Wirtz. and et. al., 2013).
Additionally, online tools such as Google Insights, Google Trends and the Google Keyword
Planner will show L`Oreal Paris how often people are searching for specific terms, where those
customers are located and whether the topics are growing in popularity. To be sure, the data
provided by these tools won’t perfectly predict the success of L`Oreal Paris, but it can be
incredibly useful as Company may start to strategize the best ways to brand and market the
creation which has been done by the company (Cummings and Worley, 2014).
If organisation want to get more specialized information, sites such as Quantcast and Market
Samurai can be invaluable resources. With Quantcast, L`Oreal Paris can get a demographic
breakdown of company’s potential customers. Once organisation find a website for Hair spa kite
that is similar, Quantcast can deliver a wide range of data about the visitors to that site,
including age, gender and income level. Understanding these metrics will help company in to
better launch and advertise idea of L`Oreal Paris Additionally, Market Samurai can tell that how
many customers are looking for the type of product or service that L`Oreal Paris offering, as well
as how likely they are to spend money on it (Yip, Phaal and Probert, 2014).
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TASK 4
P6. Complete a reflective statement that critically reflects on team working, creative
development and presentation
As mentioned by Jaakkola and Alexander, (2014) distinguish groups from teams and the necessity for
a thorough understanding of this process for effective team leadership and management. Author
have Defined here a team as a group of individuals working together to produce a product or
service for which they are all mutually accountable. They have a shared goal and are
interdependent in it’s accomplishment, their interactions producing the collective result. It is
argued that groups differ in that they perform their tasks independently of each other and
sometimes also competitively.
It has been critically analysed that working in small teams is conditional to effective learning
and involves collaboration and co-operation. Away with this, another author have mentioned that
adopting a critical stance by implying that the application of learning strategies by educational
establishments is simply gathering together a group of individuals and hoping for the best. Co-
operative learning is said to reinforce learning amongst group members through discussion and
powerful review. In order to achieve a goal it is essential that teams work cooperatively.
Furthermore, I have found that collaboration as the foundation of a healthy team and together
with effective communication is key to producing high quality results. Some of authors have also
suggested that working collaboratively requires a clear objective and opinion when decision
making. the aspect of shared responsibility in collaborative working.
CONCLUSION
From above mentioned report, it has been concluded that proper product development
process for a particular commodity can help in executing the idea into real products or services
which has been made after considering needs and wants of the customer. Apart from this, it is
being also summarized that product life cycle needs to be made properly which can help in
making modifications in existing products or it can also aid in looking at the overall status of the
product from its launching to current position of the product. An effective product can help a
company in giving good rivalry to competitors and can also aid in enhancing both profit and
reputation at the same time.
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REFERENCES
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Wirtz, J. and et. al., 2013. Managing brands and customer engagement in online brand
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