Achieve Target Price and Earn Profits Too!

January 25, 2012 by 3 Comments

Whether launching a new product or expanding capabilities to accommodate our clients growing needs, meeting the target price is a significant barrier to earning new revenue streams and potential profits. Sometimes we take on new business opportunities as a way to gain market share, deepen relationships or to gain an advantage over the competition. While these strategies for new business serve their purposes well, it remains essential not only to meet the target price, but also to be profitable at the target price.

Fortunately, approaching target price challenges from both a design improvement and process improvement perspective allows us to open ourselves to a path toward meeting our objectives. A design and process improvement course can make taking risks less emotional and bring us into the realm of rational decision making. What if a design and process improvement method was consistently employed, and the data collected from these efforts demonstrated that a 10%, 15% or even 30% gain in profitability is likely.

One step in achieving a data driven decision-making model is to create processes that deliver reliable data needed to incorporate into an existing decision making and forecasting model. A process that generates and delivers this kind of information is presented below. It is an iterative process that synergizes with a well known Six Sigma concept, Define, Measure, Analyze, Improve, Control (DMAIC).

Step One: Define Base Process

  • Define base process
  • Create value stream map
  • Delineate sub-processes and assign cycle times to each
  • Identify and document opportunities for improvement
  • Present per product price and improvement opportunities

Step Two: Perform Project, Provide performance Feedback and Improvement Opportunities

  • Actual cycle times
  • Yield reporting
  • Constraint analysis
  • Feasibility study
    • Incorporate actual data to engineer design for manufacturability model
    • Material & equipment suitability
    • Yield and process time optimization

Step Three: Adopt New Process

  • Define new process
  • Create new value stream map
  • Delineate sub-processes and assign cycle times to each
  • Identify and document opportunities for improvement
  • Present per product price and improvement opportunities

Step Four: Perform New Process, Provide performance Feedback and Improvement Opportunities

  • Actual cycle times
  • Yield reporting
  • Constraint analysis
  • Feasibility study
    • Incorporate actual data to engineer design for manufacturability model
    • Material & equipment suitability
    • Yield and process time optimization

This iterative process continues to deepen, creating an improvement perspective and can continue until all potential waste is removed, or can be finished when a desired target price and profit is met.  The data gathered from the process can then be integrated into our decision-making models.

While the decision-making model currently in use may not be well structured and documented, we are making decisions and are therefore using some sort of model. Enhancing our awareness regarding how we go about making decisions and adding a rational perspective to our new business strategies can support our efforts to increase revenues and profits.

Click Here to download a case study supporting this model.

Click Here to begin a conversation on how ASAP can help meet your target price initiatives.

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Complete Brand Packaging Begins With The End In Mind

June 2, 2011 by 2 Comments

A lot of time and resources are spent on branding efforts.  Brand recognition and brand loyalty are considered assets and are tracked and measured. We chose images; colors, shapes and text that we believe will help communicate the kind of experience our target market is going to have when they purchase our products.  In short, we are making promising to our customers and working to earn their trust.

Earning trust is a difficult task and once we entice a customer to buy, delivering on our promises becomes critical.  One strategy to build customer confidence is to incorporate marketing messages into product packaging.  Most purchasing decisions are made in store and the package presentation is the first concrete opportunity to continue delivering on brand experience promises.

For More Information

Check out this video to learn more
about how to prevent product damage within the supply chain.

Click Here to learn more about how
ASAP can help you with your
damaged product issues.

After a purchase is made the product goes home with our buyer.  The next interactions include, opening the outer package, looking at and unpacking the accessories, making sure all components are included, assembling/hooking up/setting up the product and reading the directions.  Each of these interactions is communicating messages about our brand.  The more complicated and difficult these steps are, the less loyal we tend to be about the brand we just purchased.

When considering the brand experience we would like our buyers to have, it is important to think about how the package influences brand perceptions.  Some points to keep in mind when thinking about complete brand packaging include:

  • Product presentation – what is the initial impression at point of purchase
  • Production protection – what level of tamper resistance is needed
  • Product placement – how will the product be placed for purchase
  • Ease of use – the ease of opening, accessory layout and instructions
  • Product enhancement – how can the package facilitate the use of the product

It is important to consider how end users will interact with our products. The way in which the product is packaged can be a useful tool to communicate brand strategies.

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Damaged Product? Modifying Your Pallet Pattern May Be The Solution

January 28, 2011 by 5 Comments

We all have experienced frustrating situations where our product has been damaged while traversing the supply chain. Often our first instinct is to look at the package design for a solution.  While that may help, the solution may lie in simply reconfiguring your pallet pattern.

We have produced a new video that explores how pallet patterns can be modified to eliminate product damage.

To view in a higher resolution, Click Here to watch on YouTube.

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Integrating Brand Strategy Into Product Packaging

September 24, 2010 by Leave a comment

We understand the importance packaging plays in purchasing decisions. Often the quality of the package is only one of the determining factors in the complex purchasing decision-making process. Perhaps the most important factor, however, is how well brand strategy is communicated and integrated at the point of purchase.

While it may seem difficult to incorporate the intangible aspects of brand strategy into product packaging, the first step in the process is obtaining a thorough understanding of the target market. Like all great, simple solutions, there is more to the story than age, race and gender. We need more information to create a connection with our buyers.

Here are a couple points to consider when integrating brand concepts and strategies into product packaging:

Functionality ~ does the packaging promote the product’s use?

Understanding how the target market uses the product is key. Learning how well the package facilitates the use of the product is helpful in identifying opportunities for improvement and product differentiation. A good example is Duracell’s repackaging efforts for its hearing aid batteries. Knowing their target market struggled to open the package, remove the battery and place it into the hearing aid, the company designed packaging to help their buyers use their product. They made it easy to change hearing aid batteries. Integrating functionality into the package redesign brought increased sales leading to brand loyalty.

Typically, products/brands are created to solve a problem within the market place, integrating functionality into product packaging as part of the solution helps communicate brand strategy.

Personality ~ does the packaging reflect the characteristics of both the brand and persons targeted to purchase?

Understanding the traits, behaviors and emotional characteristics of the target market is another important factor in integrating brand into packaging. Knowing what images, colors, textures and shapes appeal to the market is helpful in creating a connection with consumers. Presenting a consistent message between the product and package helps build confidence and trust in brand personality. A good example of this is when ATK, a company that makes bullets, launched a new bullet for duck hunters. The company integrated images and bright colors, into its package design, reflecting personality attributes of its target market. Integrating personality into packaging helped make this a new product launch a success.

Functionality and personality are important factors to consider when integrating brand strategies into product packaging. The benefits of learning more about target markets, and combining this information into product packaging are compelling. Increased sales, brand awareness, brand loyalty, and increases repeat sales all sound great!

Certainly, there are more criteria to consider than just functionality and personality. To learn more about the products discussed and additional criteria and methods, please see the resources listed below.

Duracell EasyTab
ATK Article
Design Matters // Packaging Book

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Great Product Packaging

August 27, 2010 by Leave a comment

We know it when we see it.  It triggers a curious feeling, an impulse to pick it up, to touch it, and to bring it home with us.  No, it is not a puppy!  It is a great product -packaged with great care – in great packaging materials.  Often, in the buyer’s eyes, the package the product is in, is synonymous with the product. People associate the quality of the product and the experience using the product with the packaging (marketing) the product is in. With packaging playing such an important factor in a product’s image and ultimately sales, here are five elements of packaging that helps to create a connection with the buyer.

Materials
Material choice is an important factor in package quality. Material quality ought to reflect the value of the product being sold.  Material choice may include the gauge of shrink wrap; paper weight of a retail box, the mil thickness of a poly bag  or the flute size best suited for graphics reproduction and stacking strength.  Materials selected needs to endure the distribution channel and the retail environment while accurately reflecting brand attributes.

Product Protection Systems
Packaging needs to protect the product from elements within its manufacturing environment and distribution channel.  A product that is well protected may have many layers in its packaging system, such as a primary package that is sealed, a secondary package to reduce movement and a tertiary package.  A retail package’s tertiary packaging may be the retail box placed on the shelf for purchase. An OEM package’s tertiary packaging may be the distribution box that is stored at the distribution location.  Finally, how the product is unitized, its pallet pattern and pallet protection all contribute to how well the product is protected.

For More Information

Check out this video to learn more
about how to prevent product damage within the supply chain.

Click Here to learn more about how
ASAP can help you with your
damaged product issues.

Processes
Packaging processes need to be complimentary to the product’s manufacturing processes, sequenced correctly and given as much attention as the creation of the product itself.  Packaging processes requiring employees to double and triple handle product are inefficient.  Inefficient process can lead to quality problems, such as missing components.

Ease of use
Ease of use factors for the end user include the ease of opening the package, the layout of the product and its accessories and handling for distributors.

Branding
From a brand prospective, packaging needs to communicate both emotional and rational information about the product.  Colors, font choice, images and logo placement on the package creates an emotional response to the product. Text and other content inform the user of product features and benefits.

As consumers, buyers and end users, we have difficulty differentiating the product from its package.  We tend to believe the image communicated in the packaging is the product we are buying.  With this knowledge, It is important to develop great packaging to promote and protect our great products, make connections with our target market, increase sales and help consumers feel good about their purchase decisions.


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Product Packaging & Palletization – Ending Well Matters

July 22, 2010 by 1 Comment

“Seeing is believing, and perceiving creates realities“

The condition of how a product arrives at its destination and it’s interaction with end users is where packaging has the greatest impact.  Painstaking concern is directed at designing the primary packaging and secondary packaging.  Often neglected is the distribution carton and pallet pattern along with the specifications for properly securing and protecting the system for transit throughout the distribution channel. Poor execution of the system creates in the mind of the end user low brand value impressions.

For system clarification, product packaging methods are thought of as levels or layers, such as immediate, intermediate and outer shipping carton.  These package layers and levels are also referred to as primary packaging, secondary packaging and tertiary packaging.

Immediate/primary packaging is the packaging that comes in direct contact with the product and is typically the smallest salable unit.  For instance, the bottle the shampoo comes in.

Intermediate/secondary packaging is the packaging that is in direct contact with the primary package and is also used to group primary packages for better handling.  For instance, the box the toothpaste comes in or the shrink wrapped set of thank you cards.

Outer shipping carton/tertiary packaging is the bulk packaging whose purposes include consolidation, handling, transit, storage and product protection.  This level of packaging can be considered as an individual carton or a unitized pallet. For instance, the outer carton packed with multiple sets of greeting cards or the pallet stacked with outer cartons.

Determining product consolidation and unitized load strategies requires an understanding the packaging system goals.  Based your goals, design strategies such as: component based, system based and compliance based, can be employed.

For More Information

Check out this video to learn more
about how to prevent product damage within the supply chain.

Click Here to learn more about how
ASAP can help you with your
damaged product issues.

Each strategy requires intimate knowledge of distribution channels, as well as unique product attributes, such as climate sensitivities and weight restrictions.  Some important factors in the distribution channels include:

  • Destination locations
  • Modes of transportation
  • Truck, rail or container sizes
  • Atmospheric conditions
  • Storage conditions

Understanding environments within distribution channels helps to determine the kind of distribution cartons, pallets, stacking patterns and pallet protection needed to safely deliver products to market.

With all the complexities inherent in packaging systems and methodologies, it becomes easy to understand how and why the tertiary details are often overlooked.  However, if we take the next step in the process, often we can avoid costly product damage.  If there are current issues with product damage, perhaps the first places to look are unitization, pallet patterns and pallet protection.  Sometimes using different stretch wrap materials and methods, banding, slip sheeting, edge protectors or reconfiguring a pallet pattern can easily solve these problems.

Here are a few great resources for more informationon this multifaceted subject:

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Packaging & Product Developement, Earlier Is Better

July 8, 2010 by Leave a comment

“Waiting for the launch stage to consider packaging is too late”

Your package is the client’s/end user’s first concrete interaction with your product. It is the moment where the cumulative messaging and marketing efforts are judged. It is the first opportunity to create trust.  Is the package in alignment with your prior messaging; does it communicate the virtues extolled in the advertising campaign?

With such an opportunity to earn trust and create a connection with the end user, it makes sense to think about packaging early in the product development process.  While this consideration may not be necessary in the ideation or scoping stages, there is room for package design and development in the business case and development stages.

According to Robert G. Cooper’s book Winning At New Products, the summary of activities within business case stage are:

  • User needs and wants study
  • Competitive analysis
  • Market analysis
  • Detailed technical assessment
  • Concept testing
  • Financial/business analysis
  • Plans of action

Package development, design and process definition has implications in concept testing and financial/business analysis activities taking place within the business case analysis.

Understanding how the package will look and feel and how the end user will interact with the package enables a more robust concept testing opportunity with end users.  The package design is demonstrated as a complete product prototype.

Once the package design is known, the packaging process is developed.  The packaging process has an effect on the financial/business analysis activity.  For example, if the package requires ultrasonic sealing or blister pack, the organization needs to conduct research to understand whether or not the process fits within core competencies and the investment costs of packaging equipment.  This information, along with the processing costs, is incorporated into the business analysis for a more accurate manufacturing cost model.

Integrating packaging strategies earlier in the product development process has advantages from both branding/marketing and cost perspectives, allowing you to build a more accurate business case for your product.

 

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Avoid The Returns Bin, Package Your Product On Purpose

June 30, 2010 by Leave a comment

“Don’t judge a book by its cover, but you’re clients are judging your product by its package.”

You know how it is, you are at the store, ready to make a purchase, but the package looks beat up, torn apart and wrinkled. The instant assumption is that the product inside is cheap or poor quality.  As consumers we make these assumptions all day long!  Whether we are buying cereal, electronics or a vehicle, the  appearance of the package dictates our choices.

When making purchasing decisions, we buy on both rational and emotional factors.  Rationally, we believe the functional attributes of the product will meet our expectations.  However, if the outer package does not appeal to our emotional needs of safety and trust, we simply move to the next available alternative.  Even if it is a generic substitute.

The consequences of these subconscious assumptions about the quality of the product has a real impact on brand loyalty and sales.  Often the products whose packaging is damaged or just doesn’t look and feel right, is placed directly into the discount bin or even worse, returned directly to the distributor and manufacturer.

To avoid the discount bin, three critical components to consider in your packaging system include: design, material and process.

Design
A package design needs to address both the rational and emotional needs of the end user, while supporting the attributes of the product.  The package structure speaks to the rational and the graphics, images and colors address the emotional aspect.


Materials
Choices of materials need to support the design structure, branding appeal and price.

Process
The packaging process created needs to consider the how material and product are assembled to create a package that is aligned with both functional product needs and appeals to the buyer’s emotional needs.  Additionally, the process need to be articulated with written work instructions, estimated time at each step and organized in the most efficient sequence.

The packaging system is a system, which means that each component affects the other.  It is possible to have the best design, use the best materials, but if the process is flawed it can destroy the efforts of the whole system resulting in costly returns.

A packaging system that accounts for each component of the system and incorporates both the rational and emotional needs of the end-user creates an intentional, purposeful package and the pay-off is brand loyalty.

ASAP is excited to roll out our new Process Improvement Consultation offer. Click here to learn more.

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