Product Launch Report by Lauren Nicholson

PRODUCT LAUNCH Lauren Nicholson // DP264 // RICHARD MORRIS

CONTENTS 1.0 Introduction

Marginal Costing

2.0 Product Verification

Break Even Analysis

Pricing

QFD

FMEA

5.0 Professionalism

Test Plan

3.0 Product Sales

Revised Costings

Types of Intellectual Property

31 35

Strategty of Focus

Issues and Management

Marketing Mix

Selling Intellectual Property Rights 36

Sales Forecasting

Ethics of IPR

4.0 Product Viability

References

Direct Costing

Absorption Costing

Appendix

1.0 INTRODUCTION

1.0 Introduction Product Launch for Routine Encouragement Device. Curved touchscreen LCD screen allows user to interact with simplistic software programme, providing them with a routine and activities to complete through out the day. Originally designed for sufferers of Chronic Fatigue and Rheumatoid arthritis over the age of 65 in the UK.

36 37

2.0 PRODUCT VERIFICATION 2.1 Test Plan The purpose of the test plan is to evaluate the conformance credentials of product prior to release into the marketplace. The test plan includes product safety and standards legislation, testing for simple everyday use by external bodies and benchmarking against competitors. References have not been rereferenced in the bibliography.

PRODUCT SAFETY AND STANDARDS URS (1)

The product must be legal to sell to the European market

TEST TYPE

TEST RESULT

ACTION

RESPONSIBLE

Standard Test, see relevant directives

N/A

L.N

TEST DESCRIPTION

The directives can be accessed at http://ec.europa.eu/enterprise/policies/singlemarket-goods/cemarking/professionals/index_en.htm

CRITERIA

The product must achieve CE markings under the two applicable directives, Electromagnetic Compatibility, and Restriction of Hazardous Substance in Electrical and Electronic Equipment. The compliance of both can be self-certified by the manufacturer, but to ensure the URS is fully met it is advisable that they also have the compliance confirmed by an independent body.

JUSTIFICATION

It is important that the product achieves the CE markings to allow it to be sold in Europe, drastically increasing the size of the potential market. The The CE marking for Electromagnetic Compatibility is important because it ensures that the product does not interfere with other electrical devices and damage them; this is especially relevant around equipment such as pacemakers, where the consequences could be fatal. The Restriction of Hazardous Substance in Electrical and Electronic Equipment is key in protecting the user from potential damage caused by contact with materials in the product.

URS (2)

The Li-ion battery must meet the set standards for batteries of its type in commercial, electrical products.

TEST TYPE

TEST RESULT

ACTION

RESPONSIBLE

Standard Tests, UL 1642 and NEMA c18.2M

N/A

L.N

TEST DESCRIPTION

In order to be awarded with the UL 1642 standard the battery must pass the following abuse tests; external and internal short circuits, abnormal charge, forced discharge, crush, impact, shock, vibration, temperature cycling, low pressure (altitude) and projectile. NEMA uses tests of the same name (with slightly varied methods) except for internal short circuit and projectile, which are replaced by drop, continuous low rate changing, molded casing heating test, open circuit voltage and insulation resistance. These tests can be viewed in more detail at http://newscience. ul.com/wp-content/uploads/2014/04/Safety_Issues_for_Lithium_Ion_Batteries1.pdf

CRITERIA

In order for the product to be awarded the standards it must pass all of the tests listed above. Passing a test means that a sample cell can withstand a certain level of conditions without causing an explosion or fire, or showing signs of leaking, venting or igniting. It is important that the Lithium Ion battery is able to pass these tests because they mimic extreme scenarios- so that whatever hypothetical misuse the user subjects their product to, it should be able to handle it (and at the very least if it does break, it will not cause them any harm in the process)

JUSTIFICATION

An example of one of the more relevant tests involved is the continuous low rate charging test. The test subjects a full charged cell to an uninterrupted charge (at a specified rate) for a long period of time (also specified) This imitates a user leaving the product to charge overnight whilst they are sleeping, unplugging them when they want to use it rather than when they are fully charged.

URS (3)

The product must adhere to standard BSI safety requirements for audio apparatus with audio capabilities.

TEST TYPE

TEST RESULT

ACTION

RESPONSIBLE

Standard Test, BS EN 60065:2002+ A12:2011

N/A

L.N

CRITERIA

This is a standard test, which would be carried out by an independent body on behalf of the British Standards Institute. The exact criteria and testing methods and not readily available without payment. The test is important because it investigates electronic safety principals and requirements of electronic components. It aims to reduce injury and damage from electric shock, excessive temperatures, radiation, implosion, mechanical hazards and fire.

JUSTIFICATION

It is important that the standard is met in order for the product to keep up with some of the larger competitors in the market. For instance, this BSI is conformed to by the largest global tablet manufacturers Apple, see http://demandware.edgesuite.net/aajh_prd/on/demandware.static/Sitesbeats-Site/Sites-beats-Library/en_US/v1431045931492/pdf/Studio_810-00025_DoC. pdf

URS (4)

The product must not overheat with extended use.

TEST TYPE

TEST RESULT

ACTION

RESPONSIBLE

Worse Case Scenario

N/A

L.N

CRITERIA

Product must be able to withstand misuse. Product will be tested to breaking in order to establish its limits.

JUSTIFICATION

This is an incredibly crucial URS as it poses the largest risk (see FMEA) The product has the potential to explode or burn the user if it has not been tested sufficently.

PRODUCT LIFE AND RELIABILITY URS (6)

The product must be useable in standard operating temperatures for commercial products (0°C to 35°C)

TEST TYPE

TEST RESULT

ACTION

RESPONSIBLE

Temperature Testing (+ test to breaking)

N/A

L.N

TEST DESCRIPTION

The product will be tested in a specialist lab where the temperature can be changed incrementally. The product will first be interacted with at normal room temperature as a constant that the other results can be compared to. All of the products functions will then be tested after 20 minutes at the two extreme temperatures.

CRITERIA

The product will pass the criteria if it is still are operating at its optimum level after being subjected to temperatures of 0 and 35°C for 20 minutes. The temperature can then be continually altered to find the point at which the product ceases to work. The product should be able to withstand any conditions the user may experience. 0°C to 85°C is the set standard operating temperatures for commercial products, however 35°C is often the cap for this type of electrical good. (http://en.wikipedia. org/wiki/Operating_temperature) http://sensors-actuators-info.blogspot.co.uk/2009/08/temperature-range-fordifferent.html

JUSTIFICATION

https://www.apple.com/uk/batteries/maximizing-performance/ The test will be 20 minutes long to simulate the length of time it will take for the user to complete one of the set/ timed activities on the device. This test was designed around existing touch screen testing taking place by external bodies. The specification for which can be accessed here: http://www.magictouch. com/KEYTEC%20Resistive%20Touch%20Screen%20Specification.pdf

URS (7)

The product must be able to withstand impacts that it is subjected during its general misuse by the user.

TEST TYPE

TEST RESULT

ACTION

RESPONSIBLE

Shock Loading (Accelerated)

N/A

L.N

TEST DESCRIPTION

The product will be dropped from heights of 30cm, 70cm and 90cms onto hard wooden and tile surfaces using a machine. The product will pass if it is able to withstand 416 drops across all three heights.

CRITERIA

The product will pass if it is able to withstand all 416 drops. If the product does manage to pass it should then be continually dropped until breaking, in order to find out its limits.

When being used by the consumer the product will be without protection. The nature of the product means that it may be prone to being dropped and placed down without care. Accelerated shock loading testing will use mechanical shock machines which will simulate all of these knocks and drops in a condensed time period. Justification of height choices: 30cm mimics the product being dropped from a low height onto surface (standard accident) 70cm is being dropped from the average table and 90cm would be the approximate height if a person dropped the product from around waist height whilst standing.

JUSTIFICATION

The product has a useful life of 4 years, and assuming that the product receives some form of impact/ drop twice a week, the product should be dropped {(52*2)*4] =416 times to prove its durability. Wooden and tiles surfaces were as the most common and hardest internal floor surfaces. If the product is able to withstand being dropped onto them, it will definitely be able to withstand other floor surfaces such as carpet. Above is how the manufacturer would carry out the test; however this task can also be outsourced. An example of this test would be ASTM D333e, provided by the American Society for Testing and Materials. The ASTM creates voluntary standards for international products. Their test replicates real-life shock environments to determine level of fragility. The package is dropped under different conditions where the acceleration and velocity are varied. More information can be accessed at http://www.astm.org/Standards/D3332.htm

URS (8)

The touchscreen must be able to withstand continuous use without showing any signs of stress throughout the productâ&#x20AC;&#x2122;s useful life.

TEST TYPE

TEST RESULT

ACTION

RESPONSIBLE

Accelerated Testing

N/A

L.N

CRITERIA

The product will be put under accelerated testing where the screen is pressed repeatability at a force of 10-80g, 218,400 times. The product touchscreen will have to withstand continuous use (several times a day, every day over a life span of years.) The estimate for the test was 50 touches, 3 times a day, every day, for four years- a total of 218,400.

The screen should show no signs of physical deterioration, lack of sensitivity or accuracy. The screen will be tested at 10-80g for each touch of the screen. This is more than those with rheumatoid arthritis would conceivably be able to exert, so the performance should be ever better when not tested to this limit. These values were taken from an external body that test touch screens, the specification for this JUSTIFICATION test outlined here: http://www.magictouch.com/KEYTEC%20Resistive%20Touch%20 Screen%20Specification.pdf For the productâ&#x20AC;&#x2122;s reliability to be fully accounted for, all of the mechanical tests for a touch screen (outlined in the document) would be passed by the product. This is related to BS EN ISO 9241-410: 2008+A1:2012 (accessed via British Standards Online, https://bsol-bsigroup-com.ezproxy.brighton.ac.uk/Bibliographic/ BibliographicInfoData/000000000030227734) which investigates input devices, including touch-sensitive screens)

URS (10)

The products mean time before failure (MTBF) should not increase throughout the first 4 years of the product’s life.

TEST TYPE

TEST RESULT

ACTION

RESPONSIBLE

Reliability Testing

N/A

L.N

CRITERIA

The product should be tested in order to map the ‘bathtub curve.’ The rate of random failures with constant failure rate (discovered through accelerated testing) and the rate of ‘wear out’ failures. (http://en.wikipedia.org/wiki/Bathtub_curve) In order for the product to pass the number of wear out failures at the end of the product’s useful life should be no more than 15% greater than the rate of random failures at the beginning of the products life.

The user is relying on the product to support them, and product failures can damage JUSTIFICATION the relationship with the product. Product failures are expected, but as long as they are kept to an absolute minimum they should go unnoticed in day-to-day use. URS (11)

The touchscreen must be cleanable/ maintainable after extended use.

TEST TYPE

TEST RESULT

ACTION

RESPONSIBLE

Accelerated Testing

N/A

L.N

TEST DESCRIPTION AND CRITERIA

The screen will undergo constant use via accelerated testing. The product will then be tested to see if a build-up of dirt prevents the screen from working at its optimum level. A further test will be carried out to check that the screen can be cleaned and that all traces of dirt that have gathered can be removed. The product will pass if, after the testing, the screen is as clean as it was when factory new and is still working at its optimum level.

This related to section J 1.5 of BS EN ISO 9241-410: 2008+A1:2012 (accessed via BSOL) ‘Maintainability properties relevant for usability are related to cleaning the screen, which usually collects sebum from finger tips on which dust and grime JUSTIFICATION are later deposited. NOTE Touch-sensitive displays can be utilized to reduce the maintenance required for the operation of some devices or functional units.’ The screen can become unclean, and it is important that it can withstand being cleaned for its continued use. URS (12)

The product must be able to cope with the number of interactions it will receive. E.g. can the on/off button cope with the number of times it is going to be pressed?

TEST TYPE

TEST RESULT

ACTION

RESPONSIBLE

Accelerated Testing

N/A

L.N

TEST DESCRIPTION

The product will be tested using a machine that will press the buttons in quick succession to replicate the products use throughout its useful life, in a shorter time period.

CRITERIA

In order to pass the buttons must not show any visible signs of damage, become loose and ‘spongy’ or have stopped working after being pressed 15,600 number of times.

The product must be able to meet the users expectations and remain fully functional throughout its useful life. Estimating that the user turns on the product on at the JUSTIFICATION beginning of each day and off and off at the end of the day it will be pressed twice a day, over 4 years, [((5*15)*52)*4))] = 2,912.

PACKAGING AND SHIPPING URS (13)

The packaging must be able to protect the product against impacts/shock loading during its distribution via land and sea.

TEST TYPE

TEST RESULT

ACTION

RESPONSIBLE

Shock and Fragility Test

N/A

L.N

TEST DESCRIPTION

The packaging (with encompassing product) will be dropped from the varying heights of 1m, 2m and 5m onto a cement surface 20 times.

CRITERIA

In order to pass the product must not show any signs of damage after any of the drop, proving that the packaging was able to protect it.

An example of this test would be the ASTM D5487. The American Society for Testing and Materials provides voluntary standards for international products. The test JUSTIFICATION replicates free-fall drop testing, with dropping surfaces not perpendicular to the drops to create the most unpredictable and therefore real life-testing environment. URS (14)

The product must have a shelf life of at least 6 months

TEST TYPE

TEST RESULT

ACTION

RESPONSIBLE

Materials and Components Review

N/A

L.N

CRITERIA

The conditions of storage/ sitting on a shop shelf will be accelerated and the parts will be monitored to see how they react. In order to pass the components should show few signs of breakdown or degradation e.g. corrosion of electrical components.

In the manufacturing process there are many factors with the potential to cause delay and issues with the product’s release and distribution. It is important that should these issues arise, and the product is left in storage for an extended period of time (or alternatively on a shop shelf), that its quality does not degrade and in a good JUSTIFICATION enough condition to be sold. As many of the electronic components have been ‘bought in’ this test allows the manufactures to check for any built in obsolescence that they might not be aware have been built in by the components sources. URS (15)

The packaging of the product must protect it from exposure to damp

TEST TYPE

TEST RESULT

ACTION

RESPONSIBLE

Condition Recreation

N/A

L.N

TEST DESCRIPTION

The product will be placed inside the packaging, and then inside a specialist chamber where moisture conditions can be simulated. The level of moisture present in the chambers atmosphere can be digitally altered and the effects on the packaging monitored.

CRITERIA

The packaging will pass if the product is still operating at optimum level after having been in the chamber.

The product could be vulnerable to damp during it transportation and during storage. A back log of products may mean products being stored in warehouses for months at a time before they are ready to be disturbed, consequently they could be facing damp conditions, especially if they are in contact with the warehouse floors or JUSTIFICATION walls. It is important that the packaging is able to protect the product from extended periods of moisture exposure because it is an electrical good, and the presence of water could break it before it had reached the user. URS (16)

The lithium ion battery must apply to the relevant standards that allow it to be legal for transportation.

TEST TYPE

TEST RESULT

ACTION

RESPONSIBLE

Standard test, IEC 62281

N/A

L.N

TEST DESCRIPTION/ CRITERIA

In order to be awarded with this standard the battery must first pass 9 different testing protocols, which makes sure it can withstand a certain level of abuse. These are external short circuit, abnormal charge, forced discharge, impact, shock, vibration, temperature cycling, low pressure altitude and drop. The exact nature of these tests can be accessed at http://newscience.ul.com/wp-content/ uploads/2014/04/Safety_Issues_for_Lithium_Ion_Batteries1.pdf

The IEC 62281 is a test designed by the International Electrotechnical Commission (meaning that by passing this standard the product would be suitable for sale in Europe) It regards the Safety of Primary and Secondary Lithium Cells and Batteries JUSTIFICATION During Transportation. This would ensure that the battery could withstand being transported without the risk of it becoming hazardous or no longer functioning correctly.

PRODUCT FEATURES URS (17)

The product must be operable with one hand

TEST TYPE

TEST RESULT

User Group Interaction N/A

TEST DESCRIPTION

ACTION

RESPONSIBLE

N/A

L.N

A selection of users will be given the product and asked to use them for an extended period of time, whilst paying notable attention to their levels of comfort. They will then be asked to repeat this using one hand. The user group will then be given selected tasks to complete using the device, first with one hand and then with two. These two times will be compared.

CRITERIA

In order for the product to pass the subjective opinions of the user group must be that the product has been comfortable to use (in relation to their arthritis), whether they are using one hand or two. In order to quantify the results, in order to pass the time difference between the single and double handed interactions must be no more than 30%.

JUSTIFICATION

Research shows that RA sufferers have varying levels of dexterity in their hands. The ability to work with one hand encourages a simplistic design which the user could operate in whatever manner feasible to them (dependent on their flare ups). Every single user will have a capability in terms of their dexterity and their abilities, this test should encourage the product to be inclusive for all.

URS (18)

The product must be useable in the dark

TEST TYPE

TEST RESULT

User Group Interaction N/A

ACTION

RESPONSIBLE

N/A

L.N

TEST DESCRIPTION

The selected test participants will be timed carrying out the following range of tasks in normal daylight conditions; plug in charger, select an activity, turn the device on/off. The users will then repeat these tasks whilst in low-level light conditions.

CRITERIA

In order for the product to pass the test the time taken to carry out the task in the dark must be no more than 20% greater than the time taken to carry it out in normal conditions.

JUSTIFICATION

The product aims to support the user whenever their arthritis is affecting them, and this can occur at any time of day. The device should be operable using cues and intuition, also making it better for use by those with visual impairments. It would be expected that a change in light levels would slow down the user, and a 20% tolerance accounts for this whilst proving that the product is not too difficult to operate.

URS (19)

The product must be useable with varying levels of dexterity

TEST TYPE

TEST RESULT

User Group Interaction N/A

TEST DESCRIPTION

ACTION

RESPONSIBLE

N/A

L.N

The selected test participants will all have varying levels of arthritis in their hands which affect their dexterity. They must be able to complete several basic interactions with the product for it to pass. These tasks will be to turn the product on/off using the button, select an activity using the touch screen and plug in the charger. Alternatively the product can be tested by using a pair of specialist gloves, which can simulate reduced movement, similar to those produced by the University of Cambridge. (http://www.inclusivedesigntoolkit.com/betterdesign2/gloves/gloves.html)

CRITERIA

A control user with good dexterity will be timed completing the test. In order for the product to pass the time difference between the user with good dexterity and the users in the lowest percentile for dexterity to complete the task must be no more than 20%.

JUSTIFICATION

The product has been designed for sufferers of Rheumatoid Arthritis, a permanent physical condition which can occur in the hands, fingers and wrists. This test is crucial to ensure the design is inclusive and that the target user group are able to cope with the physical demands the product puts on them.

URS (20)

The product should have A useful life within the userâ&#x20AC;&#x2122;s expectations.

TEST TYPE

TEST RESULT

ACTION

RESPONSIBLE

Varied

N/A

L.N

CRITERIA

The product must be able to operate at its optimum level of a minimum of 4 years. This can be worked out through accelerated testing of the components, investigating the degradation of the materials present in certain environments etc.

JUSTIFICATION

In a fast moving industry electrical goods are constantly being renewed and updated as technology advances at such a rapid rate. The complex electrical components sourced to make this product push up the price it needs to retail at, and a higher price brings expectations from the user of quality and longevity. Note: The product is only expected to work at its optimum for 4 years, but will still be operable for years after that should the user choose not to replace it with a newer model.

URS (21)

The battery must be able to last for long enough to satisfy the user’s expectations.

TEST TYPE

TEST RESULT

ACTION

RESPONSIBLE

Cycle Testing

N/A

L.N

TEST DESCRIPTION AND CRITERIA

JUSTIFICATION

A batch of cells is subjected to repeated charge/ discharge cycles in succession. The number of charge/ discharge cycles the battery can perform before its nominal capacity (a batteries full load) falls below 80% of its initial rated capacity. Assuming the product is charged once a week, for their expected useful life of 4 years, the battery should be able to complete (52*4) = 204 cycles in order to pass. Certain cycle tests also allow for various ‘performance parameters’ to be altered (e.g. temperature, capacity, impedance etc.) to create a test environment realistic to the one the battery and the product will be used in. This makes the battery guarantee more accurate and more reliable. More information about cycle testing at www.mpoweruk. com/testing.htm

URS (22)

The product must provide a sound quality to a degree satisfactory to the user

TEST TYPE

TEST RESULT

ACTION

RESPONSIBLE

Objective and Jury Testing

N/A

L.N

Objective methods: http://www.salford.ac.uk/computing-science-engineering/ research/acoustics/psychoacoustics/sound-quality-making-products-soundbetter/sound-quality-testing/sound-quality-testing-objective-metrics TEST DESCRIPTION AND CRITERIA

Subjective Methods: http://www.salford.ac.uk/computing-science-engineering/ research/acoustics/psychoacoustics/sound-quality-making-products-soundbetter/sound-quality-testing/sound-quality-testing-subjective-methodsIn order to pass, the product must be able to meet the criteria for both objective (machine measured) tests and subjective (user/ jury tests)

JUSTIFICATION

Obtainable performance in relation to the economics. A balance on audio quality must be reached, because you cannot demand optimum performance for little cost. Even if the manufacture is able to make it, it does not mean the consumer will be willing or be able to afford it. Therefore the product must provide a sound quality that the user finds satisfactory for the price they are paying. This can be gauged using jury testing, but is backed up using objective methods to make sure that the technical specifications of the audio meet the basic levels.

URS (23)

The digital interface should be intuitive and easy to us, regardless of the user’s previous experience with digital technology.

TEST TYPE

TEST RESULT

ACTION

RESPONSIBLE

Objective and Jury Testing

N/A

L.N

TEST DESCRIPTION AND CRITERIA

The obviousness of operation is categorised in BS EN ISO 9241-410: 2008+A1:2012, section J.2.1.2 (accessed via BSOL) These where C1 (known or visible without the needs for additional instructions and information) C2 (detectable by the user by trial and error) C3 (learnable by means of simple instructions) and C4 (learnable by means of special training). The test will involve giving the product to users for the first time, monitoring how they are able to interact with and asking them to rate it as one of the above categories. For the product to pass 100% of results should fall between C1-C3, 80% should fall between C1-C2 and over 20% should consider the product C1.

JUSTIFICATION

This test accounts for the wide variety of experience users may have had with touch screen technology before. It is expected that some will struggle more than others, but the test ensures that the product allows the user to teach themselves. As there is no additional training support currently available it is important that no user feels they would need training in order to use the product.

URS (24)

The product must weigh less than 215 grams

Test Type

TEST RESULT

ACTION

RESPONSIBLE

Weighing

N/A

L.N

CRITERIA

The product will be weighed, and in order to pass it must weigh less than 215 grams.

JUSTIFICATION

Weight is important because affects how comfortably it sits in the user’s hand, the products handling on the shop floor, transit and in the users situation with the consumer. 215 grams is the benchmark because it is the weight of the most popular tablet device for the over 65s currently on the market, the Amazon Kindle (http://www.digitalversus.com/ebook-reader/amazon-kindle-paperwhite2nd-generation-p17150/test.html) Product weight must be kept low to account for muscle weakness in RA sufferers, especially in the hands and wrists.

END OF LIFE URS (25)

The product must meet the requirements made by the Environmental Protection Act (1990) and the WEEE (Waste, Electronic and Electric) Directive.

Test Type

TEST RESULT

ACTION

Tests set as part of standards

N/A

CRITERIA

The environmental protection is made of three parts, and it’s overall objective focuses on land, water and air pollution control. The full act accessible at http://www. legislation.gov.uk/ukpga/1990/43/contents. The WEEE directive concentrates on the product’s end of life and it’s disposal (often combined with the RoHS Directive on the use of certain hazardous substances in electrical and electronic equipment) WEEE: http://eur-lex.europa.eu/legal-content/EN/TXT/?uri=CELEX:32012L0019 RoHS: http:// eur-lex.europa.eu/legal-content/EN/TXT/?uri=CELEX:32011L0065

JUSTIFICATION

Electronic equipment is one of the fastest growing waste streams in the EU, and if not properly managed, can cause major environmental and health problems. The directive improve the collection, treatment and recycling of electronics at the end of their life is essential. Not only are the directives compulsory to allow the product to be sold in the EU, they should be expected from responsible manufacturer.

RESPONSIBLE L.N

design could work together.

Can the qualities exist together? All green as everything in the

Although a basic and crude comparison, the product was able to score better against these criteria than its two competitors. Indicating it did meet the users needs and there is a place for it in the marketplace.

Conclusion

basic health statistics. Score: -2

Product 2: Intel Health Guide PHS6000 Chosen for its close similarity to the product in question. Home touch screen device capable of taking and tracking

industry. Widely available, app choice broad. Score: -1

Product 1: Apple iPad and Health Monitor App Chosen as the market leader in the touch-screen tablet

A competitor analysis was a used as a way of benchmarking this product with those existing in the market place. The competitors were scored as better (+) the same (/) or worse (-) than the product for meeting each of its own criteria.

Competitor Analysis

The quality function deployment is used as part of the product testing to show that the original needs of the consumers had been met. The example here has been filled out through assumptions, but focus groups and user trials would be used to provide more reliable feedback. The QFD is important because it provides the opportunity to quantify something that had previously been entirely subjective.

Introduction

2.2 QUALITY FUNCTION DEPLOYMENT

1 Battery

Item

Minor (affects little of the system)

Moderate

High (loss of primary function)

Very High (inoperable, hazardous)

4/5/6

7/8

9/10

Incapable of holding charge

Overheating

9/10

7/8

4/5/6

Rating

Key :D

Detection

Not functional, durability of battery too insufficient for correct utilization of product. Constant shut down. Dissatisfaction of customer.

Risk of explosion. Risk of burning the user. Causing permanent damage to the battery.

Manufacture error, negligent usage by customer (over charging or put in nonambient temperatures) or aging.

210

189

RPN

Risk Priority Number (SxOxD)

Very high rate

High (repeated failure)

Moderate/ occasional

Potential Cause(s)

RPN

9/10

7/8

4/5/6

Relatively few failures

No known occurrence

Occurrence

Extended use. Exposure to direct sunlight. Sealed battery casing. Manufacture error.

Fault passed undetected

Low chance of detection

Moderate chance of detection

High chance of detection

Almost certain to detect

2/3

Key :O

Accelerated testing. Close supervision and quality inspection during manufacture.

Stress/ worse case scenario testing.

Current Process Controls

failure. The design has been broken down to the simplest components and assemblies, so that any poor design (highest risk priority number) with the capability to weaken the whole system can be refined and improved. In addition, an FMEA is a good way to identify areas for testing as whole product testing can be incredibly expensive.

Certain, fault caught in testing

Meaning

Potential Effects of Failure

Very Minor

Potential Failure Mode

No Effect

Function

Meaning

Severity

Rating

Key :S

Providing energy (DC power) to operate all components

KEY:

The FMEA process (specifically a design FMEA) has been implemented to help identify potential areas of failure in the developed product. It allows these potential failures to be ranked in terms of their severity of failure, likelihood of failure and how easy or difficult it is to detect the

Introduction

2.3 FMEA (FAILURE MODE AND EFFECT ANALYSIS)

Allows the user to perform/ execute operation on the device

Turn the device on or off

3 On/Off Button

Function

2 Touch Screen

Item

Device not fully functional. Interactions are frustrating. Confuses and irritates the user. Poor aesthetics. Puts across low quality product. Upsets user.

Dead pixels

Misaligned/ inaccurate responses

External scratches

Overuse by user, pressing unnecessarily. Or poor quality manufacture/ assembly.

Parts of screen become unusable. User not able to use product to full advantage. Company loss due to refunds.

Incorrect colours

Button becomes ‘spongey’

Affecting those with poor eyesight. Product not fully inclusive and user does not get the intended experience.

Black screen/ Device not functional. no image Annoyance of consumer. displayed Company loss dues to refunds.

Potential Effect of Failure Incapability to execute actions. Inability to use product, annoyance of consumer. Company loss dues to refunds.

Doesn’t respond to actions; broken

Potential Failure Mode

Manufacture negligence and errors in assembly, or poorly made by original manufacturer. Dropped by user during use.

Connection could become faulty and button does not work reliably. Feels broken, not satisfying to use causing displeased customer.

Mishandled during assembly process or by user.

Manufacture negligence and errors in assembly, or poorly made by original manufacturer. Dropped by user during use.

Manufacture negligence or poorly made by original manufacturer. Software issue.

Manufacture errors. Wrongly used by consumer. Inappropriate technology.

Falls, water infiltration, manufacture negligence and errors.

Potential Causes

192

RPN

Accelerated testing. Close supervision and quality inspection during manufacture.

Quality inspections of assembly line.

Close supervision and random inspections during manufacture.

Current Process Controls

Power supply input

Protection of internal components

4 Housing

5 Charger

Turn Device on or off

Function

3 On/Off Button

Item

Potential Effect of Failure

Unappealing aesthetics, lowers resistance. User dissatisfaction. Incapable of supplying electric energy to the device to charge it Risk of explosion. Risk of burning the user. Causing permanent damage to the product.

Low impact resistance

Scratches

Internal; connector

Overheating

Low resistance to physical contact leading to breakage, customer dissatisfaction and refunds.

Unappealing aesthetics. Does not fit with brand image.

Incorrect colour

Unappealing aesthetics (cracking etc.) Uncomfortable for the user to hold.

Uncomfortable to hold. Incorrect Size Doesnâ&#x20AC;&#x2122;t fit in the packaging designed for it

Broken, damaged or warped

LED was faulty when LED does not manufactured. Bulb has worn work out after prolonged use.

Potential Failure Mode

Extended use. Exposure to direct sunlight. Manufacture error.

Manufacture errors. Overuse, used outside ambient temps.

Manufacturing errors. Bad material batch or problems with vacuum form mould. Made need cleaning or replacing. Usage by consumer. Manufacturing process.

Manufacturing errors. Problems with vacuum form mould. Made need cleaning or replacing. Manufacturing errors. Exposure to direct sunlight

Manufacturing errors. Bad material batch or problems with vacuum form mould. Made need cleaning or replacing.

Difficult for the user to know quickly if the product is on or off. Frustrating for them.

Potential Causes

189

128

144

RPN

Stress/ worse case scenario testing.

Tests/ inspection of bought in components

Checks on tooling Quality inspection during production

Regular checks performed on machine equipment. Close supervision.

Quality inspection during production

Regular checks performed on machine equipment. Close supervision.

Accelerated testing. Quality inspection during manufacture.

Current Process Controls

Function

Errors output for the given input from the software

LED was faulty when LED does not manufactured. Bulb has worn work out after prolonged use.

LEDs do not give correct output

Inoperability of design. High dysfunctionality, short circuit.

Errors output for the given input.

Output Failure

Physical damage

User is incapable of operating the device without frustration. Whole device malfunctions. Improper output.

Slow operation/ freezes

Difficult for the user to know when the product needs charging. Could lead to overcharging and battery damage. Difficult for the user to know when the product needs charging. Could lead to overcharging and battery damage.

Input hardware problem (touch screen or power button) or software problem. Falls, water infiltration and manufacture errors . Poor internal connectivity.

Incorrect software or poor software quality. Programming failures or poor memory capacity.

Incorrect software or poor software quality. Could be battery issue. Programming failures or poor memory capacity.

Pontential Causes

111

180

RPN

Accelerated testing. Quality inspection during manufacture.

Close supervision.

Quality inspection during manufacture.

Tests/ inspection. Closer supervision during manufacture.

Tests/ inspection. Supervision during production.

Tests/ inspection of software. Supervision during production.

Current Process Controls

and being unresopnsive to commands, and the charger over heating. This allows funding and development time to be focused on these few areas, rather than speading the resouces thinly around all 23 potential failure modes.

Crashes/ self shut down

Potential Effect of Failure Device malfunctions and becomes unusable. User could lose their data. Creates problems for the hardware. Improper output.

Potential Failure Mode

The FMEA showed the potential failure modes with the highest risks were associated with the battery, that it would over heat or that it would be incapable of holding itâ&#x20AC;&#x2122;s charge. This was followed by the touchscreen being broken

Conclusion

8 LED Flash and indicators remind the user when to charge the battery

7 Internal The physical Hardware components. Interprets software instructions.

6 Digital Controlling Interface the devicesâ&#x20AC;&#x2122; (software) hardware/ functionality

Item

Battery

Touch Screen

Item

192

Black screen/ no image displayed

Incorrect colours

Dead pixels

210

Incapable of holding charge

Doesnâ&#x20AC;&#x2122;t respond to actions; broken

189

RPN

Overheating

Potential Failure Mode

Source the touch screen from a reliable and reputable manufacture. Problem less likely to occur, and able to hold them accountable if anything does go wrong. Conduct more rigorous checks on the production line. Source the touch screen from a reliable and reputable manufacture. Problem less likely to occur, and able to hold them accountable if anything does go wrong. Conduct more rigorous checks on the production line. Source the touch screen from a reliable and reputable manufacture. Problem less likely to occur, and able to hold them accountable if anything does go wrong. Conduct more rigorous checks on the production line.

Include certified charger with product (discouraging the use of third party ones) Have screens to tell them when to plug and unplug their device to minimise over charging, make the battery accessible so it can be replaced if it becomes exhausted or damaged.

S 9

Action taken

126

RPN

25%

33%

50%

67%

57%

33%

manufacturing methods, to more rigours testing and closer supervision during production. The severity, occurrence and detection ratings of these failure modes have then be recessed to create a new risk priority number. To evaluate how successful the actions taken were, the final column shows the percentage difference between the original and new RPN.

Make sure battery is not sealed in place (allow transfer of air) Automatic shut-down when product becomes too hot.

The FMEA process in the previous table helped to identify the potential areas of failure, whereas this table shows how these failure modes can be reduced through various actions, from changing materials and

Introduction

2.4 FMEA: ACTIONS TO REDUCE RISK

Touch Screen

On/Off Button

Housing

Charger

Item

144

Incorrect colour

Low impact resistance

Scratches

128

Incorrect Size

Internal; connector

LED does not work

Broken, damaged or warped

External scratches

Button becomes â&#x20AC;&#x2DC;spongeyâ&#x20AC;&#x2122;

RPN

Misaligned/ inaccurate responses

Potential Failure Mode

Consider adapting plastic properties to make it more resistance to damage. Review its storage/ transportation. Consider better material selection, or sourcing from more reliable and reputable manufacturer. More rigorous checked of machine tooling for signs of age or damage. Closer supervision on the production line. Stress testing performed on high percentage of products. Consider adapting plastic properties to make it more resistance to damage. Review its storage/ transportation.

Consider better material selection, or sourcing from more reliable and reputable manufacturer. More rigorous checked of machine tooling for signs of age or damage. Closer supervision on the production line.

Source the charger from a reliable and reputable manufacture. Include instructions on its correct use. Test the products that have been bought in more rigorously.

Source good quality components from reputable manufacturers. Review manufacturing process to ensure bulb is not being damaged during assembly. Make bulb easily replaceable without whole device going to waste. Consider better material selection, or sourcing from more reliable and reputable manufacturer. More rigorous checked of machine tooling for signs of age or damage. Closer supervision on the production line.

Good quality components and manufacturing methods should prevent the button from deteriorating with use. Make it so the button can be removed and replaced after extended use- make it feel like new. Increase the supervision and quality inspection during manufacture.

Ensure precision handling through assembly. Check manufacture methods and tools for signs of damage.

Ensure the hardware and software are correctly linked up. Source the touch screen from a reliable and reputable manufacture. Conduct more rigorous checks on the production line.

Action Taken

RPN

62%

71%

50%

62%

60%

73%

50%

75%

33%

56%

Charger

Digital Interface (software)

Internal Hardware

LED indicators

Output Failure

LEDs do not give correct output

LED does not work

111

180

Slow operation/ freezes

Physical damage

180

189

Crashes/ self shut down

Overheating

100

126

50%

32%

51%

37%

45%

33%

The FMEA Actions to reduce risk was successful as all 23 of the potential failure modesâ&#x20AC;&#x2122; risk priority numbers where reduced by at least 30%, with some reductions as high as 75%. The highest risk priority numbers where for the battery, where the RPNs were able to be reduced by 33% and 57% for the two failure modes. A broken touch screen was the second highest scoring RPN which was brought down by 67%. With the potential for even more refinement this product could be made to be incredibly safe and reliable.

Conclusion to FMEA Risk Reduction

Closer quality inspection during manufacture. More testing and development of relationship between the hardware and software.

Careful manufacturing. Stronger and more resistance materials. More supervision.

Selection of appropriate and reliable software. More supervision.

Fit thermal cut-out (TCO) Casing should be made from plastic that dissipates the heat and prevents potential injury to the user.

3.0 PRODUCT SALES MARKETING PLAN A marketing plan has the ability to facilitate the commercial success of this newly developed product as it enters the market place. The marketing plan is compromised of a strategy of focus, a marketing mix, and costs.

1) Strategy of Focus

This

The simplistic focus of any marketing plan strategy would be to make money, however looking it at from a more sophisticated stance the strategy can be devised using one of three methods; a competitor analysis, market analysis or by assessing the product life cycle.

involves

asking

two

key

questions:

‘Is the product new or existing?’ ‘Does it fit in with a new or existing market?’ Analysing the market shows that health technology is a well established sector, so introducing this product will require elements of penetration and diversification. This method of analysis is not the most appropriate because the product has a fairly defined audience.

Competitor Analysis A strategy based on a competitor analysis is purely analytical. This is best if you are trying to enter an already saturated market, such in this case with healthcare technology. It allows you to see what you have in comparison to your competitors, and review all of the potential outcomes of your actions.

Product Life Cycle The applied strategy can be tailored to match what is trying to be achieved in the product’s life cycle. In this instance the product is in stage 1 of the model, where creation and expansion are occurring, soon to be followed by a penetration of the market. As a result of this the excitement of the new product could attract attention and the product sales will be able to nurture themselves. The strategy of focus should be centred around providing people with information about the product. It is only later in the cycle, where there is more competition, that the market strategy should be more focused around persuading people.

The Intel Health Monitor is a competitor of this new product, and an initial analysis reveals its vulnerabilities. Recent cuts in prices, the rapid succession of new or ‘advanced versions’ of the original model and an ‘advertising blitz’ (relying on the reputation of the brand and the success of their other products to sell this one) all insinuates that they have to desperately defend their hold on the market. This would suggest the best strategy for the marketing plan would be to go into the market as a ‘developed product,’ offering existing consumers the opportunity to buy something new and better suited to their needs.

Conclusion: A combination of the competitor analysis and product life cycle methods would create most appropriate strategy of focus. Entering the market with the selling point of being a new and innovative product (an alternative to what is already available and what has already been done before) should persuade people to turn away from traditional options of healthcare technology.

Market Analysis Analysing the existing market is the second way of devising a strategy of focus.

2) Marketing Mix The market mix occurs once the strategy of focus has been devised, and provides an evaluation on how ready the product is to be launched. It can be looked at from the ‘4 P’s’ method, Product, Price, and Place.

Product Product validation and verification can ensure that the product is right and is meeting the consumer requirements. The product has been validated using a QFD (see product verification). The QFD

concluded that the product was successful at meeting the original criteria, and it was able to do so better than two of its competitors. It is imperative that this verification stage occurs before any marketing campaign is launched because if the product is not right, it will not sell and money will be lost. Price

Place

Price has been investigated further under product viability, where cost plus pricing has been used to work out the RRP (factoring in a suitable profit margin). This is susceptible to change depending on the supply and demand of the product.

The product is fitting into the consumer market place, with a very specific target market of the over 65s with rheumatoid arthritis (or more widely with reduced mobility). It might be best to distribute the product through outlets specialising in products, such as assistive devices, for the elderly. There could be potential to market it as an assistive health care tool in mainstream retailers.

Promotion The target market carried through from the research stages of the product was over 65s in the UK with rheumatoid arthritis, drastically restricts the number of products that can be sold. They are the core market. In addition to this â&#x20AC;&#x2DC;coreâ&#x20AC;&#x2122; market, the product has the potential to appeal to a much larger market (core +) i.e. any person concerned by their mobility or activity levels or adults with concerns for their elderly relatives ( who would form the outer circle of the market). This could be widen from just the UK to across Europe and even internationally.

CUSTOMER SEGMENTATION BEHAVIOURAL

PSCHOGRAPHIC

Benefits sought: an adult concerned by an elderly relative and wishing to provide them with support, or an older person who wishes to take steps to self improvement.

Lifestyle: Fairly inactive, giving them reason to want to improve. Personality: If an older person they are potentially quite determined and self-aware. Taking direct measures to try and control their condition.

Purchase occasion: It is an expensive product and would be a one off purchase. It is likely they will have deliberated the purchase and researched into the decision. (Applicable to adult purchasing for the relative or the older person buying it themselves)

PROFILE Socio-economic: Upper middle class or middle classes would be targeted.

Perceptions and beliefs: Keen on wellbeing, self-help and medical technology. It is likely they want to better themselves.

Geographic: In the UK it is likely to be the South/ South East of the country.

Alternatively, it could be more advantageous to promote to the product to medical professionals and the outlet stores selling this product. By gaining their approval and recommendation, they are more likely to recommend their patients and consumers, who in turn are more likely to make the purchase because the promotion is coming from a trusted source/ someone they have a close relationship to. This means their interest is more likely to peak, they are more engaged, their risk evaluation is swayed and they are more likely to follow through with the action of purchasing.

Outside Influences on Sales

Sales Forecasting, Market Stats

The time of year is a determining factor on the sale of the product. Due to thow expensive it is, the product might be bought as a gift for an elderly relative, as such there would be a surge in prices around Christmas time, with the Consumer Electronics Assosiation showing increases of tablet sales of 112% from Christmas 2014 to Christmas 2015 (CEA, 2015).

Time series forecasting looks at past data to determine future trends. The market of touch screen tablets is rapidly changing due to advancing technology and emerging competitors in the market. The past cannot accommodate for how quickly the industry is developing. This product in particular is not similar to the majority of products being manufactured in the vast industry that is health technology. This means analysing the health technology industry as a whole will not necessarily provide an accurate sales forecast.

The large scale economy, such as oil, gas and coal prices can also impact sales. It changes the price of the plastic for the product housing which is capable of causing a knock on effect on the RRP of the product. In addition, ‘Korea’s silicone valley’ makes electronic cheap much cheaper and more accessible. These changes in material sourcing can fluctuate the RRP and make the product more desirable on the market.

Johnson Health Tech Co are a sample of the market, and saw a revenue rise 13.28% between 2012-2013 (Kao, 2012), translating to revenue increase from $512 million to $580 million. Furthermore, Phillips Healthtech unit has 2013 sales of $15 billion, a sales growth of 4-6%, with the CEO stating the decision would ‘help the company become a global leader in tech aimed at improving health.’ (Fast FT, 2014)

The current market shows a clear divide between the rich and poor resulting in increases in sales in luxury products (Kollewe for the Guardian, 2015) This product is expensive and not a necessity, so would be viewed as a luxury item so could appeal to those who currently have large disposable incomes.

According to research conducted by Juniper (Health Tech Insider, 2016) the forecast is rapid growth in the health monitoring device market. It has been predicted that worldwide shipments will grow from 26 million units to more than 70 million in 2020. Growth will be slower in developing markets, but countries such as the US and UK will see rapid growth as ‘consumer embrace the convenience and lower cost of remote health monitoring.’

Sales Forecasting using the ‘Grey Consumer’ Much research has been done into the Grey consumer, a large dynamic of society containing those who are willing to spend more in pursuit of hobbies, leisure and interest. By looking at this segments recent spending habits could help predict how well the product will perform in the market place. The following data has been complied from a study titled ‘the Grey Consumer’ (2013) published on keynote.

43.3% of adults over the age of 65 do no form of physical activity. This product has a potential market for those who wish to have a little encouragement and want an option to exercise within their own home. ]

Tablets have the lowest rates of ownership in the over 65s, and only 2.8% use them. This is not promising as the demographic may be put off by the touch screen interface and use of applications. The consumer may prefer the traditional PC setup.

The average annual household expenditure of in the 65-74 age bracket is £478, £100 less than the 50- 64 category. Suggested consumer is happy to spend money on themselves and cares about their personal health and appearance - fitting with the product

Figure 4.1.1: Table showing Direct Costs pre unit

The table below shows the bill of materials, and all of direct costs associated with their sourcing, manufacture and assembly. The nature of the product does mean many of the parts are bought

4.1 Direct Costs

in an not manufactured in house, but the source prices of both the bought in parts and the materials are available in the appendix. To keep the estimation as accurate as possible waste and packaging have been included, on top of the

Total Direct Costs: ÂŁ43

It is worth noting that the machine rate, included in manufacturing labour costs, is actually an indirect cost, but has been included in this table for continuity.

components needed to make the actual product.

4.0 PRODUCT VIABILITY

Figure 4.2.3.: Table showing Indirect Costs pre unit

Absorption costing is a method of calculating indirect costs as a percentage of direct costs. In this instance the Fixed Overhead Absorption Rate (FOAR) has been set at 100% to calculate the total direct cost and 50% to investigate the partial costs (based on materials and labour cost). This method is advantageous because it is simple and

4.2.1 Absorption Costing

takes into account all possible costs to create a fuller picture (Wilkinson, 2013) However, it based on large assumptions and it is highly likely that the costs will be under of over recovered (Kaplan Financial, 2015). One such assumption is the variable overhead, which includes electricity usage, storage space, transport and moulds and dies. This has been crudely estimated at ÂŁ2 per unit. at 100% FOAR this makes the total unit price ÂŁ86

4.2 INDIRECT COSTS

Figure 4.2.2: Breakdown of total cost for 50% and 100% per unit

£2.49

£44.45

£3.64

£2.49

£41

Manufacture

Assembly

£100

£41

£59

£20.5

£38.50

Sales

Direct Costs

Contribution (Sales Price direct)

Indirect Costs (50% of Direct)

Profit = contribution indirect costs

£33.29

£22.26

£55.55

£44.45

£100

Indirect Costs

£3.09

£38.87

£34.87

Materials

10,000

5,000

Volume (units)

Direct Costs

4.3.1 Marginal Costing Statement

£56.81

£14.40

£71.21

£28.79

£100

£28.79

£1.10

£4.37

£23.32

20,000

Marginal costing is flexible, and takes into account how costs change with volume. Direct costs are ‘constant,’ but larger volumes can impact direct cost per unit. This has been investigated below. The direct costs worked out in 4.1 have been assumed as the costs for a production of 5,000 units.

Marginal costing is the second method of indirect costing being used. It is flexible, and capable of adjusting dependent on production volume. The advantage of marginal costing is that is provides material to make decisions from (Kaplan Financial, 2015) with the creation of break-even charts. The disadvantages of this method, similarly to absorption are that it can lead to cost under recovery, in addition fixed cost overheads are ignored rather than being spread across the units (Kaplan Financial, 2015)

Figure 4.3.2: Marginal Costing Statement when sales price is set to standard of £100

Assembly: Assembly taken to mean labour. Difference only really noticed going up to

Manufacture: Manufacture taken to mean machinery. The cost between 5 and 10 thousand goes down slightly (by 15%) because the same machine and quality of die are being used for both, but the cost of both is spread across 5,000 more units. 20,000 units goes up (by 20%) because the quality and maintenance of the dies etc. will cost significantly more.

Figure 4.3.3 shows how direct costs go up with mid size production before dropping. This is inversely reflected in the profit and contribution per unit, when at 10,000 they decrease to account for the greater amount of direct costs having to be covered. Indirect cost loosely reflects this, but as they are just 50% of the direct costs the gradient change is not as obvious.

Overall direct costs increase by 7.8% between 5-10 thousands units, and decrease by 35.2% between 10-20 thousands. Change in direct costs a drop of 29.8% between 5 and 20 thousands units.

Materials: Material cost remains the same between 5,000 and 10,000 units because the order quantities are not excessively large, going up to 20,000 units Figure 4.3.3: Changes in costing (£) depending on production volume drastically reduces the price (in thousands) when sales price is set to standard of £100 (40%) as bulk discounts can be applied (The drop in price production of 20,000, where the cost of could have been more had it not been for the additional employees is spread across the extra increase in wasted material being produced) units being produced (unit cost different by 40%).

Direct Costs and Production

4.3 Marginal Costing

£61.5

£41

£20.5

£0

Sales

Direct Costs

Contribution

Indirect Costs

Profit

£0

£22.23

£44.45

£66.68

10,000

£0

£14.37

£28.79

£43.16

20,000

Figure 4.4.1: Unit Price required to Break Even at volume productions of 5,000, 10,000 and 20,000 units

5,000

Volume

Indirect Costs

To break even the sale price must be 1.5 times the direct costs

50% of direct costs (b) = Sales Price (a) Direct Costs (b) 0.5*b = a-b b= 2a-2b 3b =2a 1.5*b = a

Working out minimum sales price to break even. For this to occur the contribution and the indirect costs must equal the same.

Break Even Sales Price

The break-even analysis will investigate the unit sale price required to break even at 3 volumes of production, in addition to the number of units required to be sold at a standard price to break even.

4.4 Break-even Analysis

PROFIT

Break Even Point

This is potentially far higher that the company wouldbe expecting or wanting to produce in total, let alone to just recoup the money they had spent. Increasing the sales price from £100 to £150 would mean less than 5,000 would need to be manufactured. This would be a more realistic target for the company, but it would be questioned if the consumer would be willing to pay 50% more. ,

the minimum number of units to be sold at the standard price of £100 (not including retail and wholesale markup, VAT etc.) in order to break even and make a profit sit between 10,000 and 15,000 units.

Figure 4.4.3: Visual representation of break even point at production volume of 5,000

Figure 4.4.2: Visual representation of break even point at production volume of 5,000

Break Even Point

Figure 4.4.3 (right) shows that

Break Even Units

The table (Figure 4.4.1) shows that when production goes up from 5,000 to 20,000 the sales price can afford to be reduced by 30% from £61.50 to £43.16 in order to break even.

Figure 4.4.2 shows where the BEP (break-even point) occurs, which for a volume of 5000 units, is at £61.50. Anything below this and the product will make a loss. Represented on figure 2.3.4 by anything below the blue total costs line.

Pricing (RRP)

+ VAT (20%)

+ Retail Mark-up (100%)

+ Wholesalers Mark-up (33%)

+ Manufacturers Profit (10%)

Works Cost

£289.99

£287.28

£239.40

£119.70

£90

£86

Consumers have the best response to pricing ending in .99 opposed to round numbers, with the potential to boost sales significantly (Lindstorm, 2012) . In this instance not only have the pennies been rounded to the nearest .99, but the pound has also rounded to the nearest 9. Rounding down to a 9 would have meant a loss of £7.29 per unit - significant across 10,00 units. Rounding up has the same positive psychological effect and no money is lost to the manufacturer. In addition, when the consumer is spending nearly £300 on a product the additional £2.71 is likely to go unnoticed.

Cost plus pricing has been used to find the RRP. An additional 10% needs to be added on to the works cost to account for the manufacturers profit. 33% of the price is then added on to account for a wholesalers mark-up (before it is sold to the distributors). The retail distributors will add a further 100% to the price to account for their own profits. 20% has been

added for the compulsory value added tax.

Commercial Pricing

Additional Pricing

4.5 PRICING

Alternatively, instead of having the parts slot together the number of components could be reduced by having the

Component Reduction

In order to lower the cost of the product even further it could be redesigned to include assembly features, which would make the whole assembly process faster. For instance, the three parts of the body could be manufactured with male and female parts which allow them to slot together. This removes the need for them to be welded . Not only is welding a much more expensive method because it requires a skilled worker (at £20 an hour) it is also more time consuming.

Additional Changes to Assembly

Instead of welding the product’s components together they could be attached using liquid cement. The skill level required to apply liquid cement is considerably lower than that required to weld-bringing down the pay per hour down by almost 7 times. This brought down the cost of assembly down for these parts down from £1.61 to just 23p. Once all the mark ups etc. have been applied this cost saving is inflated to £3.98.

Changes to Assembly: £1.38 improvement

The ABS could be replaced with PBT/ABS as it is 56% cheaper per kilogram , with few noticeably changes between the two materials. As the product costings have been carried out to one decimal place the cost per unit has been lost as it has all been rounded to 1p. I do not believe such as small saving could justify risking the loss in quality.

Material Changes: unnoticeable change

PBT / ABS

PBT/ ABS

£0.32 20

£0.32 30

£0.32 60

£0.32 20

£0.01 -

£0.01 Liquid Cement

The part cost would be less than £0.2 (separately they total 3p) and removes any need for assembly. Material and assembly costs would be brought down to just 2p from £1.64. Excluding the savings made elsewhere e.g. manufacture, where just one component being manufactured rather than 3, reducing production time and overall unit costs.

Assembly Process

£0.01 Liquid Cement

three body parts (blue frame, white body and blue trim) manufactured as one. The disadvantage of this would be the two tone colour might not be possible, but this change to the aesthetic could be justified for the significant cost reduction it would provide.

Waste

White Body

Blue Trim

Blue Frame

£0.32 4

Material Cost / Weight Part kg (g) Cost

Control PBT/ Button ABS

Item

4.6 REVISED COSTINGS

Assembly Time (s)

Assembly Cost

Low £0.07 £6.50

Low £0.08 £6.50

Low £0.07 £6.50

Low £0.01 £6.50

Skill/ Pay

5.0 PROFESSIONALISM 5.1 INTRODUCTION TO INTELLECTUAL PROPERTY This section will analyse and apply techniques available for the commercial protection of intellectual properly against commercial theft. Intellectual Property protection is important to nurture innovation, and it allows the originator (or owner) to reap the benefits of the invention.

5.2 Registered Design Right The government’s website (IPO, 2016c) states that a design right only applies to the physical shape, appearance and configuration of objects. Registered design rights are similar to community design but provide better protection against people copying or stealing the design. They also make legal action against said infringement or copying more straightforward should it occur. The application process costs £60 and can last up to 25 years if the application is renewed every 5.

If this was to come back positive, then below is the series of illustrations that would be made as part of the application. All of the information adheres with the Design Form DF2A guidance notes on the design rights page of the government website (IPO, 2016c). Once the application is filed it must meet the requirements of the Registered Designs Act 1949 and the Registered Design Rules 2006.

‘The application is for one design. The design is a tablet device.’

For this product, a design right application could be made for the curved surface and upper blue surface. These are shapes which are arguably unique to the product. An attempt to look through the UK- registered designs was unsuccessful, due to the sheer amount of existing design rights and the varying criteria. If further investigation found that a design right would be beneficial to protect the shape of the product it would be worthwhile paying the Intellectual Property Office £25 to carry out the search themselves.

The registration of the application would be deferred. This would provide more time to market the product whilst it is a protected or alternatively file for a patent before the design is publicly disclosed on the government website (depending on ready the product it is to be launched) To ensure credibility these design should also be posted back to the designer and left unopened as proof that they were designed on a certain date.

Figure 1: Example drawing to be submitted as part of Registered Design Rights Application

Figure 2: Example Section of Registered Design Rights Application Form

5.3 Copyright Copyright, as outlined by the IPO (2016d), is ‘protection granted automatically without the need for an application for original literary, dramatic, musical and artistic work, sound/ music recordings, film/TV recordings and the layout of published editions of written, dramatic and

musical works.’ Put simply, it protects the outcome or expression of the idea (Morris, 2016) - so it not widely used for things produced commercially. There aren’t any elements within the product’s design which are suited to being copyrighted.

5.4 Trademarking According to Oxford Dictionary (2010) a trademark is, ‘a symbol, word or words legally registered or established by use as representing a company or product.’ In the instance of this product a trademark could be implemented on the product logo. Although it does not stop companies making direct copies of the product, it does stop them branding it with the trademark. This reassures the consumer that the goods they are buying comes from the company associated with the trademark, and not a ‘fake’ and potentially unsafe version (particularly important in this instance of an electrical good). As the device is going to be manufactured commercially it would be encouraged that the trademark is registered (Trademark Eagle, 2014). This allows the brand to safely build its value and reputation whilst being appropriately protected Trademark applications can be made online through a government run website for £200, and lasting for 10 years. This product is being primarily designed for the UK market, but should it be required there are ways of gaining international protection through various systems such as an EU community trade mark and conducting a WISS (World Wide Identical Screening

Search allows you to check the international status of similar trademarks (IPO, 2016a). Below is how the logo would appear if it was a registered trademark (note the R symbol rather than TM). The trademark covers a combination of the name of the product, the logo and the colours used. It follows all of the guidelines outlined on the government site; it is not offensive, it would not be deemed misleading, it is two dimensional, and although objective, I would say that it does not look similar to any state symbols.

Figure 3 (top) and Figure 4 (bottom): Shorthand and Long hand versions of logo with registered trademark

Figure 5: Print screen of trademark search

Figure 6: Print screen of searching for ‘routine’

Figure 5 shows a trademark search for ‘Routine Encouragement,’ carried out on the Intellectual Property website. I employed very loose search criteria, searching for ‘any of these’ word across all classifications of trademarks- and the results still came back with nothing. This is positive as it means there are no similar names currently existing in the UK, it is completely unique, and theoretically there should be no

companies

who

could

claim

infringement.

Figure 6 shows the search for just the word ‘routine’ (carried out for ‘encouragement’ too) To make sure I was safe, I just searched these words and looked through the pages of trademarks to see if there were any similar names the initial search has picked up on and to look at their logos to ensure mine was different. No problems arose from this.

5.5 Domain Name Although the company name has shown no problems when being checked for trademarking, sometimes this can differ with the domain names- especially with the rising problem of ‘cybersquatting.’ Figure 7, below, shows the results of an online search of the domain name, showing no other companies or products show a similar name. The second image, figure 8, is a domain name checker, which showed that all variations of the domain (.net, .com, .info etc.) were all available for use.

Figure 7: Search on domain website Go Daddy.

Figure 8: google search for terms

5.6 Community Design Community Design, currently still described as Design Rights on the government body website and only referred to as unregistered community design on the EU IPO (EUIPO 2016), allows the automatic protection of a design within the UK (IPO), 2016b) It applies to three-dimensional articles, which my design is (unlike the registered design right, which covers both 2D and 3D). To enforce it you must be able to prove that you are the owner of the design and that deliberate copying has taken place (this is not required for the registered design right.) It would be possible to prove my design right by sending copies of the design drawings to myself via dated post,

and leaving them unopened (NI Business Info, 2016). The use of ‘deliberate’ does not give you full protection if the other designer can prove that they came up with their design independent of yours. Protection lasts for 10 years after it was first sold or 15 years after it was createdwhichever is earliest, but in the final 5 years you must give a license of right to anyone who asks (IPO, 2016b). This would not be ideal protection for this product as its longevity as a start-up company will hopefully last longer than this- but it is worth complying too because unregistered design rights give the design up to three years of protection within the EU (EU IPO,2016b).

5.7 Patents The CDPA (Copyright, Designs and Patents Act 1988) describes a patent as the ‘protection of the composition, construction and manufacture of a substance or apparatus of a product or process.’ Broken down simply it covers how things work, what they do, how they do it and what they are made of and how they are made. Patents are registered at the patent office by the originator, unless you have been contracted to do the design work, in which case it belongs to the person paying for it. It provides protection

for up to 20 years with renewal of up to 4. A patent can be applied to by either of the following bodies: the Intellectual Property Office (IPO), European Patent Office (EPO) or the World Intellectual Property Office (WIPO). Figure 8 is an attempt to write a patent description. I have attempted to achieve the crucial balance between too descriptive, making competitors to work around it, and describing it too loosely

making it likely to be declined (as it shows attempt to gain a monopoly on the market.) Although expensive, the best way to proceed would be to pay a patency agency to word it. Figure 9 is an online search of the patent office to see if the product has been patented/ done before. This is a free process, but incredibly time consuming; especially when my knowledge of the system is limited an oversight could occur very easily. As with the patent wording, it would be preferable to pay someone to conduct this search on behalf of the company. Although this can become expensive it is far time efficient than having the patent continuously rejected, and more cost effective than being taken to court for infringement further down the line.

Figure 9: The worldwide database search found 6 results for a â&#x20AC;&#x2DC;curved touch-screenâ&#x20AC;&#x2122;

For the patent to be passed it must be one of the following; Valuable: potential uses/ applications should be identified. These can be incredibly weak to qualify to get a patent. New: the patent object must never have been disclosed in public. It could have be tested, as long as confidentiality agreements and non-disclosure agreements have been put in place. Inventive: It must not be obvious, and be beyond the state of the art and what is currently known.

(IPO, 2016)

With the Routine Encouragement device most of the design features and technologies involved would be hard to claim as new or inventive a both the physical and digital interfaces have been kept as simple and similar to existing products where possible in order to make it easier to use for first time users to intuitively interact with the product. The most promising part of the product for a patent application would be the curved screen. After a search of the IPO database there were some similar patents describing the curved screen, which would have the potential to make it hard to file an application for the patent.

Figure 10: Drawings and descriptions from the two most relevant patent applications.

5.8 Confidentiality and Non Disclosure Agreements as ‘new,’ meaning the patent object must never have been disclosed in public (Intellectual Property Office, 2016). The only way to share information about the product is if confidentiality and nondisclosure agreements have been put in place (IP Watchdog, 2016). The two terms are incredibly similar and can be used interchangeably, but non-disclosure agreements are more commonly used in start-up situations (Emilio, 2011). Figure 12 shows an example section of a oneway non-disclosure agreement between Routine Encouragement (discloser) and a manufacturer (recipient) for the purpose of creating a prototype of the Routine Encouragement Device.

Fig 12: Example of One-way Non-Disclosure Agreement (IPO, 2016) As outlined in reference to ‘patents,’ (see above) in order for a patent to be passed it must be classifiable

5.9 ISSUES AND MANAGEMENT OF INTELLECTUAL PROPERTY Managing IPR can be complex for start-up companies. For instance knowing when to file the patent application can be incredibly strategic. By waiting until the full design has been finished there is a risk that someone will have got in and filed before you, however file it too early and the patent may not truly represent what you want it to or it won’t get granted. In terms of proceeding with the IPR for this product I think the first step should be to trademark the company name/ logo and buy the domain name to prevent anyone else from taking it. A non-disclosure agreement should then be a made with a technology company to confirm the design and the technical specification of the curved screen. Once this has been completed it can be taken to a patent office, where a patent can be written up with this new and improved understanding of how the product actually works. After the applications approval the logo and domain name will have been waiting safely for use. As part of the management of IPR it is also important to pay the necessary renewal fees (The Start-up Donut, 2016). Without this IPR may not be renewed, leaving the product and brand vulnerable to infringement. Although still protected by non-registered IP it will not be the same.

5.10 Clarification of Ownership

and gives its owner or business advantage... over competitors who do not have the information.’ There is no process to register a trade secret, as its publication to any third party could destroy is confidential nature- this is why it is not technically an IPR (US Legal, 2016). In this instance, a trade secret could be considered to protect the technology behind the device’s curved screen. The pitfalls of this being how easy it would be for the competitors to buy and take apart the product to work out how it was made, so for this device the technology would be safer being patented. In addition, it is likely that this product will be manufactured overseas for cost reduction purposes. This would spoil its ability to be kept secret.

Before you do any design work you must decide who owns the intellectual property rights. In this example (unless the design is sold) it would be the originator, as the work was not contracted or completed under employment. This product will therefore be associated with the company it shares its name with, ‘routine encouragement.’

5.11 Non-Statutory Knowledge Protection Sometimes it may be preferable to use other forms of protection, other than IPRs. Non-statutory can include trade secrets, described by WIPO (2016) as ‘a formula, process or information that is secret,

Expertise, similar to a trade secret, is a way of existing in the market place without IPR (Morris, 2016). It means that the company are innovating incredibly quickly at the top level of their industry so that their competitors are unable to keep up. This is the same for creating a strong brand image, so much so that users don’t want to buy anyone else’s products but yours. Neither of these methods are particularly suited to a small start-up company, as is the case with this product, so it would be important to use actual IPR to prevent infringement.

a small start-up company, and legal action is an expensive and slow process which can completely drain the resources so that they cannot compete with the large companies. To avoid this it would be advisable to put money towards IP insurance. Policies will cover the legal costs of enforcing your IPR and defending claims that you have infringed the rights of others (Bystestart, 2015). Start-up companies can also get help from trade organisations such as ACID, which allows registered members to have access to a legal hotline and they hold a watchdog presence at exhibitions.

5.12 Enforcing

5.13 Selling Intellectual Property Rights

Although the government grants the IPRs, enforcing them is a civil matter. To ensure that my product is as safe as possible from infringement it is important that it has a clear and traceable paper trail. This should include a log of evidence recording the development of intellectual property (The Start-up Donut, 2016).

Both the registered and unregistered types of IP can be sold. The types of technology currently experiencing demand from buyers in global markets include medical devices (especially related to ‘smart’ healthcare, innovations contributing to healthier lifestyles and LED displays and other enhanced technologies for mobile devices (Ingot, 2016). This would make my patented technology potentially very desirable. However, the company itself has not been marketed or grown so would be worth very little, if anything at all. If a sale was going to occur it should happen now, to sell just the patent, or further down the line when the company is more established and all of the start-up and development costs have been recouped. Valuing and selling IP could be useful to gain funding for other projects (IPO, 2016).

It is important as a start-up company to enforce your rights by identifying any breaches and pursuing the offenders, but it is equally as important to assess the situation carefully before initiating any uncertain and expensive legal action (the Start-Up Donut, 2016). If a problem is encountered a specialist IP solicitor will issue a Letter Before Action (LBA) setting out the complaint against the copyist and gives them the opportunity to achieve an early settlement before any court proceedings take place. This is

5.14The Ethics of Intellectual Property There are broader issues associated with intellectual property which revolve around the ethics of idea generation and ownership. As explained in the article ‘Against Owning Information,’ (Neils, 2013) all the information that has inspired and contributed to the creation and development of this product has been available ‘through the free choice of individuals.’ By protecting my product with rigours IP I am preventing others innovating in the market and making improvements to similar products that would be of value to the consumer. He states that it is up to the entrepreneur to improve their product without having to resort to legal threats. This is similar to expertise (see non-statutory knowledge protection, above) for a small start-up company not using IPR is not a viable solution; whilst the majority of companies are still operating under stringent IPRs, this product needs to do the same to survive in the commercial marketplace. Another issue associated with the ethics of IPR are that monopolies over a product category or industry are not allowed (Levine, D.K, 2013). As this is a touchscreen tablet device the market for it is already saturated, with key players such as the Apple iPad, already evident. It is therefore unlikely that my niche product for rheumatoid arthritis sufferers would be capable of monopolising the market. Furthermore, due to the costly nature of court proceedings it is argued that IPR only benefits larger companies. Despite this being an ethical issue I do not think it would persuade me not to enforce IPR for the product, IPR is already weighted in favour of the larger companies and as a small start-up company without it not, the company’s situation would be a lot worse.

REFERENCES

Bytestart. (2015). Guide to Intellectual Property insurance for start-ups and small

businesses. [Online] Available: http://www.bytestart.co.uk/intellectual-property-insuranceguide-start-ups.html [Last accessed 6th April 2016]

Emilio, V. (2011) Confidentiality Agreement vs. Non-Disclosure Agreement. [Online].

Available at: http://legal123.com.au/confidentiality-agreement-vs-non-disclosure/. [Last accessed 6th April 2016].

European Union Intellectual Property Office. (2016). Designs in the European Union.

[Online] Available: https://euipo.europa.eu/ohimportal/en/designs-in-the-european-

union . [Last accessed 6th April 2016]

Ingot. (2015). Why sort of IP sells? [Online] Available at: https://www.inngot.com/sell-yourip.html [Last Accessed 6th April 2016]

Intellectual Property Office. (2016). Non-Disclosure Agreements. [Online] Available: https://www.gov.uk/government/publications/non-disclosure-agreements . [Last

accessed 6th April 2016]

Intellectual Property Office. (2016a). Intellectual Property: Trademarks. [Online] Available: https://www.gov.uk/topic/intellectual-property/trade-marks. [Last accessed 6th April 2016]

Intellectual Property Office. (2016b). Design Right. [Online] Available: https://www.gov.uk/design-right. [Last accessed 6th April 2016]

Intellectual Property Office. (2016c). Designs Form DF2A- Guidance Notes. [PDF] Available at:

https://www.gov.uk/government/uploads/system/uploads/attachment_data/file/507951/

DF2A_fillable.pdf. [Last accessed 6th April 2016]

Intellectual Property Office. (2016d). Copyright. [Online] Available: https://www.gov.uk/copyright. [Last accessed 6th April 2016]

Intellectual Property Office. (2016e). Valuing your Intellectual Property. [Online] Available:

https://www.gov.uk/guidance/valuing-your-intellectual-property. [Last accessed 6th April

2016]

IP WatchDog. (2016). Simple Confidentiality Agreement. [Online] Available:

http://www.ipwatchdog.com/tradesecret/simple-confidentiality-agreement/. [Last

accessed 6th April 2016]

Kaplan Financial. (2015). Marginal and Absorption Costing. [Online] Available:

http://kfknowledgebank.kaplan.co.uk/KFKB/Wiki%20Pages/Marginal%20and%20absorpti

on%20costing.aspx [Last accessed 7th April 2016]

Levine, D.K., (2013). Against Monopoly: Defending the Right to Innovate. [Online] Available at:

http://www.againstmonopoly.org/index.php?limit=&chunk=0&topic=Against%20Monop

oly [Last accessed 6th April 2016]

Lindstorm, M. (2012) The Psychology Behind Pricing [Online] Available:

http://www.fastcompany.com/1826172/psychology-behind-sweet-spots-pricing [Last

Accessed 5th April 2016]

Morris, R. (2016) Intellectual Property Lab Bite. [Video]. Available:

https://folio.brighton.ac.uk/view/view.php?id=20672 [Last Accessed 6th April 2016] Neils,L. (2013). Against owning information, i.e. ‘intellectual property.’ [Online] Available:

https://medium.com/@vforvoluntary/against-owning-information-i-e-intellectual-property8ba3e8a2b576#.ruwu5js47 [Accessed 6th April 2016]

NI Business Info. (2016). Design Right and Registration. [Online] Available:

https://www.nibusinessinfo.co.uk/content/key-differences-between-design-right-anddesign-registration [Last accessed 6th April 2016]

Oxford University Press. (2010). Definition of Trademark. [Online] Available:

http://www.oxfordreference.com/view/10.1093/acref/9780199571123.001.0001/acref9780199571123. [Last accessed 6th April 2016]

The Start-up Donut. (2016). Business Law: Intellectual Property. [Online] Available:

http://www.startupdonut.co.uk/startup/business-law/intellectual-property/how-to-protect-

your-intellectual-property [Last Accessed 6th April 2016]

Trademark Eagle (Anon). (2014). Why register for a trademark? [Online] Available:

http://www.trademarkeagle.co.uk/news/why-register-a-trademark. [Last accessed 6th April 2016]

US Legal. (2016). Trade Secret FAQ. [Online] Available:

http://intellectualproperty.uslegal.com/frequently-asked-questions-2/trade-secret/. [Last

accessed 6th April 2016]

Wilkinson, J. (2013) Absorption vs. Variable Costing: Advantages and Disadvantages. [Online] Available at: http://strategiccfo.com/wikicfo/absorption-vs-variable-costingadvantages-and-disadvantages/ [Last Accessed 7th April 2016] WIPO. (N/A). What is a Trade Secret? [Online] Available:

http://www.wipo.int/sme/en/ip_business/trade_secrets/trade_secrets.htm. [Last accessed 6th April 2016]

APPENDIX

SOURCING THE COSTS Sourcing the Bought in Parts 1. Lithium Ion Battery Device Type

Battery Cost

iPhone 5s

$4.99 (~£3.51)

iPhone 6

$3.50 (~£2.46)

iPhone 6+

$6.00 (~£4.22)

Source Business Insider Article showing what manufacturers paid for battery in bulk (similar costs also reported on several other websites) http://www.businessinsider.com/iphone-6-iphone-6plus-cost-breakdown-2014-9?IR=T Ebay prices for the cost of individual battery when sold to

TomTom/ Samsung Phones

consumer. Min, $9.50 (~£6.68)

http://www.ebay.com/sch/sis.html?_nkw=MAXELL%20

Max, $16.00 (~£11.26) ICP553443%20900mAh%20Li%20ion%20Rechargeable%20 Battery%20For%20TOMTOM%20P2%206027A0093401&_ itemId=261261353153

Lithium Ion batteries are used in a high proportion of mass produced, portable, electronic products. The price paid by the manufacture is often unreleased, and therefore I had to use the only information readily available for the public. The prices given for the Li-ion batteries used in Apple products must take into consideration that they were purchased in vast quantities at a time, which would have significantly reduced their cost. However, the batteries required to power these phones would be slightly more powerful and hold a much larger capacity than that needed by my product. Similarly, the batteries used for TomTom or the Samsung phones would also be more expensive than the battery required for the products- but its price reflects buying it as an individual unit. As the products will be manufactured in some form of quantity I have ruled out the prices for TomTom and Samsung and taken the mid-range price of the iPhone 5s battery as the best estimate for the cost of purchasing the battery for my product.

Cost of Li-ion Battery: £3.51 2. Speaker Driver Speaker Driver

Qty: 1-24: £3.54 Qty: 50+: £3.01

http://uk.rs-online.com/web/p/speaker-drivers/8158722/

This price is as close to estimation as I could find. It is for a 23mm speaker, which would guarantee to fit in the product- but as I unaware of the actual internal workings of the product I do not know if the wattage and current are correct. In addition, the ‘bulk buy’ savings are rather limited to home/personal use. By buying this product from a larger manufacturer should get this price even lower, but I will proceed with £3.01 for the time being.

Cost of Drive, £3.01 3. Charger Port (Female Input on the Product) As the exact type of port is not confirmed I used a similar product to base my pricings on, a 3.5mm audio jack. They are similar components and should have similar prices. Audio Adapter Cable Jack Adapter Cable Male Female

Retail Price

£1.67

3.5mm, £1.67

-20% VAT

£1.39

http://www.gearbest.com/cables-adapter/pp_72647.

- 100% Retail Mark-up

£0.70

html?currency=GBP&gclid=CJym8f_qtcUCFUHItAodW0EAnw

-£0.55 cost of male part

£0.15

Cost of female part not readily available online, not often sold separately to male part. Cost of male part had to be taken away based off estimation for cost of male part found elsewhere. Female part would be expected to be significantly cheaper. By reversing the cost of male and female parts together, and then subtracting the cost of the male part (worked out in previous section) the cost of female part could be estimated at 5p.

Cost of Charger Port, £0.15 4. Screws http://www.accuscrews.co.uk/cheese-head2mm Cheese head Stainless Steel Screw

screws/6433-SFE-M1-2-2-A2.html?uk_ google_shopping=1&gclid=CMeR_ KzltcUCFTCWtAodZDkA9g

Supplier offering discounts depending on order quantity, with a cost per screw of 10p for an order of 200, going down to 6p for an order of 10,000. Assuming that at least 1250 products were to be manufactured, the manufacturer would be able to take advantage of this reduced unit price.

Cost of Screw (each), £0.06, (for 8), £0.48 5. LEDs (Battery Indication Lights) 3mm White LED

Qty: £0.141

3000-9999: http://uk.farnell.com/multicomp/703-0102/led-bi-

Qty: 10,000+: £0.123

colour-3mm/dp/2112113?CMP=KNC-GUK-GENSHOPPING-MULTICOMP&CAGPSPN=pla&gross_

Supplier offering discounts depending on order quantity, with a cost per screw of 30p for an order of between 1 -24, going down to 12.3p for an order of over 10,000. Assuming that at least 3,300 products were to be manufactured, the manufacturer would be able to take advantage of this reduced unit price. Having looked at several website this seemed to be the average cost (varying by less than a penny each time) which is why I didn’t feel the need to shop around.

Cost of LEDs (for 1), £0.123, (for 3) £0.369 6. Circuit Board and Wires The circuit boards must be commissioned to be designed especially for the product, and then they must be put into manufacture. As the actual working product is not fully understood, an incredibly rough estimate for the cost has to be made. A circuit board compatible with Arduino is available for £1.68 (http://www.gearbest.com/development-boards/ pp_47025.html?currency=GBP&gclid=CM_uppzytcUCFcLItAodZDAAWA) Retail Price

£1.67

-20% VAT

£1.39

- 100% Retail Mark-up

£0.70

I then employed the reversal technique to see how the price was affected when taking away the VAT and retail mark-up. I made the decision to add 10p to account for the cost of the wires.

Circuit Boards and Wires, £0.80 7. Curved LCD Screen (and glass) Device Type

Battery Cost

iPhone 5S $36.09 (~£25.33) iPhone 6

$41.50 (~£29.19)

iPhone 6+ $51 (~35.88) Tablet Re- Min: £2.88 placement Max: £18.49 Screens

Source Business Insider Article showing what manufacturers paid for touchscreen in bulk (similar costs also reported on several other websites) http://www.businessinsider. com/iphone-6-iphone-6-plus-cost-breakdown-20149?IR=T

Ebay prices for the cost of individual replacement screen when sold to consumer. http://www.ebay.co.uk/sch/i.html?_from=R40&_ trksid=p2053587.m570.l1313.TR9.TRC1.A0.H0. Xtablet+replacement+screen.TRS0&_nkw=tablet+replacement+screen&_sacat=0

The cost of replacing a high-end tablet screen is considerably higher than those stated on eBay, because only lower end tablet devices can be replaced by the user at home. I do not think that they were a fair reflection of the actual manufacturing costs. The cost of the iPhone screens must be taken with some cynicism. Whilst it is a reflection for manufacturer costs, the screen for the iPhone is must more high end with features such as touch sensitivity and gorilla glass which not be required of my product. It is also just that much smaller than the screen size of my product, which would impact the price significantly (as shown by the £6 difference between the iPhone 6 and 6+). On the other hand the screen of my product is curved, which would also significantly increase the components cost.

The cost of the screen must be an incredibly rough estimate, but I think it would be safest go between the high eBay and lowest iPhone price and settle for £22.

Cost of Curved LCD Screen: £22 8. Charger Tablet Charger

Min: £4.49

http://uk.farnell.com/multicomp/703-0102/led-bi-

Max: £22.39

colour-3mm/dp/2112113?CMP=KNC-GUK-GENSHOPPING-MULTICOMP&CAGPSPN=pla&gross_

I attained the prices for a standard tablet charger with a micro SD. The prices were very varied, with the cheapest coming from offshore manufacturers. Taking into account that the chargers will bought in mass quantities I have chosen to go with the minimum cost- knowing that the real price is likely to be even less than this.

Cost of Charger: £4.49 Sourced Materials Material

Cost per Kg

Source

ABS

£0.72

Online Plastic Wholesaler: http:// plasticker.de/preise/pms_

Card