Decision Sciences Journal
Volume 32, Number 1
Winter 2001
Effective Design of Products/Services: An Approach Based
on Integration of Marketing and Operations Management Decisions
Rohit Verma
Department of Management, DePaul University, Chicago, IL 60604,
email: rverma@condor.depaul.edu
Gary M. Thompson
School of Hotel Administration, Cornell University, Ithaca, NY
14850, email: gmt1@cornell.edu
William L. Moore
David Eccles School of Business, University of Utah, Salt Lake
City, UT 84112,
email: mktbm@business.utah.edu
Jordan J. Louviere
Memetrics Pty. Ltd., Sydney, Australia, email: jordan.louviere@memetrics.com
ABSTRACT. This paper presents an integrated framework
for designing profit-maximizing products/services, which can
also be produced at reasonable operating difficulty levels. Operating
difficulty is represented as a function of product and process
attributes, and measures a firm’s relative ease or difficulty
in meeting customer demand patterns under specified operating
conditions. Earlier optimum product design procedures have not
considered operational difficulty. We show that optimum profit,
market share, cost, and product profiles are dependent on operating
difficulty level. Empirical results from the pizza delivery industry
demonstrate the value of the proposed Effective Product/Service
Design approach.
Subject Areas: Choice Process, Discrete Choice &
Conjoint Analyses, Marketing-Operations Interrelated Issues,
Product/Service Design, and Service Operations. |