Optimization tools for design and marketing of new/improved products using the house of quality

Quality function deployment (QFD) has helped many firms realize significant reduction in product design costs and development time. The QFD process includes ranking customer preferences, rating the competitors, and parts deployment for the new/improved product. Prior to this research, such activities have been performed based on expert opinion, or the “best-in-class” approach. We develop and solve optimization models for the identification of consensus rankings and ratings, that take into account the priorities and perceptions of all the customers in a target market. Then, based on the consensus rankings, we identify a parts mix for the new/improved product that satisfies a budget constraint and matches or exceeds the performance expectations of all customers surveyed in the target market. Finally, we show how the QFD charts can be used to identify competitors that are falsely perceived as superior, as well as areas where the firm's marketing strategies have had the desired effects. Such insights are useful in developing the future marketing strategy of the firm.