What is the design-to-cost target?

Market analysis plays a pivotal role in this process, as it helps identify the acceptable pricing range for the product in the target market. Understanding customer preferences and their willingness to pay is crucial for setting realistic cost targets.

However, it's imperative to exercise caution when implementing Design to Cost. In highly competitive or transparent markets, customers may have a clear understanding of the manufacturing costs associated with a product.

This knowledge can influence their purchasing decisions, and they may not be willing to pay a premium for a product that exceeds their perceived value, despite the company's profit requirements.

Therefore, companies must carefully balance the need to maintain profitability with the reality of market expectations. This might involve revisiting the design or seeking cost-saving measures to ensure the product remains competitive.

The Design to Cost method is a strategic approach in product development, where the manufacturing cost target is predetermined based on the market price and desired profit margin. This methodology ensures that the product is designed with cost-effectiveness in mind, from the onset.