OCMetro Business - (Steven Chen, CSUF Mihaylo College of Bus/Econ)

Handling comic-book digitization

Thu, 15 Jul 2010 12:21:00 GMT

The emergence of digital technologies changes the forms in which consumers experience media. In today's marketplace, digital readers such as the Kindle and iPad are an alternative to traditional print books. One of the fields hoping to explore new growth markets by digitizing its publication library is the comic-book industry.

Traditionally, comic books are published in 32-page monthly pamphlets that are sold in gas stations, Wal-Marts and comic stores. Later, these pamphlets may be collected into graphic novels that are distributed in large book-retailer chains. However, print formats, especially the monthly pamphlet, are facing obsolescence, as sales have been declining (or at best, stagnating) for the past decade. Some experts estimate the current pamphlet-reading population is between 500,000 and 750,000 individuals.

Facing shrinking sales, shifting consumer behavior and monopolistic distribution, comic publishers are exploring alternate channels of content distribution for business growth. The success of the iPad and iPhone has content producers and distributors in a rat race to develop new apps that will deliver comic content to old and new comic readers alike. For a subscription or an a la carte fee, consumers can buy the latest "Iron Man" comic and read it on their laptop or mobile phone.

In light of these movements, an important marketing question is: How does a tech-enabled change in form alter consumers' consumption experiences? This is a question that my colleague at Cal State Fullerton, Neil Granitz, and I investigated in an academic study. The results will be presented at this year's Comic-Con International, a pop-culture extravaganza that descends on San Diego every summer.

In a qualitative study involving book and comic readers, we find that the decision to adopt the new technology, converge (adoption of new and old tech) or not adopt was characterized by a complex tradeoff among utilitarian and experiential attributes. We find that utilitarian values (accessibility, convenience, ease of use, cost) are more salient to consumers who adopted e-reader devices; experiential values (social rituals, ownership, aesthetics, immersion) are more salient to consumers who rejected e-reader devices in favor of traditional print media; when there are experiential and utilitarian values that are nonsubstitutable by e-readers, then convergence is the outcome.

These findings reinforce the idea that there are many segments of comic readers and that publishers must produce media to meet the needs of all consumers. Particularly, an experiential value that cannot be replicated in technology is the social aspects of reading, such as hanging out with the comic guys, going to a comic store with one's children, and giving and receiving personal recommendations. Marketers must consider these needs to retain existing customers and reach new ones.

The Joneses have it all

Fri, 14 May 2010 10:22:00 GMT

The premise of the new movie, "The Joneses" is interesting for marketing students to consider. A new family moves into an upper-crust neighborhood, immediately capturing the attention of their neighbors. The Joneses have it all – beauty, success, charisma and the newest and greatest products, which they are more than willing to share with their newfound friends.

I am not giving anything away by revealing the concept. The Joneses are an “icon unit,” a model family strategically inserted into American neighborhoods by an unnamed marketing firm for the purpose of generating word of mouth for its corporate clients’ products.

Check out this new Mizuno Golf Driver. It gives you 40 extra yards.

These yummy, catered hors d’oeuvres? They are actually frozen foods. Don’t tell!

The Audi TT that my son is driving? Smooth ride and great acceleration.

Invidious consumption is the purchase of goods to inspire envy in one’s peers. It is a term coined more than 100 years ago by economist Thorstein Veblen in his critical "Theory of the Leisure Class." The corollary to invidious consumption is emulation. The Joneses know their invidious consumption, and they do it well. Wanting to be as cool as the Joneses, many individuals then go out and purchase the same products as the Joneses.

And that is the fatal flaw in the movie, because invidious consumption and its twin, conspicuous consumption, are obsolete. They no longer represent consumers’ purchasing strategies in our day and time. Let me illustrate.

People’s initial reaction to being introduced to a great new product by a friend is not “I want that too.” In fact, it is likely the reverse: “Oh … she’s got that, so I gotta buy something else.”

Ladies, isn’t it true that one of the most annoying things is to see someone in public with the exact same pair of shoes you are wearing? Isn’t it the most revolting feeling when one of your friends purchased the same Tiffany’s necklace as you, especially if that friend is someone whose taste you do not respect? Because that says something about you. …

Gentlemen, isn’t it awful when one of your best friends purchases the car that you’ve been dreaming about since you were in grade school? It’s horrible because now you can’t go and buy the same car. Even an alternate color will not be allowed. Your bud has crushed your dreams, and there’s nothing you can do but go into a corner and stew in anguish.

Products and brands are now tied to our very essence and identity. Everyone is now on a quest for distinction and individuality. To emulate signifies lack of identity, imagination and cultural knowledge. Emulation has no legitimacy in our social world. To do so is a cheap, low-brow Xerox strategy.

Let’s go back to the movie. Some audience members may be anxious that the Joneses may exist in real life. It is not outside the realm of possibility that greedy corporations could implement an insidious marketing plan such as the Joneses. Have no fear. It won’t work. "The Joneses" movie is operating on a faulty model that fails to recognize that it’s not necessarily emulation that is important for consumers, but how a product will aid consumers in their quest to distinguish.

That is the main motivation of consumption.

What is trust's role in O.C. consumption?

Thu, 22 Apr 2010 13:18:00 GMT

Marketing research has shown that trust can be decomposed into five dimensions: ability, concern, consistency, connection and sincerity. A recent study conducted by OC METRO on the Most Trustworthy Brands found that O.C. consumers weighted ability and consistency above the other dimensions of trust. I recently had the chance to sit down with OC METRO to talk about why that is. You could watch the video of it here, but I will provide a synopsis below.

What does the survey results say about O.C. consumers?

The finding show that O.C. consumers are more concerned about the performance-based aspects of trust as opposed to the emotional-based aspects such as sincerity and concern.

This is consistent with what is called “calculation-based trust.” When consumers engage in calculation-based trust they are assessing the trustworthiness of firms by evaluating their ability to fulfill orders on time, their overall reliability and whether their products are long lasting and durable. However, this form of trust is fragile at best, because any rupture to performance expectations will also result in a rupture in the consumer-brand relationship.

So to answer the question, this study shows three things about local consumers: that they are more utilitarian in their brand relationships than one might initially think; that they have high-performance expectations; and that they might not be brand loyal when performance expectations are not met.

Why are these five trust measures important for companies?

It is important that a firm’s reputation be linked to trust. Consumers avoid purchasing from firms that they do not trust. A firm’s reputation gets around fast nowadays, due to word of mouth and particularly online word of mouth.

Companies know this. That is why Toyota keeps pushing its apology commercials emphasizing the reliability of the vehicles, in the face of the automaker's recent technology debacles – to gain back consumer trust.

What is the role of trust in capturing consumer allegiance to a brand?

The role of trust in capturing consumer allegiance is two-fold.

The first deals with repeat purchase. Over and over, research has shown us that trust is a key element to successful relationship marketing, especially in environments where there is minimal interaction between the seller and the buyer, such as the online world. Consumer purchase decisions are made on the basis of trust, and consumers will engage in repeat purchase behavior with brands that they trust.

The second deals with transgressions. Research has also shown us that trust can work to a brand’s favor in the event of a transgression. Consumers might forgive a brand for a violation based on past positive experiences with the brand. Such was the case with Harley Davidson. HD is a brand that is built on the values of American patriotism and machismo. But several years ago HD started to manufacture its bikes in China – a violation of the brand. Consumers ultimately forgave them.

Five everyday problems I seek to fix

Fri, 19 Mar 2010 13:48:00 GMT

A function of design is to identify and solve problems that consumers face in everyday life. The problem-solving orientation of design parallels the central axiom of marketing – that successful products satisfy consumer needs.

Please allow me the opportunity to focus on issues of the everyday variety. Below, I identify five problems that represent product-design opportunities for marketers. Will someone please create solutions for them?

1. 3-D GLASSES FOR PEOPLE WITH GLASSES

With the advent of movies such as "Alice in Wonderland" and "Avatar," 3-D movies are no longer just gimmicks. They might be the way of the future. If these movies are the future, then someone has got to do something about developing 3-D glasses for people with glasses.

Putting two pairs of glasses on my face is quickly turning into a pet peeve of mine. It is turning me away from the 3-D IMAX experience. It is cumbersome, odd, and I am definitely not trying to looking cool by putting plastic 3-D frames on top of my Ray Bans.

2. TECHNOLOGY-UNFRIENDLY KHAKIS

Today, men are carrying around more and more in their pockets. They have wallets, keys, a mobile device (or two), pens and coins, just to name a few common things. After all this stuff is stored in the pockets, there is an unaesthetic bulge that resembles a bag of oranges. To make things worse, when in a seated position, it is nearly impossible to access these items. Try collaring your cellular phone when driving – without performing in-car acrobatics. It’s hard!

In Asia, men have started carrying man-bags as part of the solution, but that is not yet socially acceptable here in the U.S. We also have cargo pants, but sometimes we need the business-casual look. We need khaki pants that look professional, but also have functional storage and access capabilities.

3. BLUETOOTH HEADSETS GET LOST TOO EASILY

Speaking of technology, someone needs to develop a Bluetooth headset that can be easily located once displaced. Bluetooth headsets are now mandated by California law for driving. But between recharging and carrying it around, it is easily misplaced. I am on my fourth headset. I spent more on headsets than the phone itself, and I know this isn’t going to be the last one that I lose. It is only a matter of time.

4. WIRE HELL

With Bluetooth and the development of other wireless technologies, one might think we would see a decrease in the amount of wires in the home. However, the reality is that the wireless technologies’ chargers and adapters have wires that plug into the computer or the power outlet. As consumers purchase more of the next great things that latch onto their home-entertainment-super-computer-system, the backend matter starts resembling an unstoppable Matrix-ian nightmare. Please save my home!

5. WARMING BABY BOTTLES IN PUBLIC

I credit my friend with this idea: Suppose you recently had your first baby with your partner, and you love your baby more than the world – except for the fact that you have to feed her warm milk. At home this is easy. But one of the most annoying things is how to feed your baby warm milk when in public. You are tired of using your old method of warming the baby bottle by hauling an additional piece of Tupperware, running to the public bathroom to run hot water into it and soaking the bottle in the warm water.

Your friends tell you there are different options in the marketplace, and that you could easily shop for it. There are car-charger units, but let us say you are at Disneyland. You will not run back into the car to warm the baby bottle. There are battery-operated units, but they seem a little too big to be portable. There are single-use gel packs that use a chemical reaction to generate heat. But these don’t seem sustainable, and it gets expensive to purchase over time. So until a portable, convenient and sustainable solution comes along, the tried-and-true method of Tupperware-soaking will be maintained.

CONCLUSION

These five examples are problems that I encountered in my daily experience. There are so many more problems yet to be discovered. Next time you get really mad at something, don’t curse or yell. Instead, write down the problem on a Post It and send it to your local product designer or marketer.

Do infomercial products fix anything?

Fri, 19 Feb 2010 13:33:00 GMT

One measure to gauge the success of a product design is whether the product design solves a problem or not. The harder the problem solved, the greater the design.

Many problem-solving designs are found in infomercials. We hate them. We love them. We love to hate them. Infomercials are the sell-center for many creative inventors who develop products that help people improve their everyday lives. We have rotisserie grills that can cook a gourmet dinner for a medium-size army platoon in a simple device that is as small as your toaster. We have food processors that can slice and dice vegetables into an assortment of shapes and sizes. We have magic towels, sold by a desperate-looking fellow named Vince, which can soak up all the fluids in your body by a mere touch.

Today, I will be burning on two infamous infomercial products that purportedly solve soft problems. In other words, bad design.

One problem with the world today is that Americans do not have time to workout. That is a real issue. According to a recent study, Americans are the most productive people on earth (followed by the Irish, FYI). But because Americans are more productive, they are also the most out of shape. Some marketers have taken this as a call to design products that help Americans stay in shape during the course of their busy lives.

We don’t have time to workout because we are always at work. So would it not be wonderful for us to have a product that allowed us to workout while we worked? Enter the Hawaii Chair. The chair provides an abdominal workout while you are on the job! Incredible! Not really: Watch the video. One must be insane to think that any work could be accomplished while the mechanized seat rotates and jerks the body violently in circular motions! Not to mention one would look absolutely mad sitting in one these things.

Sometimes, one does have time to workout, but this can be grueling. Repeated reps from curling irons can impact joints in negative ways. Wouldn’t it be wonderful if we had a product that did the hard stuff for us without us having to move? Enter the Shake Weight. It is a vibrating weight that a person holds in a stationary position (as opposed to curling). The workout emerges from the "challenge" of holding the weight still, while it furiously vibrates. And the kicker is that it now comes in a model built especially for men.

Besides being easy fodder for late-night talk shows, these products are epic fails for another reason. They fail because they do not properly define, or solve, the problem. With its ungainly motions, the Hawaii chair causes more problems than it solves. The only workout given is trying to stay on the chair. The Shake Weight doesn’t save Americans more time, because the time holding the Shake Weight can easily be spent curling a traditional iron. Overall, the products here speak more to the laziness of a small segment of Americans more than it does to real problems of working out.

Is nature good or bad for us?

Fri, 15 Jan 2010 14:36:00 GMT

Dear Designers of Nature Products,

I am confused. Is nature good for us or bad for us?

There is a double discourse in the marketplace with respect to the design of nature products. The first says that nature is good for us, but that it’s fragile: Our world is in peril (because the ubiquitous Anderson Cooper tells us so). We should eat organic foods that are grown from the earth because they are better for our bodies. So we should protect our earth by buying biodegradable, recyclable goods that reduce our carbon footprint. We should buy green, hybrid cars so that we don’t burn as much fossil fuels.

But there is another discourse that says nature is evil, revengeful: Our world is perilous. We should buy sunblock with SPF 1,000 so the harmful rays won’t explode our faces. We should buy antihistamines so we can breathe again and shield ourselves from the stupid flowers and pollen in our backyards. We should buy pest repellent to protect our bodies from the disgusting critters that are a part of your nature. We need an array of filters or vacuum-sealed water to remove the taint of nature from our water.

So what is it, Designers of Nature Products? We want to protect nature, but every time we step outside our homes, it is out to destroy us!

Using shampoo to wash your face

Wed, 11 Nov 2009 08:16:00 GMT

Imagine the bottle of Pantene (or insert fave brand) shampoo in the corner of your bathtub. Would you ever consider using it to wash your face? Alternately, would you use your shampoo as body soap? Would you ever use bar soap to wash your hair? How about squeezing a few drops of Palmolive to wash your face or shampoo your hair?

You should try it!

There is one product out there that we all buy, and we probably don't immediately recognize its name: Ammonium Laureth Sulfate.

When people buy hand soap, bar soap, shampoo and dishwashing soap, they are essentially purchasing the same thing: Ammonium Laureth Sulfate. That is to say, marketers have successfully segmented the body into a half dozen parts and are selling you the same product for each part of the body – arms, hair, body, legs – so as to optimize the profit function. Look at the aisles of your local supermarket or Target: endless shelves and rows stacked high to low of Ammonium Laureth Sulfate.

This is the crowning achievement of the rational marketing science called segmentation. Except the segmentation happening here is not groupings of consumers, but rather the segmentation of an individual's body.

Marketers have been successful in differentiating Ammonium Laureth Sulfate through marketing communications, so each incarnation of it occupies a different space within the minds of consumers. For example, Caress has infused its line of liquid body soaps with exotic oils from the Far East. It's for your body, not your face or hair. One variant of Herbal Essence shampoo has special sea kelp from the coast of Australia. It's for my hair. But do I really want to run seaweed all over my hair? Well, not really, because if I wanted to do that, I could just swim in the polluted waters off Huntington Beach! But that's not the point.

The point is this. A person could really buy Caress liquid soap and use it for at least four functions: shampoo, body wash, facial wash and hand wash. If that person really wanted to, she could also use it to wash her dishes and car. But no one will do this, because we have been subjected to marketing communications, which have parsimoniously carved out psychological spaces in our brain wherein these products exist.

Now go to the lotion aisle and perfume aisles. And tell me if a wicked pattern is emerging here.

Designing products for customers

Tue, 22 Sep 2009 10:44:00 GMT

Developing superior products that are appealing to customers is a central goal of marketing and product design. Companies recognize that they can no longer compete on price alone, and that it is necessary to provide products and services that offer functional, aesthetic and emotional value for consumers.

One way to achieve superior products is through design. But how do designers design? What type of design thinking is involved? User-centered design and design-driven innovation are two strategies that help managers and design practitioners develop superior products that appeal to consumers. These two strategies are philosophically opposite to each other.

User-centered design refers to an approach where designers get close to end users to better understand their needs. It involves the use of end-users as a source of product innovation, and one commonly used technique to interface with end users is design ethnography. For example, the design firm IDEO interviews end users to discover problems that people may face in everyday life. Through iterative rounds of observations and focus groups, IDEO generates, develops and refines product solutions. For IDEO, what is important is that the product solution solves a usability problem. Whether the product solution expresses the IDEO brand and house style is a secondary concern.

Design-driven innovation rejects the focus on user requirements in favor of pushing the firm’s vision about possible new product meanings and languages that could diffuse in society. Some techniques associated with design-driven innovation are market visioning, creative collaborations and the use of analogical thinking. For example, Bang and Olufsen do zero customer research. Instead, the company encourages their designers to use their imagination to develop innovative products that are aligned with the brand and house style.

It is currently unknown which approach is the most effective in generating designs that have value for consumers. My intuition is that a utilitarian approach that focuses on ergonomics would be better for functional products, such as power saws and kitchen appliances. A design-driven innovation approach that focuses on imagination and fantasies may be more effective for hedonic products such as toys, service environments and automobiles.

Can consumers escape the market?

Wed, 27 May 2009 09:53:00 GMT

Anti-consumption and consumer movements have long fascinated me. Along with peers at Cal State Long Beach and the University of Hawaii-Manoa, I now have the opportunity to explore this interest through research that examines radical social and anti-consumer movements, such as freeganism, community-supported agriculture (CSA) and the do it yourself (DIY) philosophy. In a nutshell, these movements are composed of people who are trying to escape the capitalistic marketplace, which they view as the source of class inequalities, environmental detriment and greed by minimizing consumption, establishing a system of sharing outside of the mainstream marketplace and incorporating the production function into their daily lives. The goals of our research are: 1) to better understand these movements and their values, and 2) to answer the question of whether people can really escape “the market.”

One example I want to hone in on: freegans. According to freegan.info, freegans are people “who employ alternative strategies for living based on limited participation in the conventional economy and minimal consumption of resources.” Freegans externalize this mission through waste reclamation, or in other words, looking into dumpsters for re-usable products that are disposed by businesses and individuals because of perceived defects. Other freegan principles include waste minimization, eco-friendly transportation, free housing and voluntary joblessness. In short, freegans are people who are trying to escape the market based on money and spurious consumption.

But can they really? Yes. A lot of people like to think so.

According consumer resistance advocates, anti-consumers are eroding marketers’ control through subversive practices that de-centers and fragments controlled marketing efforts. Freegans are the poster children for anti-consumer behavior, because they reject the whole market system: They don’t shop, they don’t buy, and they don’t work. Some even reject currency.

Anti-consumers also emancipate themselves from controlled marketing efforts by culture jamming – altering and inverting corporate logos and goods to change and subvert the intended meanings, usually pejoratively. For example, culture jammers have transformed the Starbucks logo into “Charbucks” to bring attention to the failings of free trade farming and the low quality-high price ratio of Starbucks’ coffee. One can easily find these logos through a simple Google image search.

Certain subcultures and communities also view themselves as outside the homogeneous, corporate market. For example, Harley Davidson riders, gay communities, punks and clubbers reify their own special brand of communal consumption that they set apart from the “mainstream” – only temporarily.

A related and more realistic perspective is that people cannot fully escape the market, but people can create the illusion of temporary escape. Emancipation might occur, but if so, only locally and temporarily. The feeling of escape resides in the minds of participants much longer than the actual lifecycle of the community. This is the lesson learned from anti-consumption festivals such as Burning Man, where people create a temporary community based on carnival and sharing, only to return to the their homes, their jobs and the market-based world after the festival ends.

Some critics say no, because as much as people want to escape the market, the chances of this happening are bleak. Dominant market forces will absorb and assimilate them. This is the central idea of co-optation theory. Businesses absorb and appropriate countercultures for profit, and make countercultural goods and meanings available to the mainstream masses.

Consider the case of Hot Topic, which has commercialized Gothic and Independent Rock music, apparel and aesthetic for mass consumption in America’s shopping malls. We are also beginning to see this with respect to the green movement. Have you noticed that every car commercial without exception now emphasizes green social responsibility? A recent Honda car commercial communicated the company’s minimized use of material resources on the production side, and the minimization of waste on the consumption end through the use of hybrid engines and biodegradable material.

This perspective lends credence to an argument made by Doug Holt, a famous marketing scholar. He conceptualized consumer movements as a form of market-sanctioned cultural experimentation through which the market rejuvenates itself. The nature of the market is characterized by global corporations and brands that colonize local cultures, counterculture and consumer movements. In other words, there is no escape.

Previous research in anti-consumerism focuses on escaping the market. One key insight from our research so far, is that the question of escaping the market is not even relevant. Anti-consumers are not merely looking to escape the market. They are looking to shatter it completely. The freegans want to supplant the capitalist market with one based on need, barter and sharing. Green people and CSA farmers would like to destroy a market based on monopoly, profit, sales growth and endless consumption, and replace it with a business world where the bottom line is planet and people. DIY artists would like to eliminate the homogeneous marketplace filled with mass-produced, generic products with a heterogeneous one where a production run of 1 is possible.

While these anti-consumers are different in their philosophies and practices, the one common aspect between freegans, CSA farmers, the green movement and DIY artists is the key issue of changing rational consumer behavior. In order to break the system and replace it with a utopia, the solution is to replace it with one that is sustainable and practical. And the only way to change the world is to change basic human behavior – to get people to the point that they believe using gasoline is not the rational choice, that packaging water and food in plastics is not the best and cheapest solution, that we don’t need 100 articles of clothing and four cars per household to complete our identity projects.

To quote Tupac Shakur, in order to shatter the market, “let’s change the way we eat, let’s change the way we live, and let’s change the way we treat each other.”

The O.C. design corridor

Tue, 28 Apr 2009 12:08:00 GMT

When one thinks of design hubs, Orange County doesn’t exactly come to mind. One is more apt to conjure images of Italy, New York, or Scandinavia. However, the O.C. is quietly the home to a diverse cluster of notable design firms. To some insiders, these firms comprise Orange County’s “design corridor.”

Irvine, for example, is home to some of the most prolific car design studios in the United States. Calty, Toyota’s design and R & D wing, is responsible for developing the next generation of Toyotas and Lexuses. The bestselling car in the United States, the Toyota Camry, is designed right here in Southern California. Drive south on the 405 freeway, and you will bump into the design offices of Toyota’s competitor, Mazda, which recently unveiled its Nagare concept. It showcases the new surface language and vision of Mazda cars in the near future.

And Fullerton-based Hyundai, which is rebuilding its brand around design, took home the Car of the Year award at the Detroit Auto Show for its new luxury model, the Genesis. Not a bad turnaround for Hyundai, which has traditionally been associated with cheap quality and bad design.

Cypress is home to Vans headquarters. Vans is a premier skate and surf lifestyle brand, best known for its checkerboard patterned shoes. The Vans products are worldwide, but all the designs emerge from the small teams of designers who are based in the Cypress headquarters. Employees can be seen zipping up and down the office hallways on their skateboards and rollerblades, wearing T-shirts and distressed denim. Not your typical corporate environment! Van’s Cypress HQ is also famous for its large indoor skate park, where avid skateboarders are invited to try out Vans’ newest skateboarding products.

Another cluster of design firms can be found just beyond South County. San Diego County is home to three types of design firms. Most notable are the design centers of Mercedes-Benz and Porsche. Keep an eye out for the black-taped prototypes of these brands’ newest concepts prowling the 5 freeway. Second are design boutiques such as DD Studio, Vapor, GaddLight and Ziba. The stuff that spawns from these design houses are of the industrial type – medical devices, audio and electronic equipment, syringes and other industrial installations. These are not the flashiest and most colorful of stuff, but they are the types of designs that save lives, improve hearing and make medical tools less intimidating for the people who need them. Finally, the Carlsbad area is home to a large congregation of home-improvement design firms. For example, Gomolka, Integration and Dugmore offer landscaping and glasswork solutions for luxurious, modern living.

The design that happens in the O.C. is not the flashiest stuff, and there is no integrative aesthetic or identity that ties them all together. Maybe that’s why the O.C. design corridor is so low key. But these firms, and the dozens of other O.C. design studios that went unmentioned, are quietly developing products and brands that not only impact local denizens, but the entire world.

Design and the product life cycle

Thu, 09 Apr 2009 11:15:00 GMT

A staple of Marketing 101 is the product life cycle, or PLC, theory, which teaches us how to manage the sale of a product over time.

PLC theory divides product lifespan into four phases – introduction, growth, maturity and decline. The theory defines each phase in terms of sales, costs, profits, customer type, competitor behavior and marketing objectives. For each phase, PLC theory also outlines the appropriate marketing mix strategies that lead to success.

What is the relationship between design and PLC theory? How does design impact the marketing mix strategies for a product? The answers are not in any textbook.

1. Design can bump up the sales curve for growing and mature products. PLC theory tells us that the objective of products in the growth and maturity phases is to capture market share and maximize profits, respectively. One way to do this is to offer more diversity of products based on different features of the product line.

Customers for products at the growth and maturity phases are early adopters and the middle majority. To tap this diverse taste market, firms could provide multiple variants of products. One way is through design – different product colors and shapes.

A real-world example is the iPod Nano. The fourth generation Nano debuted in November, but as a product concept, Nano has been around since 2005. It is the epitome of the growing-mature product. When Nano first launched, it was offered in only two colors. Six colors were offered to customers in the second and third generations. Currently there are eight “nano-chromatic” colors.

2. Design gives new life to declining products. How can firms create new demand for an old product?

? Find new customer segments for the same product.
? Find new uses for the same product.

Some firms do it by redesigning declining products. Nowhere is this more transparent than in the automotive industry, where declining car models receive a mid-cycle refresh.

An example is the seventh-generation Toyota Camry, aka XV40, which was introduced in 2006. The XV40 is now in the middle of the Camry’s five-year model lifespan, and sales are no longer as robust as the debut year. At the 2009 North American International Auto Show, Toyota revealed a redesigned seventh-generation 2010 Camry. Changes include a new front fascia, redesigned headlights and taillights, new rim designs, new engine options and different audio system options.

The lesson here is that design can briefly rejuvenate sales of products by changing consumers’ perceptions of old versus new.

3. Innovative, iconic designs can extend product lifespan. Increasing competition has put additional pressure on firms to generate new products at a quicker rate. This means that firms have to continuously throw money at research and development. This breakneck pace can be debilitating and exhaustive. However, firms can alleviate this pressure by creating long-lasting products through innovative design. It sounds difficult, but it can be done, albeit with a lot of investment in the design department.

Consider Volkswagen’s new Beetle. Save for the annual cosmetic upgrades, the design has remained unchanged since its debut over a decade ago!
Why is it so durable? It has an iconic design that’s non-substitutable and so patently unique that any imitation would be a blatant Xerox copy job. Non-substitutable design gives a product more breathing room because the competition effects – at least on the design dimension – are fewer. The new Beetle has juiced every cent out of its design.

The lesson here is that managers could put more money in research and development, and initial design, to create iconic designs that are durable.

The age of design

Wed, 04 Mar 2009 15:38:00 GMT

It was as if Big Business woke up from a mutual slumber at the turn of the millennium and proclaimed, in unison, “Let’s do design!” The echo of this proclamation is now everywhere. Check out these current corporate philosophies and campaigns:

“Design for All” – Target

“Democratic Design” – IKEA

“We make sure great design ideas live on to become ultimate driving machines.” – BMW

“Less is More” – Apple

"Building high-performance, easy-to-use and beautiful products with a distinctive Sony flair." – Sony

We live in an age of design: Retail stores are now lavishly designed spaces that encourage customers to stay with captivating sights and sounds. Products are beautiful, shiny and packaged in such as way that the best part of buying it is opening it up. Ads are creative forms of entertainment that consumers seek out – no longer things to be fast-forwarded and passed up.

Design goods command premium prices because they fulfill consumer desires as opposed to utilitarian needs. In other words, design has infiltrated and taken over the four pillars of marketing – distribution, product, promotion and price.

Why design? Why did Big Business do this? First, companies recognized that they can no longer compete on price alone, and that it was necessary to provide products that provided functional, aesthetic and emotional value for consumers. One way to achieve this was through design. Through design, companies believed they could attract customers by offering products that not only worked, but were also pretty and provided emotional enjoyment.

Second, some companies believed that the incorporation of design into the overarching marketing strategy was necessary to be successful. This is taking design and applying it beyond the product level and into the brand and service levels. The poster child for this is Apple. Apple’s “Less is More” philosophy not only applies to iPods and Macs, but it also impacts every aspect of its marketing mix, product development processes and organizational structure of the firm. Now, Apple is the design maven of big business, and everyone is trying to emulate it.

The admittedly fuzzy concept of design will be the central focus of this blog. Future postings will feature topics about design in the business world, reactions to current events regarding design, case examples, green design, relevant design history and design strategies. It is my hope that readers will take away something design-related that could give them an edge in this crowded marketplace.