Topic 9 - Design Tech

What factors contribute to the success of a company?

• Success relies heavily on the strategies adopted.

• Evaluation of products, services, and systems informs strategy selection.

• Strategies help achieve corporate objectives.

• Designers must consider ethical, cultural, economic, and intellectual property implications.

Define a "Pioneering Strategy."

• Being ahead of competitors by introducing a new product or innovation first.

• Example: Motorola introduced the 1st mobile phone in 1973 (commercially in 1983).

• Characteristics: Risky but offers potential for large gains, requires strong R&D, financial stability, and product champions.

• Success depends on extensive market research due to high risk and uncertainty.

What are some risks and rewards associated with a pioneering strategy?

• Risks:

  • High costs.

  • High risk of failure due to market inexperience.

• Rewards:

  • Potential for large profits.

  • Being recognized as a market leader and innovator.

What is an "Imitative Strategy," and how does it differ from pioneering?

• Imitative strategy develops a product similar to an existing new product.

• Leverages R&D efforts of competitors.

• Less risky than pioneering but requires strong development capabilities.

• Example: Samsung's first smartphone (2008) imitating Apple’s iPhone (2007).

What is a hybrid strategy, and what are its benefits?

• Mix of pioneering and imitative strategies.

• Benefits:

  • Maximizes profit and sales.

  • Provides a quick turnaround.

  • Reduces R&D spending.

  • Lowers risks compared to exclusive reliance on pioneering strategies.

What is "Market Penetration"?

• Strategy of increasing sales to existing customers or finding new customers for an existing product.

• Example: Expanding cell phone penetration from 22% of the population to a larger percentage.

• Involves techniques like product promotion and customer engagement.

Define "Market Development" and provide an example.

• Finding new applications for existing products to open new markets.

• Targets customers in a different market segment.

• Example: Nylon originally used for parachutes, now used in clothing and sports.

What does "Product Development" involve?

• Creation of new, modified, or updated products for existing customers.

• Approaches include:

  • Enhancing existing products with new features.

  • Expanding product range (e.g., different Coke flavors).

  • Adding new variations or designs.

Provide an example of product diversification.

• Development of new products and selling them to new markets.

• High-risk strategy.

• Example: A plug manufacturer producing varied colors, textures, and materials.

What is the Ansoff Matrix?

• A framework for product and market growth strategies.

• Includes:

  • Market Penetration.

  • Market Development.

  • Product Development.

  • Diversification.

What is Corporate Social Responsibility (CSR)?

• A form of self-regulation focused on:

  • Economic impact.

  • Social impact.

  • Environmental impact.

• Goal: Maximize benefits and minimize disadvantages of company operations.

• Example: 2018's Most Ethical Companies or evidence from major multinationals.

What is the role of market analysis in product success?

• Empathy for and understanding of the target audience is crucial.

• Factors analyzed include:

  • Standards demanded by end-users.

  • Distribution and selling methods.

  • Pricing and quality expectations.

  • Launch communication strategies.

• Correct analysis can determine success or failure, regardless of product quality.

What are the 4 P’s of the marketing mix?

• Product: Standardization and design of the product.

• Place: Location or method of distribution (e.g., online or physical store).

• Price: Setting the right price using strategies like cost-plus or psychological pricing.

• Promotion: Methods to advertise, publicize, or personally sell the product.

Define "product standardization."

• The process of setting generally uniform characteristics for a product.

• Helps consumers compare and encourages competition.

• Examples:

  1. Government standards - Regulations to ensure safety and compliance (e.g., CE mark for safety in Europe).

  2. Component standardization - Interchangeable parts across products (e.g., USB ports).

  3. Industry-wide standards - Agreements within industries to simplify and reduce costs (e.g., sectional beams in construction).

What factors determine product "place"?

• Bricks and Mortar: Physical stores, convenient for trying/seeing products but includes costs like rent.

• Online: E-commerce platforms (e.g., Amazon), offering convenience but with shipping times and return challenges.

• Hybrid Model: Combines online presence with physical storefronts.

• Direct from Manufacturer: Bypasses retailers for lower costs and direct distribution.

What are advantages and disadvantages of physical stores vs. online selling?

• Physical stores:

  • Advantages: Immediate experience, nearby product options.

  • Disadvantages: Travel time, parking, and higher prices.

• Online selling:

  • Advantages: Convenience, potentially lower costs.

  • Disadvantages: Shipping times, return complications.

Name and describe five pricing strategies.

• Cost-plus pricing: Adding a profit margin to total production costs.

• Demand pricing: Adjusting price based on demand; starts high and lowers over time.

• Competitor-based pricing: Pricing based on similar competitor products.

• Product line pricing: Offering different prices for variations within a product line.

• Psychological pricing: Pricing items just below round numbers to appear cheaper (e.g., $45.99 instead of $46).

What is cost-plus pricing? Provide an example.

• Adding a percentage profit margin to total costs.

• Example: If production costs $500 and a 10% profit margin is desired, the product price would be $550.

How does demand pricing work? Provide an example.

• Prices are set based on product demand.

• Initially high for maximum profit during high demand, then lowered as demand wanes.

• Example: Smartphones like iPhones start with high prices and drop as newer models are released.

What is psychological pricing? Provide an example.

• Setting prices just below round numbers to make products appear cheaper.

• Example: A pair of shoes priced at $45.99 instead of $46.

What are the key forms of promotion in marketing?

• Advertising: Audio/visual marketing communication.

• Publicity: Sharing information about the product.

• Personal selling: Door-to-door sales, market stalls, or direct interaction

What must designers consider when targeting their product, service, or system?

• Designers must understand the market and ensure their product aligns with consumer needs and preferences.

• Smaller market sectors have more common traits, making targeting easier.

What is a market sector?

A broad category of markets with similar characteristics, such as technology, utilities, or telecommunications.

What are the two main categories of market sectors?

1. Geographical sectors: Based on regional values, culture, and purchasing power.

2. Client-based sectors: Based on consumer, industrial, public sector, or commercial needs.

Other types of sectors

• B2B - business to business / B2C - business to consumer

• Public / private

How do geographical sectors influence product design?

• Products are designed to meet regional needs, such as block heaters (a device for heating the engine block of a vehicle.) for cars in cold climates (Canada) versus their irrelevance in hot regions (Egypt).

How do client-based sectors influence product targeting?

• Companies focus on different income or consumer groups, such as Tissot watches for affluent buyers versus Swatch for more cost-conscious customers.

How does technological advancement affect market sectors?

• Advancements lead to changes in products or services, which can shift target markets.

• For example, smaller microchips enabled powerful portable devices like iPads and smartphones.

What is the difference between a market sector and a market segment?

• Market sector: Broad categorization of markets based on similarities (e.g., technology, healthcare).

• Market segment: Smaller divisions within sectors, targeting customers with shared characteristics (e.g., early adopters, gamers in technology).

What is market segmentation?

• Dividing markets into smaller segments where purchasers share similar characteristics or tastes, allowing companies to tailor promotional campaigns and products.

What are examples of classifications for consumer market segments?

1. Income: Budget-conscious vs. affluent buyers (e.g., Daewoo vs. Mercedes).

2. Profession: Products tailored to job types (e.g., executive e-books).

3. Age: Toys for children, clothes for teenagers, or products for the elderly.

4. Family: Furniture for families vs. trendy pieces for singles.

5. Values: Eco-friendly products for environmentally conscious consumers.

6. Behavior: Loyal Apple users or occasion buyers (e.g., turkeys at Thanksgiving).

How do the needs of market segments impact product design and production scale?

• Large target markets: Low-cost, high-volume products (e.g., commuter bicycles in China).

• Affluent, niche markets: Premium, batch-produced items (e.g., Mont Blanc pens).

What is a product family?

A group of related products sharing common parts, assemblies, or aesthetics, developed to target familiar market segments (e.g., iPod → iPhone → iPad).

• Heinz family = 57 original varieties of product family

Why do companies develop product families?

To extend successful product lines, expand into familiar market segments, and meet evolving consumer needs.

What is the role of market research in product design?

• Market research identifies how to improve products, services, or systems and increases their chances of success.

• It determines the price users are willing to pay, setting an upper limit for design and production costs.

How does market research benefit designers?

• Helps understand constraints for design.

• Provides tools and skills for various contexts.

• Promotes lifelong learning.

• Enhances understanding of consumer needs and market behavior.

What are the types of data in market research?

• Primary Data: Directly collected by researchers (e.g., surveys, interviews).

• Secondary Data: Data collected by others (e.g., reports, articles).

• Qualitative Data: Non-numerical insights (e.g., opinions, behaviors).

• Quantitative Data: Numerical data used for statistical analysis.

What are some purposes of market research?

• Generate ideas for new products.

• Evaluate the market potential of products at different development stages.

• Develop market-suited products.

• Identify suitable promotional strategies.

• Gather demographic and family role data.

• Monitor economic and technological trends.

• Analyze consumer reactions to technology and green design.

What are the categories of consumer reactions to technology?

• Technophile: Welcomes technological change (early adopters).

• Technocautious: Embraces technology with hesitation (majority to late majority).

• Technophobe: Resists technological change (laggards).

What are the categories of consumer reactions to green design? (Topic 8)

• Eco-warriors: Actively demonstrate for environmental causes.

• Eco-champions: Advocate environmental issues within organizations.

• Eco-fans: Enthusiastically adopt eco-friendly practices as consumers.

• Eco-phobes: Actively resent environmental protection efforts.

What are the market research strategies?

1. Literature Search

   • Use reports, articles, databases to gather information.

   • Advantages: Abundant information, supports both qualitative and quantitative data.

   • Disadvantages: Time-consuming, requires sorting excessive data.

2. Expert Appraisal

   • Utilize expertise for product evaluation and design direction.

   • Advantages: Informed guidance and technical insights.

   • Disadvantages: Possible expert bias, difficulty finding experts.

   • Data: Usually qualitative.

3. User Trial

   • Observe non-specialists using the product.

   • Advantages: Easy and cost-effective.

   • Disadvantages: Users may behave unpredictably or lack experience.

   • Data: Usually qualitative.

4. User Research

   • Use surveys, questionnaires, or interviews to gather data.

   • Advantages: Cheap, quick, produces both qualitative and quantitative data.

5. Perceptual Mapping

   • Graphically compare products within the market.

   • Advantages: Simple, quick, easy to construct.

   • Disadvantages: Potential for bias.

   • Data: Qualitative.

6. Environmental Scanning

   • Monitor external factors influencing business (opportunities and threats).

   • Advantages: Identifies high-level trends.

   • Disadvantages: Lacks detailed specifics; requires additional research.

Why is understanding research strategies important for designers?

• Helps evaluate advantages and disadvantages of research methods.

• Assesses reliability and cost of research strategies.

• Informs and supports the design development process.

• Assists in identifying the most effective methods for uncovering design opportunities.

What role does branding play in marketing?

• Diffuses products into the marketplace.

• Represents the identity of a company or product.

• Communicates a company’s message via:

  • User experience.

  • Content design.

  • Advertisement tone.

  • Promotions.

• Helps the company stand out from competitors.

What is the definition of a brand?

• A product from a known source (organization).

• The organization’s name can also serve as a brand.

What is brand loyalty?

• Results from consumer behavior and personal preferences.

• Loyal customers consistently buy from a preferred brand, regardless of convenience or price.

• Based on perception of product superiority over competitors.

What are some examples of brand loyalty?

• Coke vs. Pepsi.

• Apple Mac vs. Windows PCs.

• McDonald’s vs. Burger King.

• iPhone vs. Android/Samsung.

• A consumer may prefer Nike soccer boots but Adidas cross trainers.

What strategies contribute to brand loyalty?

• Unique and memorable branding (e.g., Coca-Cola: "Happiness in a bottle").

• Clear communication of brand values through design and promotions.

• Quality product offerings and packaging that reinforce loyalty.

How do brands target different market segments?

Tailored strategies based on:

• Geographic location (urban vs. rural, international vs. local).

• Age (teens, tweens, elderly).

• Gender.

• Culture (national or subcultural preferences).

What role does packaging play in branding?

• Enhances product recognition in competitive environments (e.g., Coca-Cola bottle).

• Supports communication of brand identity and values.

• Can create emotional connections with quality or unique designs (e.g., Apple packaging).

• Often designed by specialized teams or outsourced to experts

What are trademarks and registered designs in branding?

• Trademark: A word, symbol, or phrase identifying a manufacturer’s products and distinguishing them from competitors (e.g., Nike Swoosh).

• Registered Design: Protects the appearance of a product, including shape, configuration, or patterns (e.g., Coca-Cola bottle design).

Why are trademarks and registered designs important?

• Protect a product’s identity and prevent infringement.

• Support diversification into product families (e.g., Nike extending its brand to clothing and accessories).

• Increase brand value and recognition globally.

How does publicity affect a brand's image?

• Positive Publicity:

  • Reinforces innovation and quality (e.g., Apple as an innovator).

  • Improves consumer perception and sales.

• Negative Publicity:

  • Damages brand trust (e.g., McDonald’s addressing environmental and health concerns).

  • Can overshadow positive perceptions temporarily.

What are the effects of successful branding?

• Influences customer feelings and buying habits.

• Encourages repeat purchases based on positive past experiences.

• Promotes company image and increases sales (including other products in the family).

How does global branding impact businesses?

• Provides global recognition and market dominance (e.g., Coca-Cola, Nike).

• Requires social and cultural awareness to avoid conflicts.

• Factors to consider:

  • Language differences in advertising and product labels.

  • Cultural customs, taboos, and color interpretations.

• Global market research can be expensive and time-consuming for new companies.

What is a corporate strategy?

• A corporate strategy is a long-term plan formulated by a company to achieve specific goals, such as growth, diversification, or market leadership.

• It guides decision-making across all business units to align with the company's overarching objectives.

What are the four main types of corporate strategies?

• Growth Strategy: Expanding the company's business through new markets or products.

• Stability Strategy: Maintaining current operations without significant change.

• Retrenchment Strategy: Reducing the scale or scope of the business to improve financial stability.

• Combination Strategy: Applying a mix of the above strategies across different business units.

What is competition-based pricing?

Competition-based pricing involves setting a product's price based on the prices of similar products offered by competitors, rather than solely on the company's costs or consumer demand.

What is reverse engineering?

Reverse engineering is the process of deconstructing a competitor's product to understand its design, components, and functionality, often to create a similar or improved version.

What is environmental scanning?

Environmental scanning is the study and interpretation of political, economic, social, and technological events and trends that influence a business, industry, or market.