Commercial Aspects - Blog 4

Using a marketing plan as the basis of new product development (NPD) processing can give new insight into established markets and can help position a product successfully in an emerging market.  In every stage of an NPD process, the design is tested against the market research; does the consumer have a need for this product? Will this product give the company a competitive advantage? Can you target a new sub-market by increasing your product mix width?  The product only continues to the next stage of development if it passes these checkpoints.

Creative innovation, however, can often take the opposite approach.  Where NPD examines a market ‘want’ to come up with a product, product design has the ability to give the customer a product that they ‘need’ – even if they don’t know they need it yet!  For example, consider the 1932 Anglepoise lamp; its creator, George Carwardine, was a car designer who came up with the idea for a sprung system lamp while working on a suspension system for a car (Wilkinson, 2013).  It was an idea sparked from a totally unrelated subject to product design, but applied to a lamp it revolutionised task lighting, allowing the user to move the lamp with only one finger. As the product came to market the Second World War broke and the product was advertised as the “ideal blackout lamp” (Langworthy, 2013).  Years later, the iconic design is a constant in our homes and offices as a desk lamp.  At the time of designing, Carwardine had no knowledge of the consumer product market (in fact consumerism was in its infancy), but quickly this lamp was assigned a need to promote it to consumers.  You don’t want this lamp, you need it. 

The best products are the ones we build relationships with; we enjoy them in their own right when we first buy them, we enjoy the experience of owning them and, when they eventually break, we mourn their passing.  These are the types of products that give us the most joy – ones that provoke happy experiences.  As a product designer this is the ‘holy grail’ of product design as it stops the consumer apathetically buying meaningless objects and instantly discarding them. 

In my opinion, the flaw of the NPD process is dwelling too much on what the consumers say they want and trying to design around that.  For example, let’s say a pair of your glasses breaks because you’ve sat on them.  NPD would produce glasses chains to keep them round your neck, or a hard case to protect them.  Innovative design would say “why don’t we use shape memory alloy, then you can sit on your glasses as much as you want”.

Though the insight gained through NPD processes is invaluable, the most important factor in creating products is to make something meaningful that addresses a greater need.  Thus leading with excellence in product design and creative innovation is the best way to develop a product.

References

Langworthy, H., 2013. The Anglepoise: a History. [Online]
Available at: https://twelvetwentyseven.wordpress.com/history/
[Accessed 17 May 2015].

Wilkinson, P., 2013. Great Designs: The world's best design explored & explained. 1st ed. London: Penguin Group.

Commercial Aspects - Blog 3

A product is defined as ‘anything that can be offered for use and consumption, in exchange for money or some other form of value’, (Baines, et al., 2013, p. 204).  Product is considered to be one of the four main elements of the marketing mix – also called the 4P’s; product, place, price and, promotion.  To analyse the different elements of a product, it can be split into three major categories; core product, embodied (or actual) product and, augmented product (Kotler, et al., 1999).  The aim of this anatomy of a product break-down is to allow the marketer to fully understand the purpose of the product, and to provide consumers with a reason to buy and to keep buying the product.  

Classification of the product into durable, non-durable and service categories allows further analysis of consumer buyer behaviour, and an insight into the level of involvement a purchase has.  Consumer groups weight product involvement differently; social grades A and B (UK JINCNARS social class classification) put emphasis on the experience a product will deliver once purchased, where as other social grades seek perceived good value.  If a product is being developed using market-led design techniques, target audience intelligence should be used to gain an advantageous market position and vice-versa, to increase brand delineation.

Within the 4P’s of marketing, Place encompasses logistics and distribution channels, as well as retailer location – it dictates where to place the product so that it reaches the target market at the best possible time and location to secure a purchase.  Distribution channels vary depending on the product being sold and the amount of control needed.  For intensive, mass marketing, distribution may be streamlined by utilising intermediaries such as wholesalers and agents (particularly for foreign and new markets).  However, this can distance the company from the consumer, reducing brand loyalty and overall buying experience, and increasing time-to-market.

Pricing of a product begins with calculations of the manufacturing and selling costs of an item.  These proposition costs can be categorised into fixed costs (e.g. office buildings) and variable costs (e.g. energy costs) (Baines, et al., 2013).  Once the base level of costs has been calculated, the product can then be examined to determine customer perceived quality and value.  There are four common pricing approaches used by companies to determine product price; cost-orientated, demand-oriented, competitor-orientated and, value-oriented. Fast moving consumer goods (FMCG), such as toothpaste, are often competitor-orientated to be highly competitive in a saturated market.  For well established high-end goods, such as Apple’s iPhone, a demand-orientated approach used to set profit margins on how much customers are prepared to pay (Wakabayashi, 2015).

Many of the components of a marketing plan are interdependent; for example the 4P’s should all be considered with regards to the target market and each other to contribute towards a successful marketing strategy.  To efficiently manage these elements, feedback should be taken at every level possible, and exit and repositioning strategies calculated to quickly adjust to any issues.  Feedback can be gained through the integrated marketing communications (IMC) set up as part of the product promotions, allowing comprehensive control over the continuation of the marketing plan by adjusting SMART targets and promotion scheduling on a Gantt chart.

References

Baines, P., Fill, C. & Page, K., 2013. Essentials of marketing. 1st ed. Oxford: Oxford University Press.

Kotler, P., Armstrong, G., Saunders, J. & Wong, V., 1999. Principles of Marketing. 2nd European ed. New Jersey: Prentice Hall.

Wakabayashi, D., 2015. The Wall Street Journal - ‘Staggering’ iPhone Demand Helps Lift Apple’s Quarterly Profit by 38%. [Online]
Available at: http://www.wsj.com/articles/staggering-iphone-demand-helps-lift-apples-quarterly-profit-by-38-1422394222
[Accessed 15 05 2015].

Commercial Aspects - Blog 2

Consumer buyer behaviour can be divided into four influence categories; culture, social, personal, and psychological (Armstrong & Kotler, 2014).  Individually, these categories appear distinct, but in practise there tends to be an overlap between them.  For example both culture and personal include the influence of social class; where culture approaches the influence from a nationality and subculture perspective, personal includes economic background and occupation and therefore spending power and lifestyle.  In turn, social takes account of aspirational groups.  This method of broadly aligning consumers by their demographics becomes problematic as consumers are inherently individual.  Psychological profiling - analysing consumer’s motivation and beliefs about brands and products - is a newer technique, but is only applicable to westernised cultures where self-development is key (Drummond, et al., 2008). 

As a marketer, it is extremely valuable to be able to assess consumer’s beliefs and attitudes towards a product, and to establish whether it is through conditioning, social or cognitive learning that brand awareness occurs.  Information about the consumer’s motivation can be attained through qualitative market research.  A successful marketing plan utilises Marketing Information Systems (MkISs) to marry buyer behaviour, market trends and decision models.  Unfortunately, issues can arise when developing MkISs if due care is not taken to ensure they are unbiased, ethically collected and analysed correctly.  During the recent 2015 General Election in the UK, many news websites harvested opinion poll style data from Twitter, leading to bias in their analysis methods (Bright, 2015).  This is because certain demographics are far more likely to use twitter than others, so it does not give a full cross-section of the country’s opinions.

Though external market data is less likely to be biased, a considerable amount of trust has to be put into the bodies publishing the data.  The accounts of larger UK companies tend to be published through Companies House, but if an emerging market is being analysed, marketers may encounter problems finding quantitative data on smaller companies and potential new entrants.  It is therefore important to consider other analysis tools such as Porter’s 5 Forces (Porter, 1980), which takes the macro-external environment into account, as well as perceptual mapping and positioning to analyse the competition in a more qualitative manner.

The Resource Based View (RBV) considers the core competencies of a company in order to conceive a marketing plan looking from the inside out.  Analysing the strengths and weaknesses of the company using SWOT (Strengths, Weaknesses, Opportunities, Threats) analysis allows the business to adapt its objectives to complement the opportunities available in the target market, outlined in the PESTLE (Political, Economic, Social, Technological, Legal, Environmental) analysis.  This gives the most thorough situation analysis and allows the business to play on its strengths and turn weaknesses and threats into potential opportunities.

Within the marketing plan I developed, market cannibalisation could have become a major threat.  The app market, though not direct competition, could be seen as a more convenient alternative to the product I was trying to place and so could encroach on the target market.  Having isolated this potential threat to the product, I was able to adjust my plan to introduce a partnering scheme – partnering with popular mindfulness app developer, Headspace.  This would be mutually beneficial to both companies – allowing Headspace a physical product to promote, and inhibiting any rivalry from the products main competitor.

References

Armstrong, G. & Kotler, P., 2014. Principles of Marketing. 15th ed. Essex: Pearson Education Limited.

Bright, J., 2015. Elections and the Internet: Could Social Media Forcast Political Movements?. [Online]
Available at: http://elections.oii.ox.ac.uk/could-social-media-forecast-political-movements/
[Accessed 10 05 2015].

Drummond, G., Ensor, J. & Ashford, R., 2008. Strategic Marketing: Planning and Control. 3rd ed. Burlington, MA, USA: Elsevier.

Porter, M. E., 1980. Competitive Strategy. New York: Free Press.

Commercial Aspects - Blog 1

Having studied marketing briefly as part of my undergraduate degree in Mechanical Engineering, I had an overview of market research, with most of the emphasis being placed on consumer segmentation by demographics and competitor analysis.  Studying an arts-based design course, a large amount of emphasis is placed on the conceptual meaning behind a product; the emotions they awaken in us and the relationships we build we the products that we love.  My perception of marketing however, was a much more pragmatic one; marketing has the sole purpose of selling a product or service, occasionally at the detriment to the ethos of the product.  Marketing can also be held responsible for generating market-led designs, which may be seen as the throw-away products that worsen consumerist problems that the western world now suffers from.

One of the most remarkable elements of studying this module has been witnessing the ingenuity behind successful product marketing.  The ability to identify weaknesses within the business itself and address them thoroughly to turn them in to opportunities is fascinating.  Though I had come across many of the basic analytic tools before (PESTE, SWOT, perceptual mapping etc), the thought process behind connecting the market research to outline a cohesive strategy was a very valuable process to learn.

 ‘Marketing defines how the organisation interacts with its market place,’ (Drummond, et al., 2008, p. 10).  This interaction generally takes one of three forms; customer orientation, competitor orientation and, inter-functional orientation (Narver & Slater, 1990), with a combination of all three achieving a long-term profit focus.  Fast moving consumer goods (FMCG) companies, such as toothpaste brand Colgate, are competitor oriented – competing for the lowest price to attract habitual buyers – while companies such as John Lewis rely heavily on retaining customers through a good reputation and so are customer orientated.  Marketing and design innovators, companies such as Apple who dictate the new trends to the customer, tend to utilise inter-functional orientation, where they are aware of market intelligence and can adapt accordingly.

With the rise in use of social media, consumers are now able to contact company representatives directly instantly and, in many cases, at any time of day.  This has meant that many companies have adapted to put more emphasis on customer needs through customer service, and have had to stay constantly aware of what consumers are saying publicly about their brand online.  As such, many choose to employ social media specialist teams within their PR teams, to deal with issues as they arise (Marsden, 2015).

The New Product Development (NPD) strategy can be directly affected by the marketing concept, though these products tend to be additions to existing product lines, or product revisions, as opposed to innovative products.  The NPD strategy usually takes the form of a traditional ‘brainstorming’ process, but with greater emphasis on business evaluation.  Market trends also play a large role in NPD, often forming the starting point of the strategy, targeting an identified ‘gap in the market’. 

References

Drummond, G., Ensor, J. & Ashford, R., 2008. Strategic Marketing: Planning and Control. 3rd ed. Burlington(MA): Elsevier.

Marsden, R., 2015. The Independant - Customer service in the social media age: How companies deal with the daily twitter storm. [Online]
Available at: http://www.independent.co.uk/life-style/gadgets-and-tech/features/customer-service-in-the-social-media-age-how-companies-deal-with-the-daily-twitter-storm-10085307.html
[Accessed 17 04 2015].

Narver, J. & Slater, S., 1990. The effect of a market orientation on business profitability. Journal of Marketing, Volume October, pp. 20-35.