Topic 2 Meeting customer needs

Aims for today To appreciate the role and importance of design in differentiation. To understand how scientific principles can be applied to research to help in the development of new products.

Design & differentiation: Some examples Sony Cyber Shot TX7 camera PlayStation Move Versus X Box Kinect Apple Ipad

Design & product differentiation Design is a significant factor in differentiating products from competitors. Dyson Hoover (first sold in Japan) was pink & soon became a cult item despite being expensive. Task In pairs identify and explain three examples of products that are differentiated by design. Differentiation Branding Packaging Market mapping Premium pricing Perception Brand loyalty

Examples of products differentiated by design

The Design Mix has: 3 variables. The range of variables that contribute to successful design Function Appearance Cost Differentiation Branding Packaging Market mapping Premium pricing Perception Brand loyalty

1. Function: How the product works Are the component parts study to withstand bumps & bashes? How effective is the cyclone? Does it do what it supposed to do? Is it manoeuvrable? Is the cylinder easy to empty?

2. Cost The cheaper the cost to design & produce and item, the better. If businesses have lower production costs than their competitors, they will have a competitive advantage. Do you think Dyson had lower production costs than its competitors?

3. Appearance/aesthetics Vestalife Firefly iPod dock and speakers

Task 2: Design Mix Create a design mix for an existing new or innovative product. Function Appearance Cost

Scientific research Most new products today require scientific research. Using scientific research companies can devise more economical, efficient ways of doing things. E.g car production. The Dyson Hoover was developed using SR and the company spends a lot of money on R&D to develop prototypes. Differentiation Branding Packaging Market mapping Premium pricing Perception Brand loyalty

Research & development (R&D)

Now a quick test… p40 1. A manufacturer of freezers designs its latest model with more insulation than other freezers on the market. This results in it being the most energy efficient freezer sold. This is an example of: A appearance as part of the design mix B product trial C product differentiation D repeat purchase Answer C Differentiation Branding Packaging Market mapping Premium pricing Perception Brand loyalty Comments A Incorrect – appearance is about the looks and style of a product not its function, i.e. being highly efficient. B Incorrect – a product trial is where the consumer samples the product for the first time. C Correct – the increased insulation and energy efficiency is something that makes the freezer stand out and makes it different from the competition. D Incorrect – a repeat purchase is where a consumer returns to buy a product on a regular basis.

Question 2 2. Function in the design mix is about how A good a product looks B much it costs to produce C good is the brand image of the product D well a product works Answer D Comments A Incorrect – looks and style are associated with the appearance of a product. B Incorrect – the function of a product may add or subtract costs but is not directly about the costs of production. C Incorrect – the brand image comes from many different areas and not just function but also design, looks and reputation. D Correct – the function is associated with the performance of a product and how well it works.

Question 3 3. A car manufacturing company has a large R&D department. R&D stands for A research and development B research and discovery C resources and development D resources and discovery Answer A Comments A Correct – it is associated with the research into and the development of new products or services. B Incorrect – discovery is often by accident or as result of careful research and development. C Incorrect – resources are the things needed to run a successful business, such as raw materials, capital and staff. D Incorrect – the resources and discovery are separate, individual areas of business.

Over to You: London Buses p41 Complete the case study 20 mins Differentiation Branding Packaging Market mapping Premium pricing Perception Brand loyalty

Plenary: Explain the keywords Design Mix Differentiation USP Scientific research R&D Aesthetics Differentiation Branding Packaging Market mapping Premium pricing Perception Brand loyalty