Thursday, September 27, 2012

The Value of Design: Key to product success

What's the first thing a customer sees in a product? What creates the first impression in the customer mind? What influences the final buying decision?

The answer to these questions is Product Design.

To illustrate this point, consider two cell phones in 2008: Blackberry and Google Nexus. Both the phones had same functionality. Users can do all the functions on both the phones, but the customers just flocked to Nexus. Even today, Blackberry phones can do pretty much everything an iPhone can do, but customers still prefer the "touch" phones over the full keyboard phones. There are innumerable examples of how companies used product design & user experience to win in the market place.

As a product manager, let me explain what are the aspects of product design, which when done right leads to a winning product.

A new product must create a positive response at the first interaction with the product. This can be achieved with product design. In the world of physical products this is called as "Industrial Design" and "User Interactions", in the world of software, it is called as "User Experience (UX)"

Product design plays a major part on customers' buying decision, therefore it important to know various aspects of design that must be considered during the product development stage.

As a product manager, let me explain what are the aspects of product design, which when done right leads to a winning product. During the design stage, there are two major aspects of design: Features of Design & Value of Design.

Features of Design:

Features of a Design essentially creates the necessary conditions of the product and product development. There are five aspects to this:

1. Feasibility.
2. Utility
3. Desirability
4. Usability
5. Affordability

Feasibility is essentially the limiting factors - i.e, defining the boundary within which the product must be designed. It is important to identify the boundary or the limiting conditions  which the design teams have to operate. The five common areas of feasibility are:

1. Technical Feasibility: Establishes the technical limitations.
2. Economic Feasibility: Establishes the cost limitations
3. Legal Feasibility: Establishes the legal limitations, including Intellectual property rights
4. Operational Feasibility: Establishes how well the product works or solves the problem.
5. Schedule Feasibility: Establishes the timelines within which the product must be developed

Utility is usually a product requirement and it sets the base line for the product in terms how well the product should perform, and what activities/jobs/uses the product must do. For example, A Swiss Knife as mulit-utility device - because it performs many functions.

Desirability is a psychological factor which drives human behavior. In product design, desirability is the ability to make customer buy the product. There are several psychological factors that drive desirability - depending on the market demographics. I.e, each market segment has a different  psychological factors that drive desirability. Understanding this correctly and delivering it will make customers say "Wow!" by just looking at the product.

Usability defines how usable the product is. Usability is all about getting the right user experience. Usability of a product has to be developed from the customer perspective. One needs to understand how customers use the product and then look at various means/options to enhance that.

Affordability helps define the selling price. Affordability is a measure of how many customers are willing to pay what price for the product. A highly priced product will have less number of possible customers, i.e., low affordability; while a low priced product will have large number of possible customers. So for a given product and market segment, the affordability for products changes.

Value of Design

Product has value only when buyer sees an advantage in using the product. For example Vertu makes designer cell phones which has an exclusive set of customers. The cell phone from a functionality point of view is same as a Nokia phone, but it is design that sets Vertu apart.

The Value of design is seen when it:

Changes the purchase criteria: Make people choose the product based on user experience over product functionality. iPhone & Vertu is a classic example of this. Mac Book Air is also a good example where product design (form factor) changed customers' buying decision.

Enforces Brand Experience: Every brand is a promise. The product design must deliver on that promise, which create experiences during interactions with handling the product for the first time. For example, Bose sound systems must deliver on the brand of offering superior audio quality.

Segments the market: Product design by itself can create a new segment in the market. For example, Vertu created an upmarket, designer cell phone market segment. Bose created elegant and high-end audio system market. Sony PlayStation created a new segment in video gaming market.

Designers can created value to products by:
1. Enhancing price/performance: Create products that shatter all the established Price and performance expectations of customers.

2. Adding soft values such as: Convenience, Ease of service, rewarding customer loyalty, Product Customization, Life-style enhancers etc. Soft values are often not the attributes of the product itself, but it more about the product eco-system. For example iPad leveraged the existing Apps ecosystem of distribution, ease of usability, customer loyalty etc.

Product Design & Profitability

Product has also be designed for profitability. Once the product's economic feasibility and affordability is defined, the product must be designed to meet the internal profit margin requirements.

A number of design approaches can be used to lower product costs, including:

1. Intelligent specifications which cost less
2. Design-driven cost reductions;
3. Increased commonality and design reuse;
4. Product architecture planning;

In order to make objective trade-offs between cost and value, a means to quantify the impact of design choices on customer value is needed. Established methodologies like QFD, Conjoint Analyses, and Pugh Matrices make it possible to provide the objective linkages between design and value.

In most cases, product design choices is cost-engineered bottom-up, the cost of the finished product and then analyzed for the expected impact on customer value. Ideally, one should start with the product value point and then engineer the product for costs. When products are designed for value, then  it is possible to take better decisions regarding specific design choices.

The Design Team

It takes several teams to build products. Important among them are:

Design: Whose job is to make Products Useful & Desirable
Engineering: Whose job is to make products Possible & Affordable
Marketing: Whose job is to make products Saleable & Distributable

When all the three teams work together for a common purpose, then there will  be successful products.

Closing Thoughts

Product design is not just a one-off effort, but it is an ongoing, systematic approach to improving the product value and profits. As products evolve, the design boundaries are continuously tested and the product value proposition must be constantly improved, design improvements are done for improving profits.

No comments: