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issue: April 2003 APPLIANCE Magazine

Consumer Electronics
Relevance: The Key to Consumer Electronics Brand Survival


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by Dan Ashcraft, Creative Director and Principalle, Ashcraft Design

For years, technology reigned supreme in consumer electronics. Brands successfully wooed customers with new technical developments and ever-increasing advances in performance.

In the audio world, for example, the introduction of CD, DVD, increased power handling, lower distortion, and a variety of surround sound technologies drove sales and margins. And yet, in this race to give customers the newest, the best, the most advanced products, little thought or concern was given to whether the technology was relevant to their lives.

Consumers soon found themselves making significant changes to their living spaces just to accommodate the racks of equipment they had purchased. They invested countless hours studying owner's manuals in an effort to install and operate the increasingly complex technology in their homes. The situation reached the point where an entire industry developed around the engineering and installation of home entertainment and information systems. It was an expensive, time-consuming solution and for most people, it wasn't an option.

The Race to Parity

Meanwhile, engineering continued to do an outstanding job delivering more at a lower price point. Elaborate home theater systems, once reserved for those who could afford to pay tens of thousands of dollars, could be purchased several years later for a few thousand (in some cases, even a few hundred) dollars.

As consumer electronics companies raced to deliver exotic performance specifications, they also got closer and closer to parity. Suddenly, the achievements in technology that once drove brand loyalty and passion became less apparent to consumers. People could no longer appreciate the subtle differences in performance and engineering that used to define the heart and soul of a brand. So, they focused instead on price. The more brand image deteriorated, the more profit margins eroded.



Product creation.



What many consumer electronics companies lost sight of was this: For a majority of consumers, what makes a product relevant is not simply technology, but rather how the product delivers the entertainment experience.

Performance parity has created a new challenge for brands. They're being forced to think beyond technology and to address the issues that are relevant to customers, like quality of life, pride of ownership, and the overall entertainment experience. A good example is the DVD receiver an entirely new category of device that many companies have developed over the past 2 years.

The DVD receiver is a home theater solution incorporating an audio video receiver, AM and FM tuners, CD player with digital amplifiers, and DVD player, all in one box. For consumers frustrated with the complexity of traditional, multi-box home theater solutions, the DVD player is a natural choice. It fits easily into their lifestyle and enhances, rather than takes away from their entertainment experience.

Sales figures seem to bear this out. According to the research firm NPDTechworld, the DVD receiver is the hottest seller in the market. In the first 8 months of 2002 unit sales of home theater audio systems, two-thirds of which contain DVD players reached 851,000, an increase of 52 percent from a year earlier.

The fact is, the economic survival of consumer electronics brands will depend on understanding and delivering products that are relevant to consumers' lives and to the way they experience entertainment. The importance of this idea is apparent in remarks made at CES 2003 by Kunitake Ando, president and COO of Tokyo, Japan-based Sony. He said, "...we're creating devices that tailor themselves to your specific tastes, and are easy to use....so that you, the user, will really be the star. At Sony, everything we do is based on our desire to enrich people's lives."



Infinity Modulus Wall Mount Speaker.
 

New Tools for New Ideas

Today, brand relevance is built on delivering a product that goes beyond performance. It's a product that heightens the entertainment experience by improving the customer's quality of life.

Unfortunately, the tools that drove traditional technology-based product development will never achieve this. Even the best managers in successful companies will find that much of what they've learned over the years is ineffective when it comes to creating relevance. Bob Schmetterer, president and CEO of Euro RSCG Worldwide, an advertising agency and communications company explains, "Most marketers have been schooled extensively, both at universities and on the job, in the important art of listening to the customer. Very few though have the theoretical or the practical training to help them discover new product opportunities that consumers may not even be able to articulate."

How do you deliver the right product for a market that does not yet exist? Development teams will need to fundamentally change the way they conceive new ideas. A new set of product development tools is essential. The most critical of these is a practice known as Product Creation.

Discovering Relevance Through "Product Creation"

Why do some products capture the hearts of consumers? How do they create loyalty for the brand and dominate the market? It doesn't happen by chance, but as a result of a disciplined process that defines a new role for the industrial designer.

Product Creation provides industrial designers with methodologies and analysis tools to chart the unmet - and unspoken - needs of the consumer. It's an approach, which may encompass marketing, sales, engineering, manufacturing, and purchasing, as well as design. Each discipline lends a different perspective, asking new questions, uncovering new insights, and helping to complete a truer picture of the brand.

The consumer intelligence gathered during this discovery process often reveals unforeseen and surprising opportunities. The designer can then translate this data into consumer electronics that don't exist solely to deliver technology, but instead grow directly from understanding how customers interact with the product on an emotional level.

Like the DVD receiver, technology is reconfigured into a product that is relevant to the consumer.

Infinity Loudspeakers: A Product Creation Story

Once revered by audiophiles, Infinity-brand speakers had lost much of their high-end status over the past few years. Overcapacity, fierce price competition, powerful consumer electronics retailers, a market glutted with similar products - these factors drove Infinity to produce speakers that didn't live up to the high expectations of its customers. The company was soon competing in a downward spiral of lower prices and smaller margins.

To resolve the problem, Infinity realized the only way to revitalize the brand was to create the most distinctive and relevant products in their category.

The effort required a carefully crafted brand strategy, which was developed by gathering key consumer insights. To quote Mr. Schmetterer again, "...the knowledge of what will work, resides somewhere in the consumer experience."

Infinity assembled a multidisciplinary team, which included representatives from nearly every department in the company. Their job was to capture the product attributes that connected with people on an emotional level. For Infinity, this meant understanding everything from the retail purchasing experience to the living room audio/video experience.

The research provided Infinity with a strategic roadmap to understand how the consumers' entertainment experience influenced the design of their products. It revealed that such features as the loudspeaker's architectural configuration, placement versatility, materials, colors, and finishes had a huge impact on the perception of audio quality.

The subsequent launch of the Prelude, Intermezzo, and Modulus product lines redefined the brand and reestablished Infinity's position as one of America's preeminent loudspeaker companies in its category. Not only was Infinity able to win back audio enthusiasts and high-end audio dealers, but it also increased the value of the brand.

For Infinity, development of these products brought more than just increased profits. The research tools and design methodologies that were introduced not only helped the company redefine the Infinity brand, but also helped create a new product development process, one which will spawn the innovations that will ensure the brand's future financial success.

The Critical Role of Industrial Design

For consumer electronics brands to survive, a new generation of products is needed. The product discovery tools of the industrial designer will play a key role.

They will provide companies with a steady stream of innovative and relevant merchandise. Products that delight customers, define brands, and propel companies into market leadership, driving corporate growth, and shareholder value.

The brands that command their categories will be those that spend an increased portion of their R&D budget on research geared to discovering the customer values that influence the design of the product. Their economic investment in the future will not grow out of the customer's investment in understanding technology, but rather the brand's investment in understanding the customer.

References

1. Kunitake Ando, president and COO, Sony Corporation. "Shaping a World About 'U' For the Broadband Frontier." Excerpted Remarks, Consumer Electronics Show, Las Vegas, NV, U.S. - Jan. 9, 2003

2. Bob Schmetterer, president & CEO, Euro RSCG Worldwide. "Leap-A Revolution in Creative Business Strategy," Wiley & Sons, Inc. Hoboken, NJ, U.S. 2003.


About the Author

Daniel Ashcraft's experience spans more than 2 decades as a product design consultant. He formed his own company 15 years ago to address the need in corporations for more powerful expressions of their product brands. He has created products for many companies, including Gibson, Nike, Xerox, JBL, Harman/Kardon, Infinity, IOMEGA, Cybex, NordicTrack, and Polaris. He has been recognized for his contribution to product development by several organizations including the Industrial Design Excellence Awards, ID Magazine, Design Zentrum, Communication Arts, and Art Directors Club of New York. He has also written articles on the business value of experiential design for the Design Management Journal and Innovations Magazine. He has lectured at UCLA's Anderson Graduate School of Business and was an instructor of advanced product design at the Art Center College of Design in Pasadena, CA, U.S. where he received the Great Teacher Certificate. He earned a B.S. in Industrial Design with "Great Distinction" from the Art Center College of Design, and is a member of the Industrial Designers Society of America.

 

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