Date: November 30, 2005
For: Prof. Zwick
The following study discusses design as a competitive advantage in technology-related
products. More specifically, we will explore where in the life cycle of the product (or category
or model) innovations in design and “form” potentially overtakes core functionality in consumer-
focused technology products, and how this impacts marketing strategies.
The first section of the paper (Form for Existing Function) analyzes the elements of form
and function in the iPod and hybrid cars. Both are examples of “break through” technology,
positioned as an improved product within the existing category.
In contrast, Form for New Function looks at the market created by the Blackberry device.
We also look specifically at the development of mobile communication devices (which have
reclaimed “push e-mail” functionality with smart phones) within the context of the “Attention
Economy”1. The mobile telephone market in China offers an example of the maturing and
crowding of this product category, and we present the form and function responses in the section
More Form, More Function.
As a conclusion, we offer Key Implications to Marketing Strategies for consumer-focused
technology products in the final section of the paper, and compare these to existing research in
A. FORM FOR EXISTING FUNCTION
This section of the paper analyzes the elements of form and function in relation to iPods
and hybrid cars. While both product innovations are relatively new to the market space the
successes of each are not congruent. This portion of the paper examines where the main
differences lie and infers conclusions from these variations.
Since its debut in 2001, the iPod has grown from an advanced music player to a cultural
status symbol. The iPod is a brand of portable and digital audio/video players that are designed
and marketed by Apple Computer. Most iPod models store media on a built in hard drive,
however the iPod Shuffle and iPod Nano utilize flash memory2.
When Apple first entered the digital music player industry, a market for MP3 players had
already been created by RIO with a release three years earlier in 1998. At this time digital music
players came in two types: (1) small with limited storage (using flash memory), or (2) bulky hard
drives with more storage and impenetrable controls.3 When Apple entered the scene in 2001, it
was determined to create a device that was powerful and easy to use. Moreover however, the
product would be highly design intensive utilizing Apple’s core competency by creating a
product with incandescent style.4 Apparently Apple has succeeded as over 3 million iPods have
been sold in total and this number continues to grow rapidly.
When the iPod was launched in 2001, the marketing department must have been
struggling with the issue of how to position the product. Despite the new technology, Apple
chose not to feature the innovation in the core value proposition that Apple. By positioning on
the basis of new technology, Apple would have needed to create a new category. Obviously, the
process of growing a category is long and strenuous, as Geoffrey Moore has depicts in Crossing
the Chasm. Instead, Apple chose to position the iPod as simply “a better walkman.” This
strategy had allowed iPod to exploit the growing consumer confidence in the product category.
As a result, Apple was able to directly penetrate the mainstream market and adoption occurred
rather quickly. Now it appears that the iPod actually defines the category of personal music
Current Product Position
From a form/factor perspective, the iPod remains at the top of the pile. Apple recognized
that great design and easy functionality are becoming more and more critical in delivering
consumer technology products to market.5 Years ago this was not the case; design was not
nearly as important. While the Sony Walkman has sold over 300 million units, it is commonly
recognized as a horrible design and a terrible interface.6 While it is apparent that Sony had
focused on several different lifestyles (consumer segments) including: skiing, jogging, or
camping, they neglected to standardize a stylish design.7 In retrospect, we suspect the product
design was engineering-centric, focussing on technology and not on the customer. When the
Sony product debuted as new to market—when the concept of portable music was new—this
function was the key driver for success. Now however, as the personal music player category
has matured, form is beginning to take precedence over function. This is not to say that iPod
isn’t functionally sound, on the contrary, the iPod operates quite smoothly and can hold up to
10,000 songs. However, the emphasis is not on the technology, but more so, on the ownership
The rounded corners, the slim profile, the bright colours, and the toggle wheel have
allowed iPod stand out from competitors in a crowded marketplace. Targeted towards several
tech-savvy segments, the iPod has become “the new walkman.” In fact, iPod has become so
popular it has captured 75% of the mobile music player market and iTunes now accounts for
84% of legal downloaded music sales.8 As mentioned the real lure of the iPod is not the access
to an entire music collection, but more so, access to an exclusive community of fellow iPod
users. The iPod culture has proliferated the mainstream.
From a network ecology perspective, Apple has been quite successful in creating an iPod
community. iPod users have an immediate common bond. Users share stories and discuss their
music preferences. Fan sites abound the Internet and users are posting recommendations and
ideas for iPod innovations and accessories. There is a sense of co-creation in the fact iPod’s can
be customized to a particular taste via the accessories offered. This brings us to the compliments
network. Apple and other manufacturers have been extremely triumphant in the establishment of
a very deep compliments network. These include such physical things as charging stations,
protective casings, and belt clips, to the more intangible iTunes software package. As witnessed,
the iPod compliment products have a similar emphasis on the stylish form factor. These vast
compliments allow for continued user loyalty. Apple success is apparent, as they are the only
producer of this new product category (with the exception of the newly branded HP iPods).
Therefore, they control all of the distribution channels. This exclusivity is another factor in
iPod’s success. Also the success of the iPod may have been caused by the shortened product
lifecycle of the personal music player.
With the debut of the iPod Nano, it is quite apparent that form is continuing to take
precedent over function from a marketing perspective. While the true innovation behind
introduction of the Nano (flash memory) was indeed functional, the product is primarily
positioned on its new and slimmer design (thinner than a pencil). Accordingly, proper
positioning will prove to be essential for growth within this category.
In conclusion, the community effect along with its aesthetically pleasing appearance and
simple functionality has made iPod one of the most successful products of the 21st century. In
the case of iPod, we can further conclude that as the digital music player product category has
matured, form has begun to take precedence over function as the key driver for success.
II. HYBRID CAR
The hybrid car has recently created the latest buzz in Hollywood as many celebrities
including Brad Pitt, Leonardo DiCaprio and Cameron Diaz are trading in their gas-guzzlers for
the environmentally friendly hybrid car. The hybrid car is an automobile that uses a combination
of at least two different fuel sources for its propulsion, e.g. gasoline and electricity. This section
of the paper will use the Toyota Prius to illustrate the evolution of the hybrid car in the North
As a full hybrid, the Toyota Prius can run on solely the engine alone, the batteries alone,
or a combination of both. Typically, the gasoline engine handles routine high-speed travel and
the electronic engines handle the everyday stop-and-go street traffic situations.
The hybrid car is an old concept that can be traced back to 1665, when astronomer
Ferdinand Verbiest created plans for a miniature four-wheel unmanned steam “car” for Chinese
Emperor Khang His.10 The first electric-powered taxicab was launched in England in 1886; the
car used a battery with 28 cells and a small electric motor.11 It was not, however, until the early
1990’s that car manufacturers began to invest heavily in research and development of hybrid
vehicles. In 1997, Toyota launched the world’s first mass-produced hybrid car in Japan, the
Toyota Prius.12 An international launch followed in 2000. This car was functionally designed to
enable consumers to experience an increase in a vehicle's fuel mileage and low emissions
through energy optimization management, torque on demand control, and regenerative brake
Originally, the hybrid car was positioned as an environmentally friendly and fuel-
efficient car, within the existing automobile product category. Toyota’s market positioning was
appealing to a niche market of environmentalists; however this positioning was not successful in
reaching the mass market of consumers. Generally, “hybrid drivers tend to be environmentalists,
free-thinkers who resist the over-commercialized aspect of American society.”14
Current Product Position
After eight years in the market, the hybrid is still in the infancy stage. The product has
yet to achieve mass-market adoption. Currently, hybrids account for less than 1% of total
vehicle sales.15 The cars have proven to have comparable performance vs. traditional cars (see
table below for comparison) and achieve as much as 100% more fuel efficiency. How on earth
can such an innovative product not yet be a market success?
Manufacture Toyota Honda Honda
Model Prius Sedan Civic Sedan Accord Sedan
Type Full Hybrid Traditional Traditional
Invoice Price 19,222 19,109 18,130
Engines & Power
Engine 1.5L 76 hp 14 1.7L 100 hp I4 2.4L 166 hp 14
Horsepower 76 @ 5000 RPM 100 @ 6100 RPM 166 @ 5800 RPM
Torqe 82 @ 4200 RPM 98 @ 4000 RPM 160 @ 4000 RPM
City (mpg) 59 30 25
Highway 51 34 34
There are many factors which are inhibiting the mass market success of the hybrid car,
the primary factors include, i) perceived value of car, ii) car design and iii) limited network
The Toyota Prius enables consumers to achieve high performance without sacrificing fuel
economy, but at a higher initial cost. The Prius hybrid models carry a price premium of between
$4815 and $5250 (US) over standard gasoline cars (i.e., Echo or Corolla).16 The price
differential becomes larger as the power of the electric drive components is increased. Although
the initial price is higher than that of a traditional car, Toyota was anticipating that consumers
would be willing to pay a premium and then recoup the incremental costs through gas savings
over the lifetime of the car. However, consumer research illustrates that consumers do not utilize
payback periods or discount rates in making purchasing decisions. Consumer researchers have
argued that such calculations are beyond most consumer decision capabilities and do not fit with
cultural models of behaviour.17 As a result, consumers who are concerned with fuel economy are
turning to cheaper alternative technologies available including, clean diesel, turbo charging and
six-speed transmissions, all which give fuel economy benefits at a lower initial cost than hybrids.
The design of the hybrid car has been criticized for lacking design differentiation vs.
traditional cars. In North America, cars are considered to be a “status symbol” and consumers do
not want to pay a premium for a vehicle that does not enhance their image. Moreover, despite
increased gas prices, 56% of Americans refuse to downsize their premium sport utility vehicles.18
Hybrid car manufacturers are slowly discovering that the design of the car is critical. The most
successful hybrid model to date, the 2004 Toyota Prius, has allowed owners to differentiate
themselves through a futuristic design.19 “‘The Prius is a fashion statement,’ said Art Spinella, a
consultant with CNW Marketing Research, who surveys car-buying trends. ‘It looks different.
The Prius has set itself apart with a geek-chic look -- a thick, curved body, a high back end and
glittering computer displays on the dashboard. People recognize that the driver is driving a
hybrid vehicle. It clearly makes a bigger statement about the person than other hybrid
designs.’”20 This appealing design has created such a strong demand for the Prius that there is
now a six-month waiting list.
So while manufacturers are starting to realize that form / factor is an important
differentiator, there are still other concerns that have inhibited growth potential. There has been
limited success in creating a flourishing hybrid user community; as a result, this has lead to high
consumer uncertainty. Many consumers are not confident in making a large financial investment
in a hybrid vehicle because there are many uncertainties associated with the new technology.
These uncertainties include: long term cost of operation, reliability, resale value, durability, as
well as the associated complementary networks (i.e.: maintenance / repair).21 Through strong
consumer networks, potential customers would have the ability to alleviate some concerns
through learning about the experiences of others. The technology perception is at the product
level now. Car manufactures must remove consumer concerns before the technology will be
able to reach the process level. Also the product lifecycle for the automobile is extremely long
and slow to change. This has resulted in function taking primary precedent over form. As the
product continues to advance through the lifecycle however form will begin to supersede
Many manufacturers are starting to introduce consumers to the next generation of larger
and “more mainstream hybrids [that] emphasize luxury, high-tech wizardry, and/or power—
rather than environmental benefits”—as a result the demographic profile of a hybrid driver will
shift into the mass market.22
The hybrids inability to move beyond the initial niche environmentally friendly cars has
been a key inhibitor to the success of the product. As a result of its niche positioning, the car has
been unable to penetrate the mass market. However, manufactures are recognizing these trends
and the current (e.g. 2006) generation of hybrid vehicles are moving towards more mainstream
needs by putting an emphasis on design.
III. Key Findings - Form for Existing Function:
In comparing the launch of the successful Apple iPod vs. the Toyota Hybrid, there are several
key learning’s including:
• Development of user network and complements network is critical to achieve strong
consumer buying confidence.
• Targeting one specific niche market vs. mass market will significantly impact the time to
reach the mass market.
• Focusing on functionality as well as form is a key success factor for penetrating the mass
• The length of the product lifecycle is strongly correlated to when form surpasses
functionality as a key differentiating feature.
B. FORM FOR NEW FUNCTION: THE BLACKBERRY
The Blackberry has become a symbol of the mobile executive and has enjoyed
promotional activity from celebrities23, including Jack Welch and Oprah Winfrey. Blackberry
created and continues to dominate the category of the converged mobile device that brings e-mail
and voice together in a mobile handset. First launched in 1999 as a “push” e-mail solution, the
Blackberry line of products has evolved to include voice capability since 2002.
Initially targeted to business people as a tool for corporate productivity, Blackberry is
widely available to consumers through wireless carriers in Canada, the United States and
throughout the world. This is the result of Research in Motion’s (RIM) strategic decision to
work with wireless carriers24.
The precursor to what became the Blackberry line of products was in August 1998, when
RIM released the Inter@ctive Pager with full keyboard25. On January 19, 1999, RIM released
media material launching the “Blackberry” solution, purported to be: “the first complete, secure,
integrated, wireless email solution for the mobile professional26.” The media and promotional
material at the time describe the functionality in depth, highlighting (1) the ability to keep one e-
mail address; (2) Always On, Always Connected™ function, (3) security features, and (4)
optional corporate support.
The initial marketing focus was to Wall Street professionals who RIM’s VP of Corporate
Marketing, Mark Guibert, describes as “heavily communications focused, [and] heavily
customer focused.” This would enable the audience to adopt the technology—based on the
functionality—without the Blackberry being proven in other segments.27
Industry: Voice and e-mail devices (1998-1999)
Home/office based Mobile
VOICE Telephone Mobile phone
E-MAIL Desktop/laptop Blackberry*
*Research in Motion created this category with the Inter@ct/ Blackberry.
Current Product Position:
The Blackberry redefined mobile communications and created new product categories
based on functionality that was previously unavailable. From 2002 to 2005 the Blackberry
operated alone in a niche market without any major competitors (although there continued to be
a large number of substitute products).
During this time, Blackberry had created quite a strong user network that gave customers
a brief sense of community. Blackberry was an elite product to the more affluent and successful
business person. At the time, RIM was able to be an exclusive compliment in terms of service
provider and producer of the product. Based on network ecology this aided in the Blackberry’s
Industry: Voice and e-mail devices (2002)
Home/office based Mobile
VOICE Telephone Mobile phone
VOICE and EMAIL Microsoft Exchange Blackberry*
*Blackberry created this category with the Blackberry 5810
In 2003, the first Blackberry with a colour display appeared on the market, which was the
first significant product improvement not directly related to the core functionality of receiving
information in real time. The 2004 product launches includes the first Blackberry that looks like
a telephone (T-mobile); in response to new entrants into the category, in the form of
smartphones. As the category has evolved, RIM has realized that a phone like design is
becoming a necessary point of parity.
Today the category is filled with numerous competitors, and RIM is losing ground to
smartphones and, in the corporate hybrid PDA space, to Palm and Dell28. Differentiation is
largely based on non-core functions and design, as is evident in the following product analysis.
Communication Other Compatibility Competitive
functions functions positioning
HP IPAC Voice and e-mail Colour Cingular Wireless Right size to use
hw6515 screen; Network; MS
Camera, GPS Office Mobile 3
Motorola Q Voice and e-mail Colour Cellular network; Slimmest (Razr
screen, MS Window’s cell phone)
thumb wheel, Mobile 5
Nokia E61 Voice and e-mail Push-to-talk, Wifi, VoIP and Roams like a
(expected in global roaming, cellphone
2006) Blackberry e-mail,
Blackberry Voice and e-mail 20-key Blackberry A phone-like
7100 keyboard, software; works Blackberry
Sure type “virtually anywhere
in the world”
Dell Axim e-mail only Advanced Wifi, MS Mobile 5 Cheaper (with no
X51v gaming voice function)
While the Blackberry was first to market in the “push button email solution” product
category, their first mover advantage has been all but lost. Non-traditional competitors such as
cell phone and consumer electronic manufacturers have been rapidly entering the market and
differentiating their products based upon form. While offering similar functionality to that of the
Blackberry, competition appears to be much more design focused and therefore attempting to
capture more of the mainstream market.
Key Findings - Form for New Function:
• Initially when launching a new product category, the marketing focus is on the education
of the consumer on the core functions that the new product provides.
• Once the product reaches the mass market and the industry becomes saturated with
competition, manufactures focus on product differentiation.
• The differentiation is based on both functionality and design features, but design
continues to become more important as the product moves through the lifecycle.
C. MORE FORM, MORE FUNCTION: MOBILE PHONES IN CHINA
“Mobile phones are changing us and the world we live in. Over the last decade, mobile
phones have massively changed our culture, society and communication patterns.”29 A mobile
phone is an electronic telecommunications device with the same capability as a traditional fixed
line telephone. However, the mobile phone is portable and connects to the phone network using
radio wave transmission technology.30 This section of the paper will use the Chinese market to
illustrate the advancements of the mobile phone. The market in China is the largest in the world.
Currently over 300 million Chinese own a mobile phone and over 6 million new contracts are
taken out every month.
The history of mobile phones can be traced back to the 1950s with the introduction of the
radiophone. Motorola launched the first mass marketed mobile phone into the China market in
1987. 31 The initial phone was a large handset that weighed approximately a half a pound. This
cell phone was initially targeted to business users who required a convenient means of voice
communication.32 Within the past 20 years however, the mobile phone market in China has
evolved with increased functionality and changing form factors. They have shifted from being
rare and expensive pieces of equipment used by businesses to a pervasive low-cost personal item
purchased by the masses.
A strong user network has evolved through increased mobile functionality and high levels
of user penetration. For example, the emergence of the first Chinese input (SMS) mobile phone
(CD928+) captured over 2 million users.33 This creation allowed network users to interact with
one another through text messaging and created a mobile community. Many users increasingly
rely on their mobile phone to keep in touch with their friends via text messaging, photo sharing,
instant messaging, etc.
The Chinese market has not only experienced rapidly changing functionality, but also,
changing form. In 2002, when Motorola launched its first 360-degree swivel phone in China, the
Motorola V70, the primary focus of the phone moved from functionality to form.34 The
fashionable design made it very attractive to the young generation. Additionally, many
manufacturers have been successful in establishing an extensive compliments network. These
include such physical things as belt clips, protective casings, headsets and decorative jewels.
“The mobile phone itself has also become a fashion object, with users decorating, customizing,
and accessorizing their mobile phones to reflect their personality.”35 This co-creation has
enabled consumers to customize their phones in order to differentiate themselves from the mass
Current Product Position
Currently, the multimedia cell phone is a mainstream product in the Chinese cell phone
market. Mobile phone manufacturers are faced with increasing competitive rivalry as well as
shortening model life cycles.36 As a result, manufacturers are constantly seeking new functions
and features to satisfy rapidly changing customer needs and increase their market shares. Nokia
has tried to increase market share by quickly bringing new products onto the market. The
company launched 40 new products during 2003, including 31 handsets with colour screens and
14 with cameras.37 Not only are more Chinese consumers purchasing the phones, but also
current users are constantly upgrading as new phones with new features are introduced into the
market. Consequently, this has significantly reduced the model life cycle and increased research
& development and marketing expenses.38
In the context of a rapid growth of multimedia cell phones, the upgrade of functionality
has become the major growth driver. According to the consumer behaviour analysis of 2004 and
2005, price and functionality are still the major factors consumer consider when buying mobile
phones. Almost 68% of consumers thought that functionality and price are very important, 55%
consumer will consider brand name when they buy the mobile phone; only 44% consider that the
appearance is very important.39
Factors Consumers Consider when
Purchasing a Cell Phone
80% 67% 68%
See table below for growth rates driven by functionality in 2005:
Functionality Number of Units Sold 2005 Growth Rate (2005 vs. 2004)
Colour Screen Phone 19,335,000 35%
Camera Enabled Phone 13,191,000 106.6%
MP3 Phone 4,998,000 392.0%
Smart Phone 1,398,000 119.1%
Source: China Mobile Network www.chinamobile.gov.cn
Examining the colour screen phone and camera-enabled phones for example, the rapid
growth period for colour screen phones have gone and the market share of colour screen phone
have stabilized at over 90%.40 Right now, the market is moving towards a higher resolution
screen and higher quality colour. In terms of new function and features, growth on new camera
phones has slowed down. Last year, new camera phones represented 75% of newly introduced
cell phones.41 This year, this number increased 2% to 77%. On the other hand, MP3-enabled
phones have increased from 31.4% to 47.7%, Bluetooth has increased from 11.0% to 15.4% and
smart phones have increased from 6.8% to 9.2%.42 Therefore, colour screens and camera phones
have become the mainstream and necessary features in the market and MP3 phones and Smart
Phones will likely become the new growth drivers. Smart phones are especially poised for
success and are still in the very early stage of its development.
For the past few years, cellular carriers and handset manufacturers have talked a lot about
third-generation (3G) services for mobile phones. Simply put, 3G cellular technology brings
wireless broadband data services to your mobile phone. Boosting speeds from 144Kbps (roughly
three times faster than a 56K dial-up modem connection) to 2.4Mbps (close to cable-modem
speed), 3G networks let you speed through Web pages, enjoy streaming music video, watch on-
demand video programming, download and play 3D games, and videoconference with your
fellow mobile user network. While the interface is undoubtedly different on a cell phone, the
experience of surfing, downloading, and streaming stands to be very close to that of a broadband
connection on a computer. 3G cell phones are the next big trend in the cell phone market of
China. However, before getting into 3G, cell phone producers are going to have to work closely
with carriers to make sure that their products meet the necessary requirements. Network analysis
shows us that as the market grows to mature, carriers are going to play an increasingly important
role in the cell phone market. Carriers like Bell and Rogers (the compliment network) will
require the likes of Nokia, Samsung, and Motorola (the producer network) to customize cell
phones and sell them as service packages to customers.
To summarize the mobile phone product category from a network ecology perspective, it
is quite apparent that the development of each network is critical to the products success. That
is, the product can only be as strong as its user network. As the user network expands features
such as text and video messaging suddenly become more attractive and necessary. A large
compliments network is required as mobile service providers act as the link between the users.
Less necessary compliments such as accessories enhance the user’s experience. Finally the large
producer network ensures differentiation by innovation. That is, companies must differentiate
their offering to ensure success in the marketplace.
In the mobile phone industry in China, consumer behaviour is quite complex; they desire
low price, high functionality and also fashionable design. As model lifecycles are very short
companies are trying to differentiate themselves by whatever means necessary. Based on the
consumer research results, functionality is still the key driver in customers purchase decisions.
Technological innovation on cell phones will keep more focus on new features rather than just
the design and appearance. Once the design or function becomes an industry standard, it
becomes the must-have feature customers require. Colour screen cell phones (form) accounts for
90% of market now), Chinese input (function) is now also an industry norm. Based on the
consumer analysis, although design differentiation is important to consumers, due to the
abundance of features that can be added, their top consideration when purchasing a product
continues to be functionality. There is so much farther to go in the cell phone market before
complete convergence is met, therefore functionality may continue to surpass form.
• Consumer’s behaviours are changing rapidly. Today's “wows” become tomorrow's must-
• Customer “satisfaction” requires fulfilling basic requirement, but future customers
demand "wow factor" that exceed their expectations.
D. KEY MARKETING IMPLICATIONS
The following is a discussion of marketing implications drawn from these case studies, as well as
existing marketing theory.
1. Form for Existing Function
The positioning of both the iPod and hybrid cars have been within an existing category. (iPod
within “portable music players” and hybrid cars within “cars.”) As discussed in class43, the
advantage of positioning a product in an existing category defines the parameters for consumer
demand. An existing category confirms that consumer demand exists.
These markets are by definition “mature” and therefore differentiation comes largely from
design. Entrants, however, earn the right to draw on existing demand by being a “better” version
of what is already there.
As discussed, positioning the “iPod as a better walkman” was successful because it surpassed
the functionality of the Walkman (compatibility with digital music), Discman (smaller and does
not skip) and MP3 players (more storage and the “wheel”). This combined with a sleek design
ensured a successful launch and continued market success.
The hybrid car was “just like cars but better for the environment” only it offered unfamiliar
experiences (silent idling) and was not noticeably superior in relevant areas. The innovative form
of the Honda Insight could not overcome the functional parity, and in some cases had
Micki Eisenman cautions that a focus on form necessitates constant contact with customers
and interaction to remain engaged with fickle consumer tastes44 (e.g. cell phones in China).
Attaching a memorable aesthetic form to a product can also create positive associations between
the brand and new developments. This can be especially powerful as the technology adoption
increases and the consumer perceptions move from the product to the process. As evident from
the hybrid car example, the slow adoption can stifle a product whose functionality does not
exceed the customer’s base level requirements on core attributes.
2. Form for New Function
A product with brand new—and unfamiliar—function must create its own market and
following. As described by Geoffrey Moore,45 the product must move across the “chasm” that
separates the relatively small group of early adopters and the large market of mainstream
consumers. In a relevant class reading46, Meldrum supports this with his discussion on the
importance of building trust with end-users (e.g. consumers) when presenting a product or
service that is unfamiliar.
In this category, the form of the product appears only relevant as relating to function (e.g.
size and weight for a portable device). Within the new category the differentiation is on function,
as was the case with the launch of the Blackberry in 1999. Positioning in a new category enables
the company to define the market and establish leadership as a first mover47. The key risks with
this approach involve that the market will be unproven, and there is significant time-to-adoption
risks involved in reaching the mainstream market profitably.
3. More Form, More Function
From a function perspective, marketers must ask: “Which customers value this new function
and by how much?” It is possible (and very tempting to try!) to serve more needs of customers,
which can build in switching costs and offer more value (for which can command a premium).
Again, this is related primarily to products within well-established markets, where supply
In the Meldrum reading48, the term “technology seduction” describes the practice of
focussing on improvements that are enabled by the technology, as opposed to concentrating on
the consumer need. In a recent rant, leading New York Times technology columnist David Pogue
took issue with hyping “irrelevant specs” in his Ten Commandments to electronics
The threat is someone stealing the low end of the market and creating a new niche. In his
book The Innovator’s Dilemma50, Clayton Christensen describes the risk associated with
incremental developments (additional or horizontal) over-serving some segments of the customer
group. This leaves this group open to simpler (and cheaper) products, and forces incumbents to
move up market in order to avoid competing on price with and inferior product.
Today’s continual technology improvements and product innovations and improvements
create more opportunities and choices for marketers of consumer technology products. By
definition, technology products perform a function. Additionally, all will have a form. Marketers
must consider both in approaching strategies to engage consumers.
True breakthroughs can create opportunities to create—and own—a market. However, even
with bona fide innovations, the iPod example shows advantages in playing down the innovation
in order to access and existing market.
Consumer preferences and pressures to differentiate are pushing cell phone makers to add
more and more, but is this creating an opportunity for a low-end solution provider?
Understanding the relative position on the life cycle, and understanding customer needs can
assist in formulating a sustainable strategy.
Davenport, T. H., & Beck, J. C. (2001). The Attention Economy: Understanding the New Currency of Business. Boston:
Harvard Business School Press.
Wikipedia. Accessed from: http://en.wikipedia.org/wiki/Apple_iPod
“Introducing the World’s first MP3 Player” Eliot Van Buskirk 2005
“iPod Nation” Steven Levy 2005
“iPod Marketing Exposed” David Richards 2005
“iPod Marketing Exposed” David Richards 2005
“Doing Cultural Studies: The story of Sony Walkman” Paul du Gay, Stuart Hall, Linda Janes, Hugh Mackay and Keith
“iPod Marketing Exposed” David Richards 2005
Toyota Prius web site. Accessed from: www.toyota.com/prius/
Toyota web site. Accessed from: www.toyota.com/prius/
Lemonick, Michael D. “How to Kick the Oil Habit.” Time Magazine. 10/31/2005, Vol. 166 Issue 18, p60-64, 4p, 3c.
Recycled Thought Web site. Accessed from: http://recycledthought.blogspot.com/
Author Unknown. “ Hybrid car sales rose 81% last year”. USA Today.
Car Smart Web site. Access from: www.carsmart.com
Automobile Buyer Decisions about Fuel Economy and Fuel Efficiency
Final Report. University of Californaia. Energy Foundation. Sept 1, 2004.
Author Unknown. “56 Percent of Americans Refuse to Downsize Vehicles Despite High Gas Prices.” NEWSWEEK.
Oct 10, 2005.
USNews.com. “2004 Toyota Prius. A revolution becomes routine”. Accessed from: www.usnews.com.
“An environmental and economic comparison between hybrid electric vechicles and pure combustion engines.” January
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