What Marketers Should Know About Design Research

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Speech by CEO of Russian design research consultancy Lumiknows Ekaterina Khramkova at the 15th Russian largest design and advertising exhibition "Design & Advertising Industry in Russia" held at the Central House of Artist in Moscow from 15th to 18th of April, 2009.

What Marketers Should Know About Design Research

  1. 1. What Marketers Should Know About Design Research. Dr Ekaterina Khramkova, Founder & CEO Russian Design Research Consultancy Lumiknows :: 17 April 2009, Design & Advertising Industry in Russia, Central House of Artist, Moscow ::
  2. 2. 1. Why design research? 2. What is the essence of design research approach? ©2009 Russian Design Research Consultancy Lumiknows 2
  3. 3. Why Design Research? ©2009 Russian Design Research Consultancy Lumiknows 3
  4. 4. To understand your customer as deep as possible. ©2009 Russian Design Research Consultancy Lumiknows 4
  5. 5. drivers needs values Its values, drivers, anticipations and needs. ©2009 Russian Design Research Consultancy Lumiknows 5
  6. 6. Its day-to-day experiences and environment. 6
  7. 7. Its Weltanschauung… ©2009 Russian Design Research Consultancy Lumiknows 7
  8. 8. So far so good… But how about market research?! ©2009 Russian Design Research Consultancy Lumiknows 8
  9. 9. Every year brings 30,000 of new products. About 90% of them fail despite thorough and expensive market research. Harvard Business Review, 2005 Marketing Malpractice ©2009 Russian Design Research Consultancy Lumiknows 9
  10. 10. Why does it happen?! ©2009 Russian Design Research Consultancy Lumiknows 10
  11. 11. Transformation of consumption culture ©2009 Russian Design Research Consultancy Lumiknows 11
  12. 12. Traditional • When brands had no «BRAND - CUSTOMER» difficulties with reaching relationships model target audiences and BRAND • Launched products which had always found its customer CUSTOMER ©2009 Russian Design Research Consultancy Lumiknows 12
  13. 13. Traditional «BRAND - CUSTOMER» relationships model is over. BRAND CUSTOMER ©2009 Russian Design Research Consultancy Lumiknows 13
  14. 14. Brands experience real difficulties with 1. «delivering» its messages to the customer, «delivering» 2. «synthesizing» obtained information into a successful product or service. ©2009 Russian Design Research Consultancy Lumiknows 14
  15. 15. Let’s talk about the first part. Brands experience real difficulties with 1. «delivering» «delivering» its messages to the customer, 2. synthesizing obtained information into a successful product or service. ©2009 Russian Design Research Consultancy Lumiknows 15
  16. 16. ABUNDANCE OF PRODUCTS ©2009 Russian Design Research Consultancy Lumiknows 16
  17. 17. ABUNDANCE OF BRANDS ©2009 Russian Design Research Consultancy Lumiknows 17
  18. 18. 3000 – Number of advertising messages people are exposed to per day. Justin Kurby & Paul Marsden, Oxford, 2006 ©2009 Russian Design Research Consultancy Lumiknows 18
  19. 19. 3000 – Number of advertising messages people are exposed to per day. 90% – Proportion of people who can skip TV Justin Kurby & Paul Marsden, Oxford, 2006 ads and who do skip. Justin Kurby & Paul Marsden, Oxford, 2006 ©2009 Russian Design Research Consultancy Lumiknows 19
  20. 20. 3000 – Number of advertising messages people are exposed to per day. 90% – Proportion of people who can skip TV Justin Kurby & Paul Marsden, Oxford, 2006 ads and who do skip. Justin Kurby & Paul Marsden, Oxford, 2006 80% – Market share of video recorders with ad skipping technology in 2008. Justin Kurby & Paul Marsden, Oxford, 2006 ©2009 Russian Design Research Consultancy Lumiknows 20
  21. 21. Now, how do you think, what is becoming the most valuable for Brand in its relationships with Customer? ©2009 Russian Design Research Consultancy Lumiknows 21
  22. 22. Attention. ©2009 Russian Design Research Consultancy Lumiknows 22
  23. 23. Attention of customer to your brand. ©2009 Russian Design Research Consultancy Lumiknows 23
  24. 24. A wealth of information creates a poverty of attention. Herb Simon, 1971 ©2009 Russian Design Research Consultancy Lumiknows 24
  25. 25. …Being able to capture A wealth of information someone’s attention at the creates a poverty of right time is a very valuable attention. asset. Hal Varian, 2009 Herb Simon, 1971 Google’s Chief Economist, The McKinsey Quarterly, “Hal Varian on how the Web challenges managers” ©2009 Russian Design Research Consultancy Lumiknows 25
  26. 26. …Being able to capture A wealth of information someone’s attention at the creates a poverty of right time is a very valuable attention. asset. Hal Varian, 2009 Herb Simon, 1971 Google’s Chief Economist, The McKinsey Quarterly, “Hal Varian on how the Web …Real competition no longer revolves challenges managers” around market share. We are competing for attention – mind share and heart share. K. Nordstrom, J. Ridderstrale, 2002 Funky Business ©2009 Russian Design Research Consultancy Lumiknows 26
  27. 27. Very nice… But how to attract an attention of customer??? ©2009 Russian Design Research Consultancy Lumiknows 27
  28. 28. Magic #1. Осторожно. МАГИЯ… http://www.flickr.com/photos/aknacer/2914095066/ ©2009 Russian Design Research Consultancy Lumiknows 28 http://www.flickr.com/photos/aknacer/2914095066/
  29. 29. If you are in need of an honest attention of your customer …you should be honestly attentive to him. ©2009 Russian Design Research Consultancy Lumiknows 29 http://www.flickr.com/photos/aknacer/2914095066/
  30. 30. Brand Loyalty Empathy ©2009 Russian Design Research Consultancy Lumiknows http://www.flickr.com/photos/keesssss/109284197/ 30
  31. 31. Advertising is about selling stuff, but Branding is about creating values. ©2009 Russian Design Research Consultancy Lumiknows http://www.flickr.com/photos/keesssss/109284197/ 31
  32. 32. Management will increasingly have to be based on the assumption that neither technology nor end use is a foundation for management policy. They are limitations. The foundations have to be customer values and customer decisions on the distribution of their disposable income. Peter Drucker, Management Challenges for the 21st Century, 1999 ©2009 Russian Design Research Consultancy Lumiknows 32
  33. 33. Until recentrly: What technical/organization/f inancial/manufacturing possibilities for designing new product do we have? (Technology- Driven Strategy); Now: How can we empathize with our customer?/What should we design to make our new brand/product experience meaningful and exciting? (Consumer-Driven Strategy). ©2009 Russian Design Research Consultancy Lumiknows 33
  34. 34. You have folks marketing tomato sauce, for example, who don’t make their own spaghetti but dine at fine Italian restaurants and have not opened a jar of spaghetti sauce in their own house in years. Interview with Dev Patnaik, Author of Wired to Care: How Companies Prosper When They Create Widespread Empathy, 2009 ©2009 Russian Design Research Consultancy Lumiknows 34
  35. 35. Let’s talk about the second part. Brands experience real difficulties with 1. «delivering» its messages to the customer, 2. «synthesizing» obtained information into a successful product or service. ©2009 Russian Design Research Consultancy Lumiknows 35
  36. 36. We investigated into fourteen large companies with an annual sales volume from $500 million to $10 billion. Only four of them had managed to meet plan in terms of timing, functionality of new products and market share. Harvard Business Review, 2007 ©2009 Russian Design Research Consultancy Lumiknows In search for new generation's product. 36
  37. 37. We investigated into fourteen large WHAT companies with an annual sales volume from $500 million to $10 billion. CAUSED Only four of them had managed to meet plan in terms of timing, THIS? functionality of new products and market share. Harvard Business Review, 2007 ©2009 Russian Design Research Consultancy Lumiknows In search for new generation's product. 37
  38. 38. It turned out, every time when in an NPD process difficulties occurred, the roots of the problems could easily be found at the stage of early planning, when the company had to decide what design the new product will have. Harvard Business Review, 2007 ©2009 Russian Design Research Consultancy Lumiknows 38
  39. 39. “The Fuzzy Front End of Innovation” – Identifying customer needs; – Synthesizing the needs in the form of design brief. http://www.flickr.com/photos/jurvetson/2542450115/ ©2009 Russian Design Research Consultancy Lumiknows 39
  40. 40. “The Fuzzy Front End of Innovation” – Identifying customer needs; – Synthesizing the needs in the form of design brief. – Establishing target specifications; – Concept generation; – Concept selection and testing; – Final specifications; – Project planning; – Economic analysis; – Etc. Adapted from: Karl Ulrich, Steven Eppinger, Product Design & Development http://www.flickr.com/photos/jurvetson/2542450115/ ©2009 Russian Design Research Consultancy Lumiknows 40
  41. 41. «Phase Zero», at which customer needs are identified and interpreted is the most dangerous in new product development. ©2009 Russian Design Research Consultancy Lumiknows 41
  42. 42. It is here where the main reason behind new products failure lie. ©2009 Russian Design Research Consultancy Lumiknows 42
  43. 43. The main reason behind new products failure: 24% Inadequate market analysis (i.e. analysis of customer needs); 16% Product problems of defects; 14% Lack of effective marketing effort; 10% Higher costs than anticipated; 9% Competitive strength and reaction; 8% Poor timing of introduction; 6% Technical or production problems; 13% All other causes. Robert Cooper, Winning At New Products ©2009 Russian Design Research Consultancy Lumiknows 43
  44. 44. Traditional marketing is good at analyzing existing market ideas, but has problems with generating an innovative product idea. ©2009 Russian Design Research Consultancy Lumiknows 44
  45. 45. If I’d ask people what they wanted, they would have said a faster horse. Henry Ford, Beginning of the 20th c. ©2009 Russian Design Research Consultancy Lumiknows 45
  46. 46. If I’d ask people what they wanted, they would have said a faster horse. If you’d asked people what they wanted in a VCR, they might have eventually suggested something like “super-fast rewind”. … You Henry Ford, might set out to create the fastest- Beginning of the 20th c. rewinding VCR in the world. But just as you released your fancy new model, you would have been blown away by the arrival of the first DVD players – which, along with sporting superior image quality, sound, capacity and improved reliability, require no rewinding at all! Tom Kelley, The Ten Faces of Innovation, Beginning of the 21st c. ©2009 Russian Design Research Consultancy Lumiknows 46
  47. 47. Companies have really big difficulties with identifying and synthesizing customers needs to create a product customer will prefer despite an abundance of choice. ©2009 Russian Design Research Consultancy Lumiknows 47
  48. 48. So what?.. How to more effectively synthesize needs?? http://www.flickr.com/photos/jurvetson/2542450115/ ©2009 Russian Design Research Consultancy Lumiknows 48
  49. 49. Magic #2. ©2009 Russian Design Research Consultancy Lumiknows 49
  50. 50. Shift from narrow defined customer to total human experience. ©2009 Russian Design Research Consultancy Lumiknows 50 http://www.flickr.com/photos/aknacer/2914095066/
  51. 51. ©2009 Russian Design Research Consultancy Lumiknows 51
  52. 52. ©2009 Russian Design Research Consultancy Lumiknows 52 http://www.flickr.com/photos/dogfaceboy/1095640322/
  53. 53. Transformation of consumption culture ©2009 Russian Design Research Consultancy Lumiknows 53
  54. 54. Transformation of consumption culture 1. To control customer’s attention is getting harder – she/he manages “the marketing space” on her own; 2. Marketing has problems with The Fuzzy Front End of Innovation at which customer needs are identified and new product ideas are generated. ©2009 Russian Design Research Consultancy Lumiknows 54
  55. 55. Transformation of consumption culture and, as a result, Fundamental changes in designer’s competencies. ©2009 Russian Design Research Consultancy Lumiknows 55
  56. 56. http://www.flickr.com/photos/redgum/238095322/ New expertise of designer: CUSTOMER understanding DESIGN BRIEF Synthesizing ©2009 Russian Design Research Consultancy Lumiknows 56
  57. 57. http://www.flickr.com/photos/redgum/238095322/ Purpose of design research: CUSTOMER understanding DESIGN BRIEF Synthesizing ©2009 Russian Design Research Consultancy Lumiknows 57
  58. 58. Market Research Design Research Techniques Techniques Artificial setting In-context Self-reporting of behaviours Observe behaviours first hand Identifies “preferences” Identifies “user experience” Sanitized data (aspiration) Raw data (reality) Focuses on the “known” Focuses on new possibilities Closed ended questions Open ended dialogue Detached research team Integrated to design development team Bar charts & text Visual images Design in Technology program, University of Cambridge, Judge Institute of Management, 2004 ©2009 Russian Design Research Consultancy Lumiknows 58
  59. 59. The essence of design research approach. ©2009 Russian Design Research Consultancy Lumiknows 59
  60. 60. flickr.com/photos/myklmabalay/30178916 In the special way of seeing the situation flickr.com/photos/bacillus/2743928941/ ©2009 Russian Design Research Consultancy Lumiknows 60 http://www.flickr.com/photos/mllemathilde/1428593831/
  61. 61. flickr.com/photos/myklmabalay/30178916 http://www.flickr.com/photos/kiolero/745968385/ flickr.com/photos/bacillus/2743928941/ through people’s eyes. ©2009 Russian Design Research Consultancy Lumiknows 61 http://www.flickr.com/photos/theloser091/2186539998/in/set-72157606514104932/ http://www.flickr.com/photos/firenzesca/2494845630/
  62. 62. In the unique ability to work with ill-defined information ©2009 Russian Design Research Consultancy Lumiknows 62
  63. 63. synthesizing new from chaos. ©2009 Russian Design Research Consultancy Lumiknows 63
  64. 64. Despite an abundance of data, most companies do a poor job of predicting the behavior of their customers. Even companies that take the greatest trouble over their predictions are correct only 55% - a result that hardly justifies the costs of having a customer relationship management system in the first place… Harvard Business Review, March 2006 ©2009 Russian Design Research Consultancy Lumiknows 64
  65. 65. Design research methods Laura S. Richardson «Deconstructing Design», ITT, 2008. ©2009 Russian Design Research Consultancy Lumiknows Sources: M3 Design, frog design, IDEO, Continuum, IIT, TU Delft, SmartDesign, 65 Nokia and others.
  66. 66. The real art of discovery consists not in finding new lands, but in seeing with new eyes. Marcel Proust ©2009 Russian Design Research Consultancy Lumiknows 66
  67. 67. http://www.flickr.com/photos/kenilio/172744389/sizes/o/ You may use these ones… ©2009 Russian Design Research Consultancy Lumiknows 67
  68. 68. «Wow! «Panoramic View» I see this for the first time in my life!» http://www.flickr.com/photos/7539598@N04/3085177911/ http://www.flickr.com/photos/_miss_lucky_/2579436279/ But you would be better of using something like these. ©2009 Russian Design Research Consultancy Lumiknows 68
  69. 69. http://www.flickr.com/photos/jo92/1659953189/ Design research is about seeing things seen many times before in a completely new light. ©2009 Russian Design Research Consultancy Lumiknows 69
  70. 70. In other words, to see behind day-to-day «usual life situations» «of an average customer» opportunities of creating new. ©2009 Russian Design Research Consultancy Lumiknows 70
  71. 71. What do you think this is? ©2009 Russian Design Research Consultancy Lumiknows Thoughtless Acts? Jane F. Suri, IDEO 71
  72. 72. And this? ©2009 Russian Design Research Consultancy Lumiknows Thoughtless Acts? Jane F. Suri, IDEO 72
  73. 73. Or these? ©2009 Russian Design Research Consultancy Lumiknows Thoughtless Acts? JaneJane F. Suri, IDEO Thoughtless Acts? F. Suri, IDEO 73
  74. 74. Images from day-to-day “usual” life? ©2009 Russian Design Research Consultancy Lumiknows 74
  75. 75. http://www.flickr.com/photos/60538638@N00/2629847447/ No, these are opportunities of creating thousands of innovative brands, products, services, based on real life customer needs. ©2009 Russian Design Research Consultancy Lumiknows 75
  76. 76. http://www.flickr.com/photos/60538638@N00/2629847447/ Discovery consists of seeing what everybody has seen and thinking what nobody has thought. Albert Szent-Gyorgyi ©2009 Russian Design Research Consultancy Lumiknows 76
  77. 77. Good news.. Abundance of opportunities. ©2009 Russian Design Research Consultancy Lumiknows 77
  78. 78. Сharles H. Duell, The commissioner of the United States Patent and Trademark Office : «Everything that can be invented has been invented». ©2009 Russian Design Research Consultancy Lumiknows 78
  79. 79. Сharles H. Duell, The commissioner of the United States Patent and Trademark Office : «Everything that can be invented has been invented». It was said in 1899... ©2009 Russian Design Research Consultancy Lumiknows 79
  80. 80. If we base ourselves in technologies, - the end of innovations is really close. But if we originate in humans, – opportunities of creating new are endless… ©2009 Russian Design Research Consultancy Lumiknows 80
  81. 81. Laura S. Richardson, «Deconstructing Design», ITT, 2008. 81
  82. 82. Launching new products and services is the No.1 driver of revenue growth; By 2010, products representing more than 70 per cent of today's sales will be obsolete due to changing customer demands and competitive offerings. Deloitte Research, ©2009 Russian Design Research Consultancy Lumiknows Global Manufacturing Study 82
  83. 83. Customer is ready to these figures… Is your brand prepared to them?? ©2009 Russian Design Research Consultancy Lumiknows 83
  84. 84. http://www.flickr.com/photos/aknacer/2914095066/ to Are you ready empathize with your customer? Do you have enough expertise to understand his/her total human experience?? ©2009 Russian Design Research Consultancy Lumiknows 84
  85. 85. ©2009 Russian Design Research Consultancy Lumiknows 85
  86. 86. Is your brand ready to not just sell people your product, but create meaningful values for them? ©2009 Russian Design Research Consultancy Lumiknows 86
  87. 87. Thank you for your time. ©2009 Russian Design Research Consultancy Lumiknows
  88. 88. www.designresearch.ru Dr Ekaterina Khramkova e.khramkova@lumiknows.com flickr.com/photos/mllemathilde/1428593831/ ©2009 Russian Design Research Consultancy Lumiknows

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