Cost quality-aspiration

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ID Product Design to blend at any price point.

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Cost quality-aspiration

  1. 1. W H I T E P A P E R Balance of cost, quality and aspiration: A must at any price point Senior management “Principles of Marketing” course at Indian Institute of Management (IIM) Shombit Sengupta01 ©Shining Consulting: www.shiningconsulting.com +91-80-4127 6999
  2. 2. The balance of cost, quality COST DESIGNand aspiration at any price Material cost is difficult to control because of market dynamics such as inflation. There will always be apoint of any product or service bunch of competitors in any product category, butis a must for tomorrow’s material cost could be the same for everybody. How can one player overcome another?forward looking marketing.The selling price of anyproduct or service is a bigfactor for target customers,whether the category is lowor high priced. Cost Quality AspirationMost people do notflaunt money without havingthe appropriate result fromany product.Humane industrial design, isthe balance of the 3 elementsof cost, quality and aspiration.02 ©Shining Consulting: www.shiningconsulting.com +91-80-4127 6999
  3. 3. A strong cue to get customer mindshare isadded perceptible functional benefit.This can change the volume game.Production cost decreases when youhave more volume.ID Product Design is basedon the ideology of “reduceeffort, increase comfort.” whichobviously adds functionalbenefit for the user. sports shoes, ink for pen to refill ball pens, typewriter to computer, carbon copy to photocopy, cash payment to card payment among many others.The pulley system is an idealmetaphor of reduce effort,increase comfort, which in But usage superiority is not a matter ofcustomer usage experience, automation or scientific lab work; rather it is about understanding the consumer in thechanges the paradigm. psychological lab. The unsaid aspect in any product usageExcellence of functionality is the crux in the is the microtone functional improvementevolution of ID Product Design. parameters that customers perceive.Examples that effectively display functional That’s why, to understand gaps inexcellence ranges from the steam engine functionality, we need the combinedto TGV, propeller planes to supersonic physiological and psychological balanceConcorde, basic canvas keds to Nike of consumers.03 ©Shining Consulting: www.shiningconsulting.com +91-80-4127 6999
  4. 4. Humane industrial design is discovering the unique functionality that customers care to use, such as an air bag in a car.The consumer’s mind always movestowards 2 baskets, the generic or unique.An analogy for the unique find is the goldmicro particles mixed with sand or hiddenin rock, while something very easily foundis the generic. Generic In any price segment, whether it is high or low, if the functional superiority is obvious and universal, it would mean volume sales Unique will grow. This would automatically bring down the cost of production.04 ©Shining Consulting: www.shiningconsulting.com +91-80-4127 6999
  5. 5. QUALITY DESIGN:It’s no longer true that only A product should visibly reflect itssophisticated, expensive products will quality in the customer’s hand. This willhave quality. encourage the customer’s confidence as the quality of the product’s hiddenCustomers get multiple options in the mechanism cannot be seen at themarket today where both quality and moment of purchase or during usage.reasonable cost meet their expectation. People discover its intrinsic quality withIn buying Chinese products customers the passage of time.don’t expect quality beyond a certainlimit as they think they are gaining in The proven example of howbetter price advantage. the manufacturer has never compromised on quality isA branded mass product has to assure the $ 30 Swatch watch whichunconditional quality during its durableusage cycle. Otherwise the customer has never failed in any qualitygets placed in a trade off situation parameter. And Swatch is nobetween a Chinese product and a well less in aspiration than any otherknown branded product. costly watch. Rado Tag Heuer Swatch $ 30 Rolex $ 7000 $ 4000 $ 1000005 ©Shining Consulting: www.shiningconsulting.com +91-80-4127 6999
  6. 6. ASPIRATIONAL DESIGN People’s aspirationAspiration is an important element forsales growth. Once upon a time, it was the level shot upaspiration of royalty or feudal lords thatdecided on functionality excellence. significantly after World War II. The free economy is a key driver for the growth of aspiration. The growth of industry and globalization led to an obsession for mass production to have Feudal LordWhen democracy came, the economic control over the globallevel of people rose, and productfunctionality became a factor for multiple market. From thesocieties to express through theirpurchase behaviour. This was the value game, it becamebeginning of the creation of the massmarket. the numbers game.Car ownership limited to only rich People’s car “Volkswagen” in masspeople before World War II production unit after World War II06 ©Shining Consulting: www.shiningconsulting.com +91-80-4127 6999
  7. 7. How can we bring this aspiration to everyprice point through humane industrial design?Even seemingly irrelevant distribution logistics system can totallydestroy the business result of humane industrial design products.See how Swatch customises its store according to the locality. Swatch store in Time Square, New York Swatch in Soho, New YorkHere aspiration can be transcendedfrom multiple areas such asfunctionality beyond expectation,high order intensity in userfriendliness, touch and feel ofthe product, in aesthetics whichamount to high craftsmanship andthe skill of art in business.07 ©Shining Consulting: www.shiningconsulting.com +91-80-4127 6999
  8. 8. If you only think of business, art willescape you; and with art alone youwill not make business. You requirethe finesse of art that drives businessthrough design.A technical tool makes only a stereo typed An artistic tool for thinking of humane industrialindustrial design product design can create high volume products So design that sells a product has 3 components: • Cost design with uncommon functional superiority • Quality design at any price point • Aspirational design at any price point But the perfection of these 3 designs depends on © Copyright of all logos and images belong to the respective Cos. marketing design, in how, and in what context, you sell the product. Shining Consulting Pvt., Ltd. 17, Visveswariya Industrial Area, Tel : 91-80-4127 6999 / 81 Mahadevapura 2nd Stage, Fax : 91-80-4127 6990 Bengaluru - 560 048, India. Email: shining@shiningconsulting.com www.shiningconsulting.com08 ©Shining Consulting: www.shiningconsulting.com +91-80-4127 6999

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