Connection between design and marketing

Margaret Bruce & Lucy Daly 'Design and marketing connections: creating added value' (2010).

Findings:

'Design is fundamental to business success and competitiveness. To exploit new markets, to retain or recapture their share of world markets, producers have to develop new products and services that consumers want. Whatever the marketing goals – holding onto market share, increasing market share or entering a new market – it is investment in design and product development that produces the new or updated/redesigned products or services, packaging and communications that helps to achieve these goals. Good design differentiates companies and makes products ‘stand out from the crowd’. Innovative design opens up new markets. Clever design rekindles interest for products in a mature market. Well-designed products communicate quality and value to the consumer, so enhancing the product’s appeal and attractiveness, making selection easier (Kotler and Rath 1990). A summary of the marketing benefits of design is as follows (DTI 2005): Enhances product and service quality ? Differentiates products and services ? Markets products and services and enhances company image ? Lowers production and/or maintenance costs ? Adds to the creativity, intellectual property and competence of the company' (p. 930)

'Companies can be reticent about design investment because executives may be unsure as to how design contributes to business performance. Design can become marginalized and seen as a ‘nice to have’, rather than an essential activity and reference has been made to ‘two cultures’ i.e. creative/arty/style and commercial (Walker 1998, Beverland 2005). Studies have highlighted difficulties in managing such a creative resource and referred to irresolvable tensions, misunderstandings due to use of different technical languages and different goals (Bailetti and Litva 1995). Potter et al. (1991) cite examples, on the one hand, where marketing budgets are inadequate to meet design needs and, on the other hand, where the design solution fails to deliver expectations, etc. An apt way to express the nature of the marketing and design interface is that of Kristensen (1998) who suggests that ‘design’s conceptual and visual creativity aims to satisfy the individual needs of a user, whereas marketing’s goals are directed towards business aims of market demand and production’.' (p. 931)

'Research has shown that investment in design leads to an increase in sales of over 41% and that 90% of new design projects are profitable. And also, that design is a relatively low risk investment. Potter et al. (1991) discovered that projects paid back their total investment costs in less than 15 months from the time of project implementation. Graphics projects were more likely to pay back more quickly than products and these were less costly and had a more immediate market effect.' (p. 931)

'In some cases, comparisons were made between an established product and its redesign. This was very revealing. After a redesign of an existing product, sales increased by 41%. Other benefits included reduced manufacturing costs, stock saving, increased profit margins and improvements in the company’s image. However, if this level of performance were to be universally achieved, then companies would invest in design with the expectation that their business performance would improve. Indeed, the above studies are cautious in making generalisations about focusing just on investment in design, they tend to suggest that the companies involved in such investigations are also prone to be ‘good at everything, not just design’. It is complex to isolate design from other business activities to prove conclusively that design is the root cause of effective business performance. Also, it has to be noted that the methodology of the above type of studies is based on certain ‘input’ and ‘output’ factors of companies that have been in receipt of government investment in design during programmes which themselves have been organised to promote the use of design by small companies. Small companies have a narrower product range compared with larger companies and so ‘input’ and ‘output’ factors may be rather more transparent, than for larger companies that have a range of products, some of which are cost inter-dependent.' (p. 931)

'Trueman and Jobber (1998) contribute to the notion of design as being more than a functional activity. Further, they posit that design is connected to marketing in three different ways, as follows: at the product level, good design leads to the production of quality goods and services (that) can improve company image and increase the consumer’s perceived value of new products, so that they command a higher retail price in the marketplace. At the process level, designers can interpret, integrate and communicate new ideas… (so) likely to speed up and increase effi ciency…and reduce time to market. At a strategic level in terms of brand building...and the development of a corporate design culture.' (p. 932, 934)

'Marketing practitioners – whether they are based in a service, retail or manufacturing environment – spend a significant proportion of their time working with design. A mixture of market trends and developments in know-how prompts design changes. As consumer tastes change, there is a need for new design to fill market gaps. Technological developments in materials, information technology and so on are captured in new designs and open up new market possibilities. A recent example is Apple’s IPod, where an opportunity to develop a personalised and mobile music system connected to the internet became the ‘must have’ product globally. This example illustrates the Design Council’s (2007) approach to understanding design in business: Scientists can invent technologies, manufacturers can make products, engineers can make them function and marketers can sell them, but only designers can combine insight into all these things and turn a concept into something that’s desirable, viable, commercially successful and adds value to other people’s lives.' (p. 934-935)

'From a strategic marketing position, when a company decides to enter a new market, it has to have the goods and services to offer. If it is seeking to increase its market share, it may restyle its existing products. If two companies have merged, then a new corporate identity may be required. Such strategic changes initiate investment in design. If these changes are executed effectively, then there will be a commercial reward; if not, then the company could lose resources, lose prestige or miss a gap in the market.' (p. 935)

'Managing design is about dealing with relationships to facilitate an atmosphere that stimulates creativity and flow of ideas. Effective ‘personal chemistry’ between the designer and client, trust and empathy are key to this (Bruce and Doherty 1993). The client can be internal or external to the company and design expertise is typically sourced from external firms. Crucial to the design process is the choice of the designer/design team who possess the appropriate expertise, aptitude and attitude. Attitude refers to the ‘fit’ of the working style – the modus operandi – with that of the client (Bruce and Jevnaker 1998; Bruce and Morris 1998) and the ‘tacitness’ of the relationship (Cavusgil et al. 2003)' (p. 936)

'Another consideration is that of the nature and duration of the relationship between the client and design company. Evidence indicates that longer-term relationships are more likely to save time, cost and lead to an empathy with the client’s needs, so enabling the design company to act strategically to be more proactive in building the market and contributing to business success (Bruce and Morris 1998). One example is that of a small Norwegian furniture company who launched a new, ergonomically designed chair for children. The designer was outsourced and not only created the chair, but, over time, a whole family of products for the company. This partnership or ‘strategic alliance’ led to the company’s growth and international success (Bruce and Jevnaker 1995).' (p. 936-937)

'Briefs Another aspect of design management is that of preparing design briefs. In successful companies, research shows that those managers commissioning design work were clear as to the objectives and rationale underlying the product design and development, (Walsh et al. 1992). A comprehensive design brief stated the objectives of the product development, the target market, pricing policy, product details (e.g. shape, dimensions, material, etc.).' (p. 937)

'The items included in the briefs of three chocolate companies are compared in Figure 3. Company B is the most commercially successful company out of the three. At a glance, it is clear that company B had the most detailed brief, and company A had the least. Company B had well defined objectives for going ahead with the project and its brief had marketing information, such as pricing policy, target market, competitor analysis and so on. This company prided itself on its strategic approach to design and marketing and so expended considerable effort in identifying market gaps, assessing market trends, evaluating the competition, gathering customer feedback about its products and finding out about customers’ uses of, and attitudes to, chocolate products. The market research was used as a basis for planning and product development, cost parameters and establishing a market need for ‘indulgent countlines’. Design generated the brief, together with marketing, so that both of these activities had an understanding of the project requirements at the outset.' (p. 937)

'By contrast, company A had a more of a production approach to design and product development, one of selling what it could make, rather than making what it could sell. The company did not have a marketing function and design was seen as an activity to ‘jazz up products’ and so there were low expectations of design’s contribution. The brief was verbally agreed on by the Sales, R&D and Production Directors, but often the Directors could not remember what they had agreed to, and so the product was passed back and forth before it was signed off and design was directed as to what could and could not be included in the final outcome. Delays and inefficiencies were part of the process for this organisation.' (p. 937)

'Market research. Information from a variety of sources is required to identify market gaps, customer needs and to assess the competition. Design requires access to market research data in order to incorporate user needs into the product configuration (Leonard-Barton and Rayport 1991).' (p. 938)

'Top-level commitment. Top level commitment affected success. Support from a high level of seniority in the company ensured that resources were committed to the project, and that an executive was assigned the responsibility of pushing the product through. The cause of failure of British Rail’s Advanced Passenger Train, has been attributed to the lack of top level commitment and poor project management (Potter, 1987). In this case, it took eight years for a working prototype to be developed, which was inadequate. Eventually, after fifteen years, the whole project was scrapped and the team disbanded, with little result.' (p. 939)

'Case 1: FMCG-designing a new ‘indulgent treat’. Changes are occurring in the European chocolate market. Consumers are increasingly health conscious and attempt to eat healthily most of the time and then treat themselves to chocolate, or other food treats, at the weekend. Such changes in eating habits have opened up a new market gap in the area of indulgent, impulsive bite size chocolates for self-consumption. One major British confectioner had anticipated these changes in demand and, as a main supplier of boxed assortments, had to identify new growth markets. Consequently, the company invested approximately $12 million in a new plant to produce a range of products for the premium end of the countlines market, that of indulgent countlines. The shape of the chocolate bar, its taste and packaging all serve to reinforce the personality and individuality of the chocolate, positioned as an indulgent countline product, differentiated by its soft mint centre and appealing packaging. All aspects of the core product, packaging and advertising supported the image of the product. The first six months of sales were phenomenal, much higher than was ever expected and then the product settled into a leading position in the newly defined market of indulgent countlines.' (p. 942)

'Design process. Decisions about the shape, flavour, thickness of the chocolate bar was made within the product design team. This team consisted of about ten people brought to work on the product from R&D, Production, Marketing and from external advertising and design firms. Brand managers were responsible for ensuring that the product was developed and had to co-ordinate R&D, Production, Design and Marketing activities. Before resources were committed to product development, estimates were gathered from all those entailed and projections of sales and ROI for each year, over a five-year period were also made.' (p. 942)

'Various inputs were made into the product concept stage. Information was included about the target market, customer needs, and consumer needs, product concept, product specification, and packaging specification. The Brand Manager drew up a brief for the product concept which reflected these elements and articulated the rationale behind the product, its goals, the distinguishing features of the product, its price and so on. The written brief covered a number of factors, which are shown in Table 1.' (p. 943)

'Starting with R&D, chocolate bars of different tastes, shapes and textures were developed and tested. The Brand Manager along with R&D and tasters would try out the different products. Those selected underwent market research to appraise their popularity and the most attractive candidate was chosen. An advertising agency was commissioned to work on a strategy for market positioning that is price, promotion and distribution of the product. The core of the product’s positioning was its mint flavour, which differentiated it from other countline products. Production began devising moulds and carrying out feasibility tests for making the redesigned chocolate bars. A graphic design firm was commissioned to devise the packaging. The design team had a close relationship with the client and had worked effectively with them in the past. The ‘atmosphere’ was one where the external design team was regarded as part of the internal client team - ‘seamless’ interaction was the term used to describe this relationship. Also, the relationship was underpinned by trust and openness. In response to the brief, the design firm produced a ‘contact report’ which was their interpretation of the client brief and was based on the design team’s understanding of the target consumer needs and tacit understanding of what the client was looking for. These were expressed in terms of tactility of the pack, via a soft and matt outer card and a foil wrapper for the chocolate; its distinctive, pyramid shape to echo and reinforce the brand name; its colouring to impart a sense of indulgence, mysticism; as well as, the fresh mint flavour. The design team produced three different concepts based on their research, experience and vision and the client team agreed that one of the concepts ‘stood out from the rest’ to represent the product and communicate the brand values to the marketplace. The client team agreed that the distinctive packaging gave visual expression to the brand personality and reinforced its individuality and visibility. The design team worked closely with the client team, especially marketing to implement the design for market launch. This entailed information packs for distributors, point of sale material and other promotional material to support the market introduction of the new brand. Marketing and design worked in partnership to produce the ‘right message’ to the target consumer. The timescales for the different stages of the product’s development are shown in Table 1. Also, this shows the close interaction of marketing with design throughout the process from concept to launch.' (p. 943-944)

'This company was the world leader in the launch of laminate flooring, but over time, the competition in this area has grown fiercer. The focus of the company has been on the technical development of laminate flooring and sales to the trade, such as builders, interior designers and architects. Design was regarded as a functional activity and ‘icing on the cake’, rather than an integral strategic driver within the business (Perks and Cooper 2005). As the marketplace became more challenging with intense price competition, also the company’s product range began to lack lustre and be regarded as ‘too European’ for the global market, then the senior management decided to change focus and develop a design and marketing team. The vision was: ‘to become the highest brand recognised in the flooring sector’ in the mid to top level of quality and to achieve this positioning through offering an attractive collection. Also, promotional activities directed at consumers would help to ‘pull through’ the product to the marketplace. Consumer tastes had shifted and DIY had become much more akin to the fast moving fashion industry, so to reposition itself, the company had to consider consumer behaviour, trends and lifestyles and reflect these in its product ranges.' (p. 944)

'To achieve this change meant internal organisational changes to move away from technical and sales to embrace design and marketing. A design-led company means generating ideas and taking these from initial concept to the consumer and being able to predict trends and becoming more fashion aware, in order to move the collection away from traditional flooring products. A Vice-President of Global Design was appointed and she set about transforming the internal processes and structure of the company, as well as commissioning market research and investing in design to develop the product ranges. To stimulate the market, the company developed four distinctive collections and each of these was underpinned by lifestyle propositions relating to each theme. These ranges were launched globally with the expectation that particular styles would be more attractive to certain regions, than others. For example, Northern Europe would like pale, clean styles, whilst Southern Europe would show a preference for richer and darker colours.' (p. 944)

'A story-book was created for each lifestyle theme with images of each collection in different environments, such as home, office, restaurant, etc and with complementary paints, wall-coverings, furniture and accessories. This provided consumers with design ideas and gave them sources of inspiration to attract them to the collections. The story-book was a major communication platform to the trade and consumers and was the first time that a flooring company had begun to consider the consumer context for their products. Also, a design and installation service was provided direct to the consumer.' (p. 944)

'Design process To have design as a strategic function within the company required organisational changes. A ‘products to market group’ was established, to connect design, marketing and technology. This group manages the whole development process from: ? Concept development ? Presentation of business case to the senior team ? Sample launches to country managers' (p. 945)

'The multi-disciplinary group had the responsibility to identify trends and interpret these through product development. This group hosted workshops of regional sales and marketing teams globally to assist with the activity and then met with retailers to identify their views of customer needs and requirements. Retailers ensured that the timing of the product launch was correct to optimise product launch. Retailers have different launch dates based on their own seasonal calendars and so the flooring company had to fit in with these launch periods, on a global scale. Design consultants were also involved in this activity. The group’s overall remit was to: ‘deliver products that fit the market, guiding and directing the brand and reducing time to market.’ Technical input reviewed the products constantly to find areas of improvement, such as new gloss finishes. Where possible, patents were obtained to protect proprietariness and reduce risk of copying. This combination of technology push and market pull reduced time to market to 18 months and reduced the risk of failure. In this situation, design and marketing were partners. Both were involved in making decisions about design direction, market development and in the market research, development and implementation activities. This created a rich partnership that used the research, experience and vision of both marketing and design in a holistic manner – ‘two parts working together are better than each working independently’.' (p. 945-946)

'Case 3: Retailer. Background. The retailer has an annual turnover of ￡7 billion, employs 70,000 staff and operates 500 food stores nationally. The retailer has over 40,000 own brand lines at any one time, which represents half of the total lines (i.e. fifty/fifty split of retail own brands and manufacturer’s own brand, see Mintel 2006). All of the retail own brands have design implications, in terms of packaging, point of sale and promotional materials and the focus of the case is on these.' (p. 946)

'Design department within marketing. In this company, the design activity is the overall responsibility of marketing, as well as market research and branding, which are related activities. This is to provide a close synergy between marketing and design. Packaging Design Executives work as part of the Trading or Buying Teams and they report to the Design Centre, where an integrated design team work within the buying function. The Design Centre has a Design Manager, managing a virtual team within buying (Figure 7).' (p. 947)

'The design centre The Design Centre governs all the design projects within the Retailer. External design companies are sourced and inculcated with the company’s values to ensure that there is ‘strategic fit’ and a tacit understanding to be encouraged, so that design has a ‘good sense’ of what is right for the target consumers of the client. The idea is to have a ‘seamless’ approach within the team. The brief acts as a starting point for the design work and design is expected to develop a creative vision for the target market within the price and size constraints. A rosta of approved design suppliers is established and these may be used intensely for a given project, or intermittently for their specialist expertise and know-how. Agencies are managed by the Design Centre, which prepares design briefs and communicates regularly with the agencies to manage expectations and delivery for all parties. Given the high volume and constant throughput of products requiring design investment, organisation of design is pressurised and complex. The Design Centre has two arms: Packaging and Corporate. The Packaging. Design Manager’s role is …to ensure all our packaging falls within the corporate mission. Within design there are basic principles, design is built on consistency, our aim is to build a brand of repute that is instantly recognised across all its attributes. Corporate Design is broader in coverage to ensure that there is consistency across the usage of the corporate image.' (p. 947)

'Commercial impact of design. The Design Centre has a process that attempts to make the costs of design transparent and ultimately to justify the design expenditure. This is the Business Case Document. The Business Case (Figure 8) projects a scenario to the end result, including possible risks and return on investment. The business case analyses the impact of any new design initiatives, a projected sales uplift figure is put into the business case, the uplift figure depends on the project, whether this relates to store design or packaging design.' (p. 949)

'Design process. The design process is embedded in the new product development process, as shown in Figure 9. Design Executives and the Packaging and Corporate Design Teams are integrated with the retail teams. This process ends with a meeting to draw up a design brief between the buyer and the design executive.' (p. 949)

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