Scholarly Insights: AMA’s digest of the latest findings from marketing’s top researchers
In the past decade, design has gone from a company activity to a strategic priority and a source of competitive advantage. A simple Internet search of “product design excellence” reveals dozens of awards, such as those by the Industrial Designers Society of America and the Medical Design Excellence Awards.
If you’re anything like me, your first thoughts of “design” might veer toward what you can see – the visual appeal of a product. Certainly, what is referred to as “form design” gets our attention – and it is certainly a motivating factor for some consumer segments. There are going to be some people who want that leaf-shaped and bright green colored couch even if it’s not the most comfortable seat in the room.
But design is much more than this. Research and our own experience reveals two other very important dimensions. First, there is “function design,” which refers to how well a product fulfills important utilitarian needs of consumers. Second, there is “ergonomic design,” which refers to how easy and comfortable a product is to use.
Dyson vacuum cleaners, for example, while having an unusual look, have really established themselves on their differentiated design for function and ergonomics. Dyson vacuum cleaners, for example, have exceptionally strong suction without the need to clean or replace filters. In addition, design elements such as self-adjusting cleaner heads and ball technology make it easier to clean different surfaces and maneuver around sharp corners.
As firms look more and more to design as a strategic capability, it is important to consider how the different types of design work together to impact bottom-line results. Is more always better or is there a point of diminishing returns? Do different types of design excellence reinforce one another or is it better to set priorities for one or another?
Research on Design Strategy
In a forthcoming Journal of Marketing paper, “Designed to Succeed: Dimensions of Product Design and Their Impact on Market Share,” the researchers investigate these questions using a sample of automotive brands in the US light vehicle industry.
Looking at data for 33 brands (from Acura to Volvo) across 22 vehicle categories (e.g., low price small cars, large-size pickups, etc.) over a six-year time period, the researchers analyzed how consumer ratings of form, function, and ergonomic design drawn from JD Power’s consumer ratings impacted vehicle market share, calculated based on sales figures reported in Automotive News.
To rule out alternative explanations, the research team made sure that any impact of design on market share was beyond vehicle price, advertising, dealer share, brand, category, and even professional and consumer quality ratings.
The analyses revealed that, on average, higher function and ergonomic design lead to higher market share. In fact, the analyses revealed that having a design rating one standard deviation above average would translate into a $50 million market share gain. In contrast, form design did not have a significant impact on market share, on average.
Perhaps more interesting, however, is what the research reveals about how the three distinct design dimensions interact. Function and ergonomic design are supportive of one another. An increase in function design has a positive impact on market share at high levels of ergonomic design, but no impact at low levels of ergonomic design. And vice versa.
In contrast, an increase in form design only leads to market share gains at low levels of either function or ergonomic design. When either of the other types of design is high, increases in form design lead to losses or no gain in market share! (The opposite is also true: increases in either function or ergonomic design only lead to market share gains at low levels of form design.)
How Firms Should Strategically Invest in Design
The results suggest an important strategic design trade-off for companies. As the authors conclude, “Firms can either design for satisfaction by meeting utilitarian needs on both function and ergonomics, or design for delight by delivering on form and meeting the hedonic needs of consumers.”
More than that, the results indicate that firms should either design for satisfaction or delight. They should either invest to be a leader in form design along with good enough function and ergonomics or they should invest to be a leader in function and ergonomics while delivering good enough form design.
It is costly for a company to invest in designing for both utilitarian and hedonic needs of consumers. Such products are likely to exceed customers’ willingness to pay, which is why market share may actually decrease as both types of needs are satisfied by design. They are over-designed from a consumer perspective.
In contrast, the results indicate that a company should make simultaneous investments in both function and ergonomic design. The market share of a high performing product is undermined when it is not easy or comfortable to use. In the same way, a product that is easy to use will not reach its market share potential when function is not exceptional as well.
Read more from Lance:
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Lance A. Bettencourt is Associate Professor of Professional Practice in Marketing at the Neeley School of Business at Texas Christian University, and author of Service Innovation: How to Go from Customer Needs to Breakthrough Services.