Product design and specifically product shape and ‘looks’ have long been identified as factors that may contribute to product value and new product success. Design of products evokes both cognitive and affective responses in the mind of the observers and this can be used to tailor a more attractive product proposition.
While a lot of excellent research has been conducted on the positive effect that industrial design can have on the perceptions of customers about the product functionality, embedding issues like utility, safety and comfort, the importance of the perceived value by a customer on judgements about product elegance and social significance have not been extensively studied until recently. reference
In this thesis I am trying to test whether Yes please soup pot design not only communicates to the potential customer a series of qualitative attributes about its content, i.e. quality and healthiness, but also triggers positive emotional responses on the perceived beauty and difference with similar products and that can be leveraged by the company to command a price premium
2 NEW PRODUCT DEVELOPMENT AND PRODUCT DESIGN
New product development processes are the subset of standardized procedures that companies use to manage the new product project phases that lead to the launch of new products in the market.
The objective of these procedures is to implement a systematized approach to ensure the potential of new projects based on their financial and development feasibility while maximizing the value of new products as perceived by its target customers.
2.1 What is industrial design
Industrial design is the set of activities within new product development processes that deal with optimizing the functionality and appearance of a product to maximize its value for both consumer and manufacturer (1).
The ultimate objective of a product design is thus to align the set of attributes embedded within the product with the target customer preferences and to implement them in a way that they are actually perceived and valued by them. In order to achieve a successful design and implementation, companies engage in direct market research to elicit the target customer segment implicit and explicit needs (‘the voice of the customer’) and align those with product attributes, using techniques such as Quality Function Deployment (QFD) which systematically links the needs the product must satisfy with technical specifications while also prioritizing them based on the level of importance to customers.
At the same time, the identification of the customer segment preferences and the mapping of those within a perceptual map, comparing how well different products in the market fulfill the identified needs, allow for the design of specific product propositions that no other product does and thus achieving a unique positioning and successful product differentiation.
The dimension of product design has been recognized by several authors (Cooper, Trueman) as being critical to the ultimate success of the launch of new products.
The focus of design development is centered around the efficient implementation of the product features, ergonomics and quality form to maximize its utility to users, while at the same time embedding it with a pleasant appearance that is able to communicate positive attributes that contribute to the ultimate value proposition. (3) (4)
Trueman: “Design has the facility to improve product reliability and quality standards thereby raising the perceived value of goods and services in the eyes of the customer, allowing companies to increase profit margins”
As Trueman estates (6), A value proposition must successfully integrate a product within its own environment by combining and merging coherently the “different attributes, aesthetics, price and quality so that they are aligned similarly and reinforce each other”.
Although mistaken by artists that only worry about the visual appearece of a product, or styling, successful industrial designers are able dig into such fields as engineering, Materials science, manufacturing, and marketing to embed new products with a set of attributes directly influencing new product success in the market.(2) (3) (4) (5) (6). Ultimately, the design of an object is “the specific configuration of elements, materials and components that give its particular attributes of function, shape etc. and determine how it is to be made and used”. (13)
By embedding the design dimension into the processes, companies ensure that the final value proposition is increased as it contributes to the perceived value by the customer. A successful design increase the perceived quality of a product, ensures that is aligned with market and regulatory standards and thus increase the odds to satisfy customer expectations.
A consistent Design strategy in new product development processes also contributes to build a product and company image and helps to pull together the dimensions of company identity with branding and promotion (Trueman).
Also, by taking the design dimensions early on the NPD projects, companies can reduce the final time to market and product costs by simplifying the manufacturing processes and reduce the final costs of fabrication.
2.2 The contribution of Industrial design in the final product value proposition
There are many design attributes that can be embedded into new products, roughly separated within ergonomics and aesthetics, being the former more related to the experience of using the product, while the latter is focused into the experience of seeing the product. Aestethics, embedding all product parameters that determine the way the product look, are a an essential element of the purchasing process since customers base their preference on products by the subjective perceptions elicited by the product on the potential benefits it can provide.(7)
In that line, the Lens model first introduced by Brunswick (?), states that the potential customer makes a mental bundle of the information it receives about the product and from there triggers a set of perceptions that will ultimately lead to a set of preferences and choices.
The ways a specific design can lead to a positive perception and thus to a choice of preference vary and are entangled with other sources of information the customer receives and which align the propostion to the customer already decided preferences.
The perceptions that a product can evoke are immediately related to past information received and allow the person for example to relate it to a certain corporate and brand identity, a process that many companies have followed by implementing a sustained design strategy on their products. Brand identity allows to ultimately link the products observed to perceptions on company values and overall level of attributes of the products and has been used as means of effective product differentiation. (9) (10).
In different industries, companies tend to emphasize different attributes in their communication to be aligned with their specific company positioning and customers most importance preferences, like tastiness and safety in the food industry and reliability and environment friendliness in the car industry.
The physical form of a product has been researched to have an important impact in the way customers judge it and has ultimately a strong correlation effect with the final product success in the market ().
As Bloch (10) states “the physical form or design of a product is an unquestioned determinant of its marketplace success. A good design attracts consumers to a product, communicates to them, and adds value to the product by increasing the quality of the usage experiences associated with it.”
2.3 Which financial benefits can it provide
Companies with an effective industrial design strategy achieve better perfoming products in the market in terms of several financial indicators as return on assets, return on sales and higher profitability, which can be linked to both the design differentiation factor as stated previously by Porter in the famous book Competitve strategy (1980) and to reduced costs due to more efficient use of materials and manufacturing processes. (14)
Also, the study of Roy (13) in 1993 on 221 small and medium sized UK manufacturers which received a government subsidy to promote the active use of industrial design in the development of new or improved products showed that 60% of all projects and 90% of the implemented ones were commercially successful and profitable with payback periods averaging under 15months, which show that the effective strategic approach to include design in new product development processes can be implemented in firms of different sizes.
Bloch in his research also collected previous studies that linked new product financial success factors with the inclusion of design as an inherent part of their NPD processes. He identified in a survey of senior marketing managers that, design was mentioned as “the most important determinant of new product performatice by 60% of respondents” by ” only 17% considered Price most important” . Also and based on the work of cooper on the analysis of the performance of 203 new products identified that product design was the most important determinant of sales success . Most interestingly for the case of Yes Please foods product, which as will be explained later chose specifically a designer for the pot based on his previous award winning record, Some research has identified that the receipt of design awards is positively associated with profit margins above average and sales growth (Goodrich 1994; Roy 1994).
3. The purchasing process and the visual effect of a product design
The ultimate act of purchasing occurs as a result of a complex mental process where the information received is analyzed and weighted as per to measure to which extend the product satisfies the needs of the customer.
A general categorization of customer needs has been frequently compared with the Maslow hierarchy of needs which states that once most basic requirements have been satisfied by a product, the emphasis on a customer shifts to satisfy other more intangible needs related to symbolic and aesthetic attributes.
As a result of this the purchasing process is triggered by the fulfillment of the requirements for the intended use of the product but also by the satisfaction of more intangible needs like status, elegance or social significance.
In order to understand the ultimate behavioral response of a customer triggered by the visual appearance of a product it is critical to assess the cognitive and emotional processes that result from the act of observing the item under evaluation.
The cognitive processes take place when a customer uses his visual senses to observe the product and perceives certain information which mentally organizes to make some judgments about its attributes and which are influenced by previous visual references or similar product stereotypes, which suggest familiar usages of the product and ultimately help the observer to interpret the signals received.
It has been described a number of different approaches on how to categorize the judgments that a customer does based on the perception of a product observation. Crilly (?) has summarized all previous approaches and identifies a total of three main categories of cognitive responses to product appearance: Aesthetic, Semantic and Symbolic.
From those three, the semantic interpretation, the mental inferences that an observer does to judge whether a product is capable of performing the tasks for what is intended for, is the only processes where the tangible attributes of the product are assessed. During this process the practical qualities of a product like function, performance and efficiency are analyzed and mentally compared with other references to judge the utility a product will offer to the observer. In this category I include the information that is gathered by the customer when obtaining information from reading the label and which is directly processed to identify the physical attributes of the product. The emotional responses following this cognitive process are then aligned to assess the instrumental utility of the product which ultimately lead to satisfaction, when fulfilling the expected requirements, and dissatisfaction when the product is not fulfilling them.
The two other described cognitive processes are used to identify intangible attributes of the product that may or may not be perceived as valuable for the customer depending on a number of different factors, like current ‘positioning’ within the Maslow hierarchy of needs, consumer’s cultural context and personal characteristics.
The symbolic association is the cognitive response that attaches to the product some socially determined symbolic meaning. During this process, as series of values are realized to be attached to the product and assumes that others must also associate them with it. As Crilly states ‘This culturally agreed meaning will allow the customer project a desirable image to others, express social status or communicate its personal characteristics through it’. Examples of intangible values that can be associated to the product through symbolic meaning are exclusivity as the identification with certain economic status and environmentally consciousness.
Finally the aesthetic impression comprises all cognitive responses that are directed towards a perceived judgment of elegance and beautifulness. Even if still there is no unanimous consensus on what comprises beautiful objects, the perception of aesthetic attraction triggers positive emotional thoughts on the customer and contribute to attaching value to the product observed.
3.2 The Aesthetics Dimension
As researched by several authors (?) the definition of what makes an item beautiful or aesthetically pleasant is not conclusive.
It has been described though that cultural and social forces have an influence in the preferences for specific forms. Specifically, it has been described that a specific culture values and preferences may influence the acceptance of a particular style. Also seems to be proven that cultural norms may overwhelm an individual inner preferences and help shape its perceptions towards the acceptance of a specific design form. (blaich, Bloch)
Thus, and although cross cultural differences stay in the way of having an unified view of what can be considered as aesthetically pleasant, the current era of advanced information technology is working towards unifying the concepts that influence the perceptions of the soft values within a product design and thus working towards a more globalized and uniform set of criteria.
The cognitive processes described triggered upon the observation of a product lead to a series of emotional responses that will ultimately lead to the final decision on the purchasing process, being the most important the attraction or disgust towards the aesthetics, the satisfaction or dissatisfaction towards the fulfillment by the product of instrumental requirements for its use, the surprise or indifference based on the perceived product novelty and the admiration or indignation towards social significance.
4. DESIGN IN THE FOOD INDUSTRY
In the food industry, Tauber (8), collected through extensive market studies an exhaustive set of problems related to food products. By doing so, he was trying to identify potential opportunities for new products while also providing with a thorough analysis of the basic needs to be fulfilled by this kind of products. From that list it can be identified a series of attributes that the product under study is fulfilling and thus achieving a specific positioning. Some of them, like low calorie content, convenience of transport and preparation and adequacy of the serving size are efficiently communicated through the information contained in the label. Others like healthy, tasty, and high quality can only be perceived by the customer through the design of the pot and label and by some previous information it might have received.
Moreover, as Berkowitz researched, the shapes and images that have a more natural looking are associated with products that are fresher, taste better and have a better texture, and are ultimately more preferred by customers. At the same time, he found that aesthetic appealingness of the product, defined by bloch (10) as ” the ability to evoke positive beliefs, positive emotions and sympathetic with consumer’s aesthetic tastes”, and by Crilly (11) as “the sensation that results from the perception of attractiveness (or unattractiveness) in products” was not of any specific interest to food products customers.
5. The Yes Please! Foods Company, products and market
The trigger for the writing of this thesis has been evaluation of the influence that the design of the Yes Please! Foods soup product packaging may be having in its market performance. Yes Please Foods is Germany based company that entered the chilled organic convenience food German market in 2007. Although belonging to the generally mature food industry, both the organic and convenience sub segments have been growing at an average rate of 12% in the period 2003-2008 in Germany (15). Yes please foods can be considered to be positioned in the Premium priced range of offers within the segment as its Price its on average 33% more expensive than that of the competitors. The company started its operations in the Berlin area and has been enjoying a high growth rate in volumes sold ever since (the actual numbers can not be disclosed in this paper as they are covered by a confidential disclosure agreement). The company is currently planning to expand its operations throughout Germany and is about to close its first round of external financing.
Based on the information provided by the company, it is know that the customer profile of this kind of products is that of mid to high educated people, working full time, with ‘above average income’ and health conscious. It is inferred from the information provided by the company that the product is intended to fulfill the need of high quality healthy food that can be prepared and ready to serve within a short period time frame. The motto of the company portrays this positioning of healthy convenient to prepare food for customers that do not want to spend time in the kitchen as “good food for busy people”
The design of the pot, as explained by the company owner and general manager, Gemma Michalski, was the central part of their strategy to build a company identity and resulted in one of the biggest expenditures incurred during the initial company launching. The design was commissioned to Willimas Myurray Hamm from London which used the artwork of Berlin based illustrator Martin Haake. As explained by Ms Michalski, they were specifically chosen to perform the design task because of their previous record of award winning product designs that resulted in highly successful products in the market. (16)
6. Use of conjoint analysis to elicit the importance of attributes in the eyes of the costumers
The first part of the field study I am going to conduct has been designed to measure a the potential correlation between price and design in the final willingness to pay expressed by respondents. Also I shall use the results to mesure the relative importance of each, for the whole of respondents and for potential segments I shall identify within the sample of respondents.
The technique used, an empirical marketing research using conjoint analysis, was first introduced as an effective marketing tool during 1970’s and has been validated as an effective means to identify the most relevant features of product, its key design attributes, and the degree of importance that customers attach to them. (17) The usefulness of the tool is extended by the ability to sort the answers from respondents to some specific criteria which allow eliciting the kind of different features preferred by different segments of consumers within the same market.
At the heart of the technique, consumers are asked to rate as per their own preferences a number of different product prototypes that are embedding different features and levels of features. By doing so, the customer is making choices and trade-offs from those multi attribute alternatives based on the overall perceived utility or value of the product under evaluation. The statistical treatment of the data, using a multiple regression model, allows quantifying how much each of the single attributes is affecting the overall value of the entangled set of properties, as it is assumed that consumers have an implicit utility value for every single one of them.
The first part of the technique is normally a consumer attitude survey were the general attitudes of the consumer towards the product are collected. One of the main outcomes of this part of the research is to determine which features of the product are relevant for the consumers.
The aim of this first part is typically to find out why the products are purchased, which use they make of them and their attitudes toward them. Once the information is collected allows the design teams to elicit which features of the product seem to be more relevant for the customers and allows to potentially determine needs that still unresolved or problems existing with current products in the market. In this thesis I have overcome this phase since this part of the research is aimed at determining which physical features of the product are relevant, whether the focus of this thesis is aimed to the ‘soft’ values attached to physical appearance. Thus, by assuming that the current most important features of the product for the target customer segment are actually satisfied by all products in the study, I have been able to focus any significance preference in the actual aesthetic value of the product and its potential relationship with the price they would be willing to pay. In order to communicate to respondents that all products evaluated had exactly the same features and were only differing in design and price, the following statement was introducing the questionnaire:
‘The products you are going to see are all soup products. They contain just natural organic ingredients without any conservatives and must be kept in the fridge. The portions are all 500ml’
Generally, The second part of the conjoint process uses the information gathered to determine the whole set of attributes that define all of the existing products in a market and introduces new ones to test their acceptance by consumers. Also, different levels for each attribute are defined to obtain a meaningful representation of the different ranges within each attribute that are or could be available in the market.
In order for the research to be significant, prototypes having different combinations of levels of all attributes have to be created to be ranked in preference by consumers. Typically, and due to the large number of possible permutations of attributes that can be created, a smaller sample is chosen to facilitate the consumer research study. It has been shown that eliminating combinations through an experimental design called orthogonal arrays or through judgment (those that are not possible physically i.e. by cost or conceptually i.e. by design), has no significant effect on the final outcome of the study (18)
Since the research to be conducted for this thesis is aimed at identifying any preferred designs for a soup product and potentially monetary value attached to specific product appearances, I have chosen to study two sets of attributes, design comprised by the three levels, ‘picture of natural ingredient’, ‘artistic draw’ and ‘no draw’ and the attribute price, also with three different levels: ‘€ 1,99’, ‘€ 2,49 and ‘€ 2,99’. Due to the small number of total possible combinations (32), the empirical survey shall ask respondents to evaluate all possible combinations.
The rationale for choosing these type of designs has been based on previous literature on shape and images in food products (Berkowitz) and the need for the actual inclusion of the design of the Yes Please Food product to test its hypothesized perceived value on the design. The third design included ‘no draw’ has been arbitrarily selected hypothesizing it to be a representative sample of an unaesthetic design.
The three price level selected have been chosen on the basis of actual prices of products in the market for the ‘picture of natural ingredient’ (€2,49) and ‘artistic draw’ (€2,99) designs, while the third level price has been arbitrarily selected to represent a low price level within that attribute.
The third part of the procedure gathers a meaningful sample of the product consumers and asks them to rank the different prototypes (combinations of the different levels of the selected attributes) based on their preferences. The aim of this part is to gather the structure of consumer’s preferences for different product features. In this part is important to define the question to be asked properly so it collects the opinion on consumers about the perceived value they attach to each specific product proposition. In my research I have chosen the sentence ‘from 1-7 how likely would you be to buy this product at the stated price’.
One of the benefits of conjoint analysis is that it is able to achieve statistical significance on the results with a relative small sample of respondents. The aim of this research will be to achieve at least 33 respondents in order to be able to make some inferences about the direction of the proportional influence that design has in the final monetary value of the proposed prototype, being that either positive or negative.
One of the limitations of my study shall be that the random sample of respondents to the questionnaire shall only be validated as actual consumers of soup products by one of the questions in the demographic profile, ‘ do you like soup?’ that is embedding three possible answers: ‘ no’, ‘sometimes is ok’ and ‘love it’. It shall be assumed that a positive answer to this question (all possible answers but ‘no’) allow to make inferences about their potentiality to be consumers of the product. That limitation is affecting jus this part of the study were the research is trying to elucidate whether design has a relationship with willingness to pay.
For the second part where it will be researched the consumer’s perceptions about intangible attributes of the design, it will be assumed that cultural context and general profile of the respondents is similar to that of the consumers of fresh soups as explained before in the Yes Please Foods product and market chapter of this thesis.
A segmentation of the respondents by any kind of useful criteria like demographics, type of usage, attitude towards the products etc will also allow to identify the preferred attributes for each type of customer segment.
The final part is the statistical treatment of the results that tries to identify which attributes are preferred by consumers and which are considered to be of more relative importance to them, and thus to the final value of the product proposition.
The objectives of the experiments executed were designed to validate and refute previous research about the influence that design have in the purchase decision making process and to elicit specific findings about the design of the soup product of the sponsor company Yes Please! Foods.
In the first experiment, the objective is to validate whether a series of qualitative attributes about the product can be inferred from the customer just by looking at the design, specifically the respondents are required to rate each of the three designs as per their perception on how they consider them to be ‘healthy, ‘fresh, ‘of high quality’, ‘different’ and ‘beautiful’.
One of the objectives of this part of the experiment is to validate the hypothesis that the design of the pot of the Yes Please! Foods soup product has is somehow original that can be clearly differentiated from that of the competitors and that is considered to be an aesthetically pleasant design.
Another objective of this part of the research is to validate previous research like that of Berkowitz (9), Bloch (10) and Trueman (6) which asserted that in mature markets, product form is one way to gain consumer notice and achieve a clear product differentiation.
By assessing the responses about the attributes quality, freshness and Healthiness, it is pursued to validate the research of Bloch (10) and Nusssbaum (?), which stated that exterior appearance of a product is an important channel to communicate information to consumers, that Product form allows to generate inferences regarding other product attributes. Also this experiment will help to validate the research from Berlkowtiz () which found that natural shapes displayed in the packaging of food products help consumers to make assumptions about the product as being more fresh healthy and of higher quality. Finally I intend to validate the research of Trueman (6) which found that products that are considered to have a good design (which I shall relate to the weight of the responses on the attribute ‘beautiful) are considered to be of superior quality, by checking whether products to be considered ‘beautiful’ on my research are also considered to be of ‘high quality’.
The inferences that I will try to make with the results of the second part of the research, a conjoint analysis of 9 different prototypes which result from the combination of three different design styles and three different sets of prices, will be dependent upon the results of the first part. If during the first experiment I am able to proof that some of the three designs are considered to be significantly more ‘beautiful’ than the others, I shall be able to validate with the results of the second experiment are aligned with the results found by Bloch. Kotler and Nussbaum when they found that given two identical products in terms of features and price, the one with the most beautiful design is preferred by respodents.
At the same time I shall try to validate whether a product considered to be more ‘beautiful’ can command a higher willingness to pay, which is stated in the survey designed as the likeliness to buy the shown product. If that is proven to be the case, I will try to identify the reasons why those customers would be willing to spend more in such product by relating it to their perceptions on the other attributes of the same product, either being the subset of attributes regarding product utility, (higher quality, more natural or more healthy) , the subset of aesthetic attributes (more beautiful, more different) or both.
Finally I shall use the results of the second experiment to validate the research of Berkowitz which found that products with natural shapes tend to be considered more natural, and healthy. I shall do this by specifically analyzing the results of one of the chosen designs which portrays a picture of a natural tomato on the label. Also I shall try to refute the findings of the same author which found in previous research that attractive designs where not of any specific interest to consumers in terms of aesthetic appeal.
The survey will be send to all recipients of the address domain email@example.com, for which I expect a random sample of respondents within the employees of ESMT and all recipients of address firstname.lastname@example.org, for which I expect a random sample of ESMT MBA 2009 students I believe this sample shall be repre