what marketers should know about design research

What Marketers

Dr Ekaterina Khramkova, Founder & CEORussian Design Research Consultancy Lumiknows

Should

AboutKnow

Design Research.

:: 17 April 2009, Design & Advertising Industry in Russia, Central House of Artist, Moscow ::

2. What is the essence of design research approach?

1. Why design research?

2©2009 Russian Design Research Consultancy Lumiknows

Why

DesignResearch?


To understand your customer as deep as possible.


needsdrivers

values

Its values, drivers, anticipations and needs.


Its day-to-day experiences and environment.6

But how aboutmarket research?!


So far so good…

About 90% of them fail

despite thorough and expensive

Harvard Business Review, 2005Marketing Malpractice

Every year brings 30,000 of new products.

research.market


Whydoes it happen?!


Transformation of

consumptionculture


Traditional

«BRAND - CUSTOMER»

relationships model

BRAND

• When brands had no difficulties with reachingtarget audiences and

• Launched products which had always found its customer

CUSTOMER12©2009 Russian Design Research Consultancy Lumiknows

is over.

13

Traditional

«BRAND - CUSTOMER»

relationships model

BRAND

CUSTOMER©2009 Russian Design Research Consultancy Lumiknows

Brands experience real difficulties with

1. «delivering» its messages to the customer,

2. obtained information into a successful product or service.

«delivering»

«synthesizing»


Let’s talk about the first part.


Brands experience real difficulties with

1. «delivering» its messages to the customer,

2. synthesizing obtained information into a successful product or service.

«delivering»

ABUNDANCE OF PRODUCTS


ABUNDANCE OF BRANDS


3000 – Number of advertising messages people are exposed to per day.

Justin Kurby & Paul Marsden, Oxford, 2006


90% – Proportion of people who can skip TV ads and who do skip.





80% – Market share of video recorders with ad skipping technology in 2008.



90% – Proportion of people who can skip TV ads and who do skip.




Now, how do you think, what is becoming

the mostfor Brand in its relationships with

valuable

Customer?


Attention.


of customerto your brand.

Attention



A wealth of information creates a poverty of attention.

Herb Simon, 1971

…Being able to capture someone’s attention at the right time is a very valuable asset.

Hal Varian, 2009Google’s Chief Economist,The McKinsey Quarterly,“Hal Varian on how the Web challenges managers”



Herb Simon, 1971

…Being able to capture someone’s attention at the right time is a very valuable asset.

Hal Varian, 2009Google’s Chief Economist,The McKinsey Quarterly,“Hal Varian on how the Web challenges managers”



Herb Simon, 1971

…Real competition no longer revolves around market share. We are competing for attention – mind share and heart share.

K. Nordstrom, J. Ridderstrale, 2002 Funky Business

Buthow to

attract an attention of

customer???

27

Very nice…

©2009 Russian Design Research Consultancy Lumiknows

http://www.flickr.com/photos/aknacer/2914095066/

Осторожно. МАГИЯ…


Magic #1.


If you are in need of an honestattention of your customer

…you should be honestlyattentive to him.

http://www.flickr.com/photos/aknacer/2914095066/29©2009 Russian Design Research Consultancy Lumiknows

Loyalty

Brand

Empathyhttp://www.flickr.com/photos/keesssss/109284197/ 30©2009 Russian Design Research Consultancy Lumiknows

Advertising is about selling stuff, but

creating values.


Branding is about

http://www.flickr.com/photos/keesssss/109284197/

Management will increasingly have to be based onthe assumption that neither technology nor enduse is a foundation for management policy. Theyare limitations. The foundations have to becustomer values and customer decisions on thedistribution of their disposable income.

Peter Drucker,Management Challenges for the 21st Century, 1999


Until recentrly:Whattechnical/organization/financial/manufacturingpossibilities fordesigning new productdo we have?(Technology- DrivenStrategy);

Now: How can we empathizewith our customer?/What shouldwe design to make ournew brand/productexperience meaningful and exciting? (Consumer-Driven Strategy).


You have folks marketing tomato sauce, forexample, who don’t make their own spaghettibut dine at fine Italian restaurants and havenot opened a jar of spaghetti sauce in theirown house in years.

Interview with Dev Patnaik, Author of Wired to Care: How CompaniesProsper When They Create Widespread Empathy, 2009



«synthesizing»

Brands experience real difficulties with 1. «delivering» its messages to the customer,

2. obtained information into a successful product or service.

Let’s talk about the second part.

Only four of them had managedto meet plan in terms of timing, functionality of new products andmarket share.

We investigated into fourteen largecompanies with an annual sales volume

from $500 million to $10 billion.

Harvard Business Review, 2007In search for new generation's product. 36©2009 Russian Design Research Consultancy Lumiknows

Only four of them had managedto meet plan in terms of timing, functionality of new products andmarket share.

We investigated into fourteen largecompanies with an annual sales volume

from $500 million to $10 billion. WHAT CAUSED

THIS?

37

Harvard Business Review, 2007In search for new generation's product.©2009 Russian Design Research Consultancy Lumiknows

It turned out, every time when in an NPD processdifficulties occurred,

Harvard Business Review, 2007

the roots of the problems could easily be found atthe stage of early planning, when thecompany had to decide

the new product will have.

what design


“The Fuzzy Front End of Innovation”

39

– Identifying customer needs;– Synthesizing the needs in the form of design brief.


http://www.flickr.com/photos/jurvetson/2542450115/

“The Fuzzy Front End of Innovation”

40

– 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

«Phase Zero»,

at which

customer needs are identified and interpreted is

the most dangerous

in new product development.


It is herewhere the main reason behind

new products

lie.failure


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

an innovative product idea.

Traditional marketingis good at analyzing

existing market ideas, but has problems with

generating


If I’d ask people what they wanted, they would have said a faster horse.

Henry Ford,Beginning of the 20th c.


If I’d ask people what they wanted, they would have said a faster horse.

Henry Ford,Beginning of the 20th c.

If you’d asked people what they wanted in a VCR, they might have eventually suggested something like “super-fast rewind”. … You might set out to create the fastest-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.


Companies have really big difficulties

customers needsto create a product customer will prefer despite

with identifying and synthesizing

an abundance of choice.


How tomore effectively synthesize

needs??

48

So what?..



Magic #2.


Shift from narrow defined customerto total human experience.

50©2009 Russian Design Research Consultancy Lumiknowshttp://www.flickr.com/photos/aknacer/2914095066/

Transformation of

consumptionculture


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.

54

Transformation of

consumptionculture


55

Transformation of

consumptionculture


and, as a result,

Fundamental changes in designer’s competencies.

http://www.flickr.com/photos/redgum/238095322/

New expertise of

designer:

CUSTOMER understanding

DESIGN BRIEF Synthesizing56©2009 Russian Design Research Consultancy Lumiknows

Purpose of

designresearch:

http://www.flickr.com/photos/redgum/238095322/

CUSTOMER understanding

DESIGN BRIEF Synthesizing57©2009 Russian Design Research Consultancy Lumiknows

Design in Technology program, University of Cambridge, Judge Institute of Management, 2004

Visual imagesBar charts & text

Integrated to design development teamDetached research team

Open ended dialogueClosed ended questions

Focuses on new possibilitiesFocuses on the “known”

Raw data (reality)Sanitized data (aspiration)

Identifies “user experience”Identifies “preferences”

Observe behaviours first handSelf-reporting of behaviours

In-contextArtificial setting

Design Research Techniques

Market Research Techniques


approach.

designresearch

The essence of


flickr.com/photos/bacillus/2743928941/

flickr.com/photos/myklmabalay/30178916

In the special way of seeing the situation

http://www.flickr.com/photos/mllemathilde/1428593831/60©2009 Russian Design Research Consultancy Lumiknows

flickr.com/photos/bacillus/2743928941/

flickr.com/photos/myklmabalay/30178916

http://www.flickr.com/photos/kiolero/745968385/

http://www.flickr.com/photos/theloser091/2186539998/in/set-72157606514104932/

through people’s eyes.

http://www.flickr.com/photos/firenzesca/2494845630/61©2009 Russian Design Research Consultancy Lumiknows

In the unique ability to work with ill-defined information


synthesizing new from chaos.


Despite an abundance of data, most

companies do a poor job ofpredicting the behavior of theircustomers. Even companies that take thegreatest trouble over their predictions arecorrect only 55% - a result that

Harvard Business Review, March 2006

hardly justifies the costs of having a customer relationship managementsystem in the first place…


Design research methods

Laura S. Richardson «Deconstructing Design», ITT, 2008. Sources: M3 Design, frog design, IDEO, Continuum, IIT, TU Delft, SmartDesign, Nokia and others.


The real art of discovery consists not in finding new lands, but in seeing with new eyes.

Marcel Proust


http://www.flickr.com/photos/kenilio/172744389/sizes/o/

You may use these ones…


«Panoramic View»

http://www.flickr.com/photos/_miss_lucky_/2579436279/http://www.flickr.com/photos/7539598@N04/3085177911/

But you would be better of using something like these.

«Wow! I see this for the first time in my life!»


Design research is about seeing things seen many times before in a completely new light.

http://www.flickr.com/photos/jo92/1659953189/


In other words, to see behind day-to-day

«usual life situations»

opportunities of creating new.

«of an average customer»


And this?


Thoughtless Acts? Jane F. Suri, IDEO

Or these?


Images from day-to-day “usual” life?


No, these are opportunities of creating thousands of innovative brands, products, services, based on real life customer needs.

http://www.flickr.com/photos/60538638@N00/2629847447/


Discovery consists of seeing what everybodyhas seen and thinking what nobody hasthought.

Albert Szent-Gyorgyi


http://www.flickr.com/photos/60538638@N00/2629847447/

Abundance of

opportunities.


Good news..

Сharles H. Duell, The commissioner of the United States Patent

and Trademark Office :

«Everything that can beinvented has been invented».


Сharles H. Duell, The commissioner of the United States Patent

and Trademark Office :

«Everything that can beinvented has been invented».


It was said in

1899...

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…


Laura S. Richardson, «Deconstructing Design», ITT, 2008.

81

Launching newproducts and servicesis the No.1 driver ofrevenue growth;

By 2010, productsrepresenting morethan 70 per cent oftoday's sales will beobsolete due tochanging customerdemands andcompetitiveofferings.

Deloitte Research, Global Manufacturing Study©2009 Russian Design Research Consultancy Lumiknows 82

Customeris ready to these figures…

Is your brand prepared to them??



Are you ready to empathize with your customer?

Do you have enough expertise to understand his/her total human experience??


but createmeaningful

values for them?

Is your brand ready to not just sellpeople your

product,


Thank you for your time.


www.designresearch.ru

Dr Ekaterina [email protected]


flickr.com/photos/mllemathilde/1428593831/

what marketers should know about design research

Business

united states

harvard business

justin kurby

annual sales

fuzzy front

information

synthesizing

customer understanding