John Pribble III -- Strategic marketing, branding and design management

Design and Marketing Strategy
Design can be a powerful tool for managers to use in making and selling products or to develop an effective working environment, or communicate with consumers, shareholders and employees (Gorb, 1990). Like advertising or public relations, design is a tool managers can choose to use, or not. All companies use design to some extent, but only some use designers appropriately. Effective, high-quality design is always done with consideration for the other elements of the marketing process, and not as an isolated, arbitrary process. In good design, each decision reinforces, and is reinforced by, other marketing decisions (Caplan, 1982b).

Design creates satisfaction for consumers and profits for the company and is essential to strategic marketing planning. ''The marketing process consists of analyzing marketing opportunities, researching and selecting target markets, designing marketing strategies, planning marketing programs, and organizing, implementing, and controlling the marketing effort" (Kotler, 1991, p.63, italics added). Marketing strategy is defining the target market in which the company will compete and the positioning of products and services to satisfy consumers' wants and needs (Urban & Star, 1991). Product differentiation is when the "product offering is perceived by the consumer to differ from its competition on any physical or nonphysical product characteristic, including price" (Dickson & Ginter, 1987, p. 4). A product differentiation strategy is the "alteration of perceptions so as to result in a state of product differentiation" (Dickson & Ginter, 1987, p. 4). The product difference must be perceptible and meaningful to the consumer for it to have a differentiating effect.

Companies seek differentiation through "product features - some visually or measurable identifiable, some cosmetically implied, and some rhetorically claimed by reference to real or suggested hidden attributes that promise results or values different from those of competitors' products" (Levitt, 1980, p. 83). Jack Trout and AI Ries, the instigators of the positioning era, comment on its importance to marketers, ''There are too many products, too many companies and too much 'noise' in the marketplace. To succeed in our over-communicated society, a company must create a 'position' in the prospect's mind" (Trout & Ries, 1972 p. 3). To cope with the proliferation of marketing communications, consumers "keep track of the information" by ranking products categorically in their minds. Design aids in this process by providing information to consumers, either in absolute terms or in relation to competitors' products, to help them perform categorization (Trout & Ries, 1972). This is why design is especially important, because its primary function is to understand problems from the consumers' point-of-view, then translate those needs into benefits designed into the product and communications, and relay that information back to the consumer.

Identifying and targeting consumers isn't getting any easier as they begin to express new attitudes of individualism (McKenna, 1988). To satisfy consumers, organizations must change the way they've traditionally designed, produced, marketed, and sold their products. Marketing consultant Regis McKenna (1988) states what this means for companies:

"More options for goods producers and more choices for consumers. Less perceived differentiation among similar products. Intensified competition, with promotional efforts sounding more and more alike, approaching "white noise" in the marketplace. Newly minted meanings for words and phrases as marketers try to "invent" differentiation.

Disposable information as consumers try to cope with information deluge from print, television, computer terminal, fax and satellite dish. Customization by users as flexible manufacturing makes niche production every bit as economic as mass production. Changing leverage criteria as economies of scale give way to economies of knowledge - knowledge of the customer's business, of current and likely future technology trends, and of the competitive environment that allows the rapid development of new products and services. (p. 89)

In his article "Marketing is Everything," McKenna (1991), says that "Marketing's
ultimate assignment is to serve customers' real needs and to communicate the substance of the company" (p. 70). Designers help business by "acting as the aesthetic and humane conscience of industry" (Graham, 1979). Amidst the deluge of advertising messages (McKenna counts 3,000 per person, per day) consumers are unable to remember which ad pitches which product, much less what differentiates one product from another. Marketers need to improve the quality of information contained within their products; make them more useful, more convenient or more entertaining. What customers want from products is "often qualitative and intangible; it is the service that is integral to the product. Service is not an event; it is the process of creating a customer environment of information, assurance, and comfort" (McKenna, 1991, p. 77).

Trout and Ries (1972) say that to cope with change, one should take a long-range view of the situation. Marketing people fall short here - they often think of their customers in terms of "percentage points" and concentrate on selling instead of satisfying the consumers' wants and needs for long-term success. McKenna calls this a "market-share mentality," and this translates into the marketplace as short-term tactics (coupons, gimmicks and promotions) instead of concentrating on long-term goals (growth, positioning, product leadership and corporate image development).

Many companies are experiencing the intense service and price competition mentioned by McKenna, and it is driving down profits. In this situation, one of the few hopes companies have to stand out from the crowd is to produce superiorly designed products for their target markets. Marketers pay considerable attention to product functioning, pricing, distribution, personal selling, and advertising, and much less attention to product, environment, information, and corporate identity design. (Kotler & Rath, 1984, p. 16)

Many marketers have yet to realize the value that design adds to their products
and companies and see it as a frill and not as a strategic tool. Kotler and Rath (1984) provide the following as typical of many managers' attitudes toward using design:

Steven Grant, an entrepreneur, visited one of the authors and described a device he was developing called the Fuel Brain, which monitors room temperature and controls the heating and air circulation functions of oil furnaces. When asked whether he would use professional design services to assist in this venture, he said there would be no need. His engineer was designing the product. His next door neighbor was designing the logo. His marketing officer was designing a four-page brochure. The Fuel Brain would not need any fancy packaging, advertising, or general design work, because he felt that the product would sell itself. Grant believed that anyone with an oil burning furnace and a desire to save money would buy one. A year later, upon being re-contacted, he sadly explained his disappointment in the sales of the Fuel Brain. (p. 16)

In addition, Kotler and Rath (1984) say, "Well-managed, high-quality design offers the company several benefits. It can create corporate distinctiveness in an otherwise product- and image-surfeited marketplace. It can create a personality for a newly launched product so that it stands out from its more prosaic competitors. It can be used to reinvigorate product interest for products in the mature stage of its life cycle. It communicates value to the consumer, makes selection easier, informs, and entertains. Design management can lead to heightened visual impact, greater information efficiency, and considerable consumer satisfaction. (p. 17)

Colin Clipson (1990a), a leading proponent of design management adds that,
"All outcomes of design are imbued with some symbolic or emotive content; this applies equally to a product, a building, a communication or a service.... In consumer personal products the emotive content is high, while in industrial goods it may be much lower; however it is always present" (p. 1(0).

An example of using design correctly as an integral part of the product to satisfy
consumers' wants and needs may be seen in the Ford Motor Company's recent history. Living with the heritage of Henry Ford, who made the infamous proclamation that buyers of the successful Model T could have "any color they wanted as long as it was black." Ford found itself losing desperately - $3.3 billion in losses between 1980 and 1982 - to General Motors and the Japanese imports in the battle for market share (Bowles & Hammond, 1991). Detroit never made the transition from "selling what we make" to "making something that people really want" (Lorenz, 1986).

Christopher Lorenz (1990), management editor of The Financial Times and author of The Design Dimension: the New Competitive Weapon for Business, recounts that Ford's cars used to look "characterless and utterly nondescript" (p. 136). Ford then made a bold move and literally "bet the house" on a new philosophy of integrated design and quality. Ford broke away from the conservative design which had characterized their cars for the last 20 years (since the introduction of the revolutionary and wildly successful Mustang) and introduced the Taurus, the most successful American auto since the fabled Mustang (Powell, 1987).

Lee Iacocca (one who should know better, since he was the ''father'' of the Mustang) dismissed Ford's new aerodynamic direction as "the jellybean look." General Motors executives felt the aerodynamic direction would fail because it was too extreme, and said so publicly. Ford leaped from the "brink of disaster" to the most profitable car company in the world based on this new philosophy (Powell, 1987). The success of the Taurus was much more than a styling job, however. Donald Petersen, Ford's president who deserves credit for the transformation, made several revolutionary changes in corporate structure and strategy to accomplish this huge feat. In corporate structure, Petersen brought together product planners, industrial designers and engineers for the first time into product teams, whose stated goals were:

To create a world-class car, with quality second to none - either
foreign or domestic.
The customer would be the focal point in defining quality.
Product integrity would never be compromised.
To accommodate the first three objectives, the team at the very beginning had to involve people from both "upstream" and "downstream" in the car-making process: that is, from the CEOs office to the design studios to the end of the assembly line - and even beyond, to the supplier, the ad agency, the dealership, and ultimately the customer. (Doody & Bingaman, 1988,p.45)

The change that had the most impact was moving a large part of the corporate
design staff into line management roles under the Ford North American product development structure, where they had much greater influence and impact on design decisions. In marketing strategy, Ford moved away from its traditional production and sales-led thinking toward ''true'' marketing, where consumers' wants and needs would determine the products the company would produce. Styling (adding strips of chrome and wood grain) had been replaced by an integration of form and function. Since then, the Ford Escort has become the number one best selling car in the world, and the Ford Taurus is about to take over the best selling car in America spot from the Japanese produced (but American made) Honda Accord (Kerwin & Treece, 1992). Lorenz (1986) comments, "Gone was the traditional policy, common to all American motor manufacturers, of cladding a lacklustre and unimaginative vehicle in an unwieldy, boxy, battering-ram shape, garnished with all sorts of ritzy, angular radiator grilles, tail fins and chromium strips. In its place was a policy of integral design, in which the car's uncluttered shape was heavily influenced by the need to reduce wind drag in order to improve its fuel consumption." (p. 2)

Petersen claims that Ford's new philosophy encompasses performance, handling and aesthetics, as well as quality, function, safety, comfort, reliability and cost of ownership - all of which are either direct or indirect results of well-managed, high-quality design.

Strategic marketing planning (positioning and differentiating) is critical to business success and design is a major strategic tool in this process. However, very few companies even consider design as a strategic weapon. Ford is an example of one company that has made design a focal point for strategic corporate decisions and experienced remarkable consumer satisfaction and corporate success as a result.

Design Management
This section examines what is known about how a company should manage the design process for the best returns on a company's investment, and reasons why more companies don't use design as suggested. Four contexts in which design management can be used (how to manage designers, designers in a management society, design function in an organization, and how managers use design), and a design user's model discussing four levels of a corporation's interaction with design (product, environment, information and corporate identity) will also be examined. Design management is the "who" of the design and management anomaly.

Design is a strategic marketing resource and should be managed as such. Bruce Archer (1976), head of the design research department at the Royal College of Art in London, put it succinctly, "Design, for management purposes, can be interpreted as meaning the main creative activity of the architects, engineering designers, graphic designers, industrial designers and others who, in a particular case, devise and elaborate the products, packaging, display, presentation and/or house style of a firm. Management, for design purposes, can be interpreted as ranging from the overall control of the firms' innovative activities - including corporate identity, product strategy, research, design and development, diversification and the like - to the detailed organizational and financial control of drawing office and/or project activity.... In some firms, where product design, in either the technological or the styling sense, dominates the company's fortunes, design management is identical with general management and the design manager will be the managing director. In other firms, where other considerations dominate, design management may be limited to (say) advertising. (p. 42)

Gorb (1982) defines what design is for managers and why it should be important to them. Design is the planning process for the things you make (which are your products). It can, but need not necessarily be, concerned with the aesthetics of your product. It also is in part and when necessary, a creative process, but it need not be exclusively, or even significantly concerned with creativity. Its importance to you as a manager is immense. In your manufacturing enterprise you have a number of responsibilities and concerns; to employees and to investors, to customers, to suppliers, to the community and so forth. But your prime responsibility, the main purpose of your enterprise and your main personal concern is with your product, and its present and future survival. On your product everything else depends. Furthermore as a manager one of your main tasks is planning in the widest context, and squarely in the forefront of that planning must be your plans for your product; and planning for your product is design. And design therefore almost certainly is (or should be) the most important thing you do. (p. 38)

Although Gorb neglects the importance of the consumer in this discussion, it is a
realistic view of the situation. Gorb (1982) also identifies four contexts of design management The first he calls ''How to manage designers," or the practice of running a design studio or department within an organization. It requires the same basic principles and practices as running almost any small business or consultancy except that it involves managing people and products that are inherently creative. The second area Gorb calls ''Designers in a management society," providing designers with knowledge of the worlds of marketing and industry in which they live and work. The third area (and, Gorb says, probably the most correct use of the term) Gorb calls, "Design function in organizations," and design management is placed at the same functional level as financial or production management. Although most designers feel that this is the level at which design decisions must be made and directed, it is rare to find the responsibility placed highly enough within the corporation.

Because "Design function in organizations" is concerned primarily with product design, a more comprehensive definition must be provided. The fourth area is "How managers use design." Gorb (1982) provides a model to describe the use of design in several types of business organizations because there are many companies whose product rarely changes, or organizations whose emphasis on design lies well outside of their main product, and also to address service and information industries whose product isn't tangible.

Gorb states that each of the four levels in the design user’s model represents a level at which most companies operate, and that each level is farther removed from the primary purpose of the organization than the previous one. Consequently, each level is correspondingly more complex. Kotler's (1984) observations on design management support this four-tier structure proposed by Gorb. Bill Hollins and Stuart Pugh (1990) refer to the integration of these four levels as "total design - the systematic activity necessary from the identification of a market of user need to the selling of the successful product to satisfy this need" (p. 3).

Design managers should be responsible for coordinating and directing all four levels of an organization's design efforts: products, environments, information and identity, in the same way that the personnel or accounting departments are managed. The first level is the product, the most important and most immediate concern for the manager. This level should include all activities from market research input through the start of detailed product specifications and designing, into and through manufacturing (Hollins & Pugh, 1990). Glen Urban and John Hauser (1980) take a similar view of the product design process, "Design is the designation of the key benefits the product is to provide, the psychological positioning of these benefits versus competitive products, and the fulfillment of the product promises by physical features" (p. 155).

The second level is the environment Gorb remarks that this is where the mission of the organization is most efficiently achieved. Environment design encompasses tools, buildings, equipment, location, vehicles, and selling points. Disciplines involved with environment include architects, retail planners, interior designers, site planners, landscape architects, signage designers and graphic designers. The designer's role at this point is more comprehensive and less immediate than product design. Environment design poses special problems for design managers because most of the applications require substantial capital investments (a new plant, for example), and most often a company will bring in an outside consultant, not having a need to keep an architect permanently on staff. If the organization's use of design is disjointed, then it is difficult to communicate a sense of the company's purpose, culture and needs to the supplier. Gorb (1982) points out the paradox that, ''The more important the commitment and the greater its strategic importance, the less knowledgeable the manager is likely to be; and thus, as a client, less able to brief his consultants" (p. 40).

The third level of the design model, information, is where design is typically thought of as communications. Information design may encompass everything from management information systems to advertising and public relations, to annual reports and signage. Gorb (1982) points out that because the costs of information design are slight, managers tend to trivialize the task. This is especially problematic when you consider that this is what most influences the public when they evaluate a company.

The fourth level of design input to an organization is corporate identity. Gorb (1982) says this level affects major management issues of strategy and policy. Corporate identity design involves auditing, improving, standardizing and controlling the product, environment and information systems which are used to communicate a company's personality, culture and mission.

Wally Olins (1989) says that, "In order to be effective every organization needs a clear sense of purpose that people within it understand. They also need a strong sense of belonging. Purpose and belonging are the two facets of identity" (Olins, 1989, p. 7). He explains the relationship between corporate identity and other design practices within an organization:

"Everything that the organization does must be an affirmation of its identity. The Products that the company makes or sells must project its standards and its values. The buildings in which it makes things and trades, its offices, factories and showpieces - their location, how they are furnished and maintained - are all manifestations of identity. The corporation’s communication material, from its advertising to its instruction manuals, must have a consistent quality and character that accurately and honestly reflect the whole organization and its aims. (p. 7)

The most important point is that design, at all four levels - product, environment,
information and corporate identity - must be integrated. Otherwise, it represents the shortsightedness of "selling" as opposed to true "marketing." Blackwell (1987) discusses that Integrated Marketing Communications (IMC) programs differ from traditional (fragmented) marketing communications in several ways. If the word "design" is substituted for "IMC," then these guidelines apply equally well.

IMC programs are comprehensive. Advertising, personal selling, retail atmospherics, behavioral modifications programs, public relations, investor relations programs, employee communications, and other forms are all considered in the planning of an IMC.
IMC programs are unified. The messages delivered by all media, including such diverse influences as employee recruiting and the atmospherics of retailers upon which the marketer relies, are the same or supportive of a unified theme.
IMC programs are targeted. The public relations programs, advertising programs and dealer / distributor programs all have the same or related target markets.
IMC programs have coordinated execution of all the communications components of the organization.
IMC programs emphasize productivity in reaching the designated targets when selecting communication channels and allocating resources to marketing media (pp. 237 - 8)

Design management requires a wide range of knowledge and skills to be used effectively and efficiently. However, this doesn't explain why so few companies utilize and manage design effectively. Why is there a high level of mistrust between managers and designers when it seems that there should be a high level of interdependence?

Peter Lawrence, founder of the Design Management Institute, feels that developing a design management discipline falls into two parts: developing the organization and operating structure within corporations to take better advantage of design's benefits; and promoting understanding by senior and middle management and integrating design at policy level (Design 1982). Gorb and Dumas (1987), observe that many line managers participate in significant design management decisions without even realizing it, in what they call "silent design."

Mark Oakley (1990), professor and writer on design management issues, observes that managers do one of two things when confronted with design: either they ignore the evidence and deny the importance of design, or they acknowledge that design is important but leave responsibility for it to others. "Managers, who would not dream of being left out of financial or personnel decision making, may quite readily distance themselves from anything to do with design" (p. 6). The explanations for this, Oakley says, are both practical and cultural. Managers feel uncomfortable making subjective decisions about design quality because their foundations are largely in analytical disciplines. They are not prepared to make determinations of visual (as opposed to written) information. Another explanation is that interest in color and style may be regarded as "a predominantly female concern," which many men are unable to appreciate, and since upper management continues to be dominated by men it follows that a lack of design understanding endures. Stereotypes dominate designers' and managers' assessments of each other. Regardless of the underlying reasons, too much unsuccessful design occurs because managers have no concept of appropriate design goals and expectations, or they fail to ensure that design projects meet the right expectations.

That designers and managers are different animals may come as no surprise to anyone who has worked with both groups (especially together), but it may provide explanation for their divergent approaches to solving problems. David Walker (1990) takes an anthropological approach to the fundamental differences between designers in his article appropriately titled, "Managers and Designers: Two Tribes at War?" In this examination Walker points to the different outlooks inherent to the two groups. His first observation supports those of Oakley (above) that design is largely uncharted territory for managers and they are uncomfortable with their lack of understanding. He also mentions miscommunication, different goals and different styles of thought as reasons for their different approaches. Managers have a critical, analytical frame of reference, whereas designers stick things together to see what results; they are better at synthesis than analysis. Managers are problem-oriented; designers are solution-oriented. Managers see difficulties; designers see opportunities. Designers are rash; managers are inert. The very differences in perception, aptitudes, processes and skills are what make managers and designers important to one another at both a personal and an organizational level. (Walker, 1990, p. 152)

Kotler (1984) cites design illiteracy, misconceptions regarding cost, tradition--
bound behavior, and organizational politics as the reasons that executives are not more effective design managers. He then suggests a two-way education process for both designers and managers as a way to improve this relationship. Marketers and designers can both be split into two groups regarding design practice; functionalists (the right way) and stylists (the wrong way). Stylist designers, says Kotler, concentrate on putting good outer form into design, resist market research, and pay little attention to cost; stylist marketers, most notably salespeople, use gimmicks and gadgets to catch the buyer's attention. Both press for cosmetic features, even if they don't add to a product's value and performance. Functionalist orientation is based on putting good functional performance, quality, and durability into the design, knowing that the key to customer satisfaction and repeat sales is not simply attracting initial purchase but providing long-term satisfaction.

Regardless of cultural, behavioral, or intellectual differences between designers and managers, the most fundamental reason for misunderstanding between them is a lack of exposure to the other's philosophical foundations in their education. Dumaine (1991) states that, "Many companies don't achieve maximum (design) leverage because a kind of Plexiglas wall separates designers and managers. An executive may feel vaguely uncomfortable with a designer - the guy's wearing a suit, sure, but underneath he's an artiste wearing a black silk T-shirt. Designers are just as much to blame for the breach. Many, trained at prestigious schools like Pratt (in New York City), or Cranbrook (in Michigan), never bothered to learn the language of business, looking upon the whole activity as beneath them -- mere commerce. (p. 88)

This observation is supported by many writers on the design-versus-marketing
subject Archer (1976) says, "The cross-disciplinary languages and the common sets of values are just not there. The educational, training, examination and qualification systems are so different that it is extremely difficult for the subject matter of one side to be effectively incorporated in the syllabuses of the other, except as optional 'familiarization' courses. A second important function of any professor of design management would therefore be to discover or develop the cross-disciplinary languages, the common sets of values and the means for transplanting relevant ideas into other educational and operational frameworks. That is why there is a need for an academic role in design management, regardless of whether or not there is room for a design management profession. (p. 43)

Walker (1990) discusses the gap between design and marketing education:
The education and training of managers tend to be based on analytical studies (such as accountancy and finance); therefore they are not very well equipped to deal with projects which involve unfamiliar concepts, predominantly visual (rather that written) information, fuzzy problems, high level of ambiguity, and assessments which are, variously, subjective, personal, emotional and outside quantification. Without making design sound mystical, as if it relied solely on intuition and higher non-rational insights, it does have the quality of many complex human skills in resisting analysis. (p. 148)

Walker (1990) indicates that the discomfort that management feels regarding
design seems to be based in the traditional cultural divide in education: "Numeracy and literacy are rated highly, while the abilities which revolve around materials -- manipulation, construction, tactile skills, and visual literacy -- do not even have a name" (p. 149).

All organizations can benefit from use of integrated design at all levels of operation: product, environment, information and corporate identity. Design should be managed much like any other strategic resource. The main reason more executives don't use design is that they don't understand its philosophy, processes, language, culture, practitioners or potential. The next, and final section, of this chapter will examine the prevailing criticisms of both the design and marketing education systems to determine the validity of the above hypothesis.

Ch II Literature review pt c