Products are primarily designed through two approaches. The first is to determine a price range that allows the products to be easily sold, and the second is to create a product with a unique difference or functionalities that cater to customers' needs.
In today’s competitive environment, besides setting the right price and creating products that deliver value, business operators have to contend with increasingly higher customer expectations. These challenging conditions make it easy to observe the performance of successful operators as well as operators whose products have failed and are required to return to the drawing board.
Yet many products that succeed today are not necessarily cheaper than their counterparts. Instead, these products have gained consumer acceptance, so people are willing to pay more for them to get something that they want.
The iPhone is an example of a product that does not compete on price. People who purchase iPhones simply specify their preferred model and memory capacity. Customers do not ask whether the product fulfils their needs and expectations in terms of functionality, ease of use, and image, or how well it reflects their own identities. Thus the iPhone perfectly illustrates how product value arises from a confluence of product functionality, good brand image and appropriate pricing.
That is why the greatest challenge to marketers is the ability to combine these three aspects of product design.
It is vital that the marketing team learns how to manage consumer demand for functionality to create a sellable product. After all, the first effect of increasing functions is inevitably higher prices.
Therefore, clear and accurate parameters that are directly drawn from target consumer demands have to be set after determining which factors are “must haves” and “nice to have”. These factors are then configured to meet price ranges acceptable to target consumers.
Understanding the balance between price and demand is illustrated by low-cost airlines.
Operators know that travellers regard airline food and in-flight entertainment as nice-to-have rather than must-have factors, and are therefore willing to accept the trade-off to get lower ticket prices.
Conversely, products such as enriched powdered-milk infant formulas show that higher prices do not deter parents willing to pay for this must-have factor, which will enhance their children’s brain development.
Second, the tremendous speed of technological development and borderless information flows have made elements that were previously nice to have, must haves today. This trend requires marketers and designers to keep themselves constantly updated, as history is littered with examples of brands that were left behind.
We saw Motorola losing its leadership position to Nokia, which in turn lost out to Samsung and Apple, because of an unwillingness to let go of elements that contributed to their past success.
Third, consumers have complex demands and are sophisticated enough to differentiate among products. The difficulty lies in discerning which consumer group is a sufficiently large market to target.
In studying the key elements of their demands in designing products and setting prices, we should not directly ask what they want, as they will respond with rudimentary requirements we already know. Moreover, addressing these needs will not lead to designs that differ from current market offerings.
Fourth, the value of a product to each consumer is premised on its “perceived value”.
As this will vary from person to person, it is vital to build a strong brand that is viewed positively by the market, which can be achieved by offering tangible products aligned with the projected brand image.
Although residential projects are not part of an industry known for its speed of change in product technology, all developers have witnessed the emergence of new pockets of residential districts and new forms of residences as the capital expands and develops its public utilities and mass-transit systems.
In light of the elements discussed above, many developers have designed innovative products that deliver great value, and have carved out new opportunities for themselves by successfully reworking products that had previously failed in the hands of other developers.