What is Product-Design Driven Strategy?

The four P’s Strategies

Business and marketing strategy is perhaps one of those things that differentiate leading companies from others. Successful companies tend to adopt one of the four strategies known as the four P’s – price, promotion, place, and product, as a main strategy, to run and grow their business. Let’s see how these strategies work for companies that sell (physical) products.

The price strategy is about attracting customers with good prices, by selling at lower price than competitors. This strategy is common in commodity product markets or among companies that bring production efficiency to its highest levels (IKEA). Big quantities and efficiency are prerequisites to succeed with this strategy.

Companies that play in the promotion strategy game spend most of their efforts and budgets on promoting and advertising their products. This strategy is useful in markets of strong brands with simple products, such as the food and cosmetics industries (Lay’s / L’OREAL), and in markets with no real difference between competitors brand’s products. So the only way for companies to stand out is by promoting and branding. Only big enterprises can afford this strategy.

The place (or distribution) strategy is about placing shops in a wider distribution and better locations (AHAVA), or having stronger and more efficient distributing channels than competitors (Eden Springs). This strategy is based on customers’ convenience and habits from one side, and logistics  optimization, from the other side. It takes years and great investments to build such channels.

These three strategies are about how to sell products. Now let’s focus on the fourth strategy – the product strategy, which is the only one dealing with what to sell – the product itself.

The product strategy is simple to define – make good and attractive products that are better than your competitors. This strategy is divided into two categories – technology driven and product-design driven.

Technology driven companies develop better products in terms of performance and efficiency. Their R&D is the center of the business. This strategy fits well with either big enterprise with big budgets R&D labs (PHILIPS) or startups companies that develop new disruptive technology. For both, the technology and the IP are the main assets of the business. This strategy is most common in high-tech and high-engineering product markets. It requires brilliant scientists and engineers, and being willing (as well as having deep pockets) to invest and to take risks.

Product-Design Driven Companies

Product-Design Driven (PDD) companies make better and more attractive products, while using basically the same technology as their competitors. The products’ advantage is achieved by high quality product design combined with branding, market & users analysis, and production optimization. Unlike all other strategies which are based mainly on a single discipline (marketing, distribution, R&D), the PDD is a multidisciplinary strategy. It is based on the combination and integration of many disciplines (mainly R&D, marketing, and production). The design department cannot implement it by itself. Great product design and smart engineering alone bring value, but it cannot stand in for a company strategy.

The PDD strategy has few advantages over all other strategies:

  1. It has the best and fastest ROI.
  2. The investments needed are significantly lower.
  3. It can be implemented in any company at any vertical.
  4. It gives customers real value, for the short and long term.
  5. It simultaneously empowers the product, the brand, and the marketing.

So why don’t we see many more PDD companies? Because PDD strategy is not that simple to implement, it requires vision, management capabilities, and professional knowledge.

In order to succeed, any PDD company must implement Product Design Management - a corporate culture and multidisciplinary management methodology that benefits product design and innovation for business growth, as part of the company strategy.

It is not a matter of choice for a PDD company whether to use product design management or not, it’s a must have. Product design management is the only methodology to manage and control a complicated multidisciplinary strategy dealing with design, engineering, marketing, sales, users, production, and more. There aren’t any other methodologies that can handle all of these business aspects.

Product-design driven strategy is a new powerful business and marketing strategy; I believe we will see more and more companies adopting this strategy in the coming future. Product design management is the only methodology to properly implement and maintain PDD strategy.

How to implement product design management in a product-design driven company, will be my next article subject.