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COMPETITIVE
ADVANTAGE
THROUGH DESIGN
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INTRODUCTION
By Andrew Summers, Chief Executive, Design Council and
Digby Jones, Director General, CBI

Businesses today face an increasingly stark choice. They can turn out
products and services aiming simply to be the cheapest - and leave
themselves vulnerable to being beaten on price. Or they can inspire genuine
loyalty from customers by giving them products, services and a whole
experience, answering needs that not even the customers knew existed.
Andrew Summers
Chief Executive To take the second path and achieve secure growth, enhanced efficiency
Design Council and continuous improvement, businesses need design - not just giving the
makeover treatment to what they already do, but right at the heart of their
strategy, acting as a catalyst for completely new offerings. That requires
vision, a measure of courage and a willingness to take risks and work in
new ways. The businesses featured in this publication demonstrate the
potential rewards for showing faith in design’s power to provide a
differentiator in crowded markets.

We hope their stories inspire you to do the same.

Digby Jones
Director General
CBI

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‘One of the great functions of design is to be able


to project and embody the future rather than the
present: that is where added value comes from.’
Sir Christopher Frayling, Chairman, Design Council
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CONTENTS
STORIES ADVICE

04 GO 07 BRANDING

08 SMILE 11 E-BUSINESS

12 LIFEBUILDING COMPANY 15 LIFESTYLE & COMMUNITY

16 HEWLETT PACKARD 19 INNOVATION CULTURE

20 TESCO 23 CUSTOMER FOCUS

24 UNILEVER 27 ENVIRONMENT &


SUSTAINABILITY
28 DUCHY ORIGINALS
31 DESIGN COSTS
32 BLACK & DECKER
35 PRODUCT DESIGN
36 IKEA
39 STRATEGIC DESIGN
40 SMITH & NEPHEW
43 DESIGN
44 CHARCOLONLINE THE BUSINESS CASE

47 CONNECTING
48 USEFUL INFORMATION DESIGN & MARKETING

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STORY 1 GO

GO COMPETES WITH THE HIGH STREET


TO GET PASSENGERS ON BOARD
The deregulation of air travel in 1997 spawned a quartet of low-cost airlines in the
UK: Go, Easyjet, Ryanair and the now defunct Debonair. Rather than just entering a
head to head battle with the other airlines, Go, a former British Airways subsidiary,
decided to set itself apart from the competition by deliberately taking on the High
Street retailers for a slice of the growing leisure spend.

Barbara Cassani To achieve this, Go’s design and but preferred to spend their money
Chief Executive marketing strategy was aimed at on something else. What would attract
persuading the increasing number of them was reliability and style, plus a
ABC1s with disposable income that a trip few affordable extras such as
to Barcelona, Bilbao or Venice was an allocated seating.
alternative to a meal out or a new pair of
designer trousers. Hence Go positioned Go used branding and customer focused
itself as a classier, more design- design (both up front and behind the
conscious airline than the competition, scenes in its
while offering equally cheap fares. A restrained business operation)
Because it entered the market slightly image sets Go to build a
later than its apart from competitive
Go’s business competitors, brasher rivals position in the
model sees David Magliano, market. Its logo
retailers, not Marketing Director and overall image are modern and
just airlines, as of Go, was able to restrained - in contrast to the brash
competition carry out detailed ‘tabloid’ style of its main competitors.
observational Both its brand and advertising are
research. He realised that the airline had designed to appeal to upmarket
three potential markets: passengers professionals - visual, stylish, clean,
visiting friends or relatives, self-employed crisp, with a clear invitation to travel.
and middle-tier business people and It aims to emulate well-known retailers
pure leisure travellers. Most of these such as Ikea and Gap and banks like
could afford a more expensive option First Direct.

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‘Design correctly harnessed can enhance life, create jobs and make people
happy - not such a bad thing.’ Paul Smith, Fashion Designer

Even the in-flight catering fits in with work immediately the passengers leave FACT BOX
Go’s design ethic. Like other no-frills the plane. The new passengers then
COMPANY GO
airlines Go doesn’t offer free food or have to be ready, the ramp and steps in
drink, but it has brought High Street place, baggage loaded and the gate CHIEF EXECUTIVE Barbara Cassani

values to its service clear. According to David Magliano, ‘It’s MARKETING DIRECTOR David Magliano
Managing the by doing a deal just like a pit-stop in a Formula One race.’ FLIGHTS 24 European
customer with Costa Coffee destinations
experience, from to offer the same Cheap airlines currently have only 6% of PRODUCTS & SERVICES Airline - low cost
the website to quality of fresh the European market but Go estimates
COMPETITORS Easyjet, Ryanair
the in-flight coffee, sandwiches, cakes that the no-frills airline sector will grow
and coffee that its to 12% in the next five years. The airline WEBSITE www.go-fly.com
has paid off
customers are is expanding rapidly and, as a final
already used to. And this in itself is good demonstration of its confidence in the
business as some 67% of passengers future, the management team has
now buy food or drink on board. completed a buy-out from British Airways.

An easy-to-navigate website (rated as one Magliano concludes: ‘We measure our


of the quickest in the UK) and efficient own customers’ satisfaction and over
airport systems to reduce queues and 80% of customers rate our overall
speed up loading all add to Go’s reliability experience as Good or Excellent. This is
and customer experience. well above the consumer industry norm
so we believe we are getting it right.’
Winter 2001
In fact shorter, more efficient, turnarounds Advertising campaign
are also a key to financial success: Go Certainly the results look good so far.
can fly a Boeing 737 for 11-13 hours a Partially thanks to Go’s rapid growth,
day whereas a more traditional carrier Stansted Airport is now the fastest
might fly for just five to eight hours. growing airport in the world. When Go
Those extra hours translate into improved first took off from Stansted, London’s
productivity, increased revenue and newest airport handled four million
therefore lower prices. To achieve this passengers a year. Now it handles 12
Go has reinvented the ‘turnaround’. It million and much of that can be attributed
now takes a mere 25-28 minutes to get to the airline that used design to take
passengers off, clean the cabin and on the High Street multiples for a slice
undertake security checks. Go’s crews of the leisure pound.
do the cleaning themselves, starting

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‘We measure our own customers’


satisfaction and over 80% of customers
rate our overall experience as Good or
Excellent. This is well above the consumer
industry norm so we believe we are
getting it right.’
David Magliano, Director of Marketing, Go

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ADVICE 1 BRANDING

In competitive markets, where there’s little to choose between rival


products or services, a compelling brand message can set you apart and
keep you ahead. But brands aren’t created overnight. They need to be
carefully managed and nurtured. Once these intangible company assets
have been established and accepted, however, they can be translated into
genuine, tangible profits.

Good branding should permeate a company like the lettering on Larger companies are keenly aware of the power of branding
a stick of rock. The most obvious manifestation of branding is and usually invest in design specialists to unleash its potential.
in the visual image - every conceivable aspect of it. From its They are rightly confident that they’ll get returns on their
logo and publicity material to its stationery, signage and vehicle investment. But on a smaller scale, successful branding is
livery. From its website and staff uniform to its offices and also achievable. The rigour and consistency required might
advertising. This corporate ‘look’, is what distinguishes you seem daunting, but if your objectives and style are clear,
from your competitors and should also hint at your values. reinforcing your brand values almost becomes second nature,
Take the online bank Smile’s identity, for example, which not to the extent that staff instinctively recognise when something
only subverts the traditional image of a High Street bank, but is or is not ‘us’.
also suggests a friendly service and cleverly adopts the visual
language of the internet. Certainly design can create a template and guidelines for
branding, consultancies can even advise on enhancing internal
A brand works on several levels. It’s a statement of identity, efficiency and corporate culture, but ultimately branding
but it’s also one of intent. It’s saying ‘this is who we are, this comes from within, reflecting the ethos and philosophy of your
is what we do and how we intend to do it’. So it’s important company. Design is a tool for making that philosophy visible
that you deliver on your visual promise. A slick logo won’t ever and managing it, so that your customers perceive you as an
compensate for a shoddy product or service. Customers are organisation they can trust and rely on, and your staff firmly
quick to see through a veneer of style if there is no substance believe in the values they represent.
to back it up.

And that substance comes in all forms. Staff need to believe


in and reflect the corporate values too, in their attitudes
and behaviour - in the way they answer the phone, deal with
customers and suppliers, how they present and handle
themselves, even how they write their letters.

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STORY 2 SMILE

PUTTING A SMILE ON THE FACE


OF A BANK’S CUSTOMERS
You don’t see many people with a smile on their face when they are queueing in a
bank. So when the Co-operative Bank launched smile, the UK’s first full-service
internet bank, in 1999, the first principle it established was that it had to be
personalised and user-friendly.

To underpin these core brand values a Yet design means much more to smile
FACT BOX
coherent design strategy was needed, than creating a friendly logo and a
COMPANY smile
to encompass: shocking pink house style. Design
CHIEF EXECUTIVE Bob Head
• Branding - to attract potential principles drive the way the bank’s printed
PRODUCTS & SERVICES Online banking customers to try something really new literature is written and presented, the
ACCOUNT HOLDERS 500,000 in first
informal but efficient telephone manner
• Customer needs - to keep clients with of the staff and, most importantly of
18 months
the bank, and ensure they recommend all, the development of its website.
SECURITY OF SITE BS7799 - Information it to their friends!
Security management
• e-business - a genuine solution, not a To ensure reliability, smile has always
CUSTOMER FOCUS Active e-panel of
trendy, not-very-useful add-on. used technology that is widely available
500 customers
and which allows as many customers
TURNOVER - 2000 £429.0 million
smile’s logo with bright pink branding as possible to access the site quickly
Co-operative Bank. Up
£25.7 million on 1999
was a deliberate strategy to enable it to and easily.
stand out from the crowd among the
OPERATING PROFIT - 2000 £96.3 million
major banks. The Chief Executive Bob Head believes that
(before tax) Co-operative Bank
Design drives colour pink was smile’s internet design has been the
WEBSITE www.smile.co.uk
every aspect chosen because key to business success. ‘Simple clean
of business, it clearly separated design and clear language have ensured
right down to it from the usual that smile customers like to use our
telephone manner blues, greens and site and recommend it to their friends.
reds of conventional At the same time, we have to deliver
banks. And the design, reminiscent of products to customers at a low cost to
e-mail sign-off ‘smileys’, is appealing the bank and customer alike. The result
to the technological generation that is a website which is straightforward,
would most likely be the bank’s first simple, human and, above all, easy
customers. to navigate.’

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‘Every aspect of our daily lives has been designed, but some things
were better designed than others.’ Alice Rawsthorn, Director, Design Museum

Bob Head At the height of the e-commerce boom, used by the visually impaired through
Chief Executive many of the banks with internet offerings special software which converts text to
rushed in without researching this crucial speech. The site is also designed to be
issue of navigability. very secure. smile was the first internet
Navigability, smile, on the other bank to be accredited with BS7799 for
simplicity and hand, turned to Information Security Management.
clarity are what the Japanese
guiding principles would term ‘kaizen’ The results speak for themselves. By
of smile’s - a process of exploiting its flexibility and its customer
Advertising web design continuously focused web design strategy to the full,
campaign
implementing small smile attracted 500,000 account holders
improvements. These improvements in its first 18 months. This is backed up
have been introduced onto the website by recent awards:
virtually on a daily basis, something Improvement is smile was voted
that gives smile a major advantage over constant because top in a UK league
branch-based banks with their fixed and of rapid response table for electronic
inflexible infrastructure. to customer banking customer
feedback satisfaction
To ensure that smile really listens, an (Virtual Surveys -
e-panel of 500 customers has now been February 2002). And Presswatch, the
established, as well as a physical panel independent press monitoring service
of 20 customers, who discuss their views that assesses positive and negative
with bank staff on a regular basis. press coverage, placed smile third out
The panels also measure performance of 2,921 companies in the UK last year.
against six ‘scruples’: Value,
Transparency, Service, Commerce, Bob Head emphasises that the bank’s
Ethics and Accountability. core position is that smile people help
each other to be better off, while fully
The outcome of this intensive customer supporting the Co-operative Bank’s
feedback has been the relaunch of the strong ethical and ecological stance.
site, designed to make it faster and ‘Design has been at the heart of our
even easier to navigate. New content business and our website... of course,
was added and pricing was made if they want to, smile customers can
more transparent. The site has been also use the extensive branch network
awarded a Crystal Mark for plain of the Co-operative Bank to conduct
English and, with the help of the Royal their business.’
National Institute for the Blind, can be

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ADVICE 2 E-BUSINESS

Chastened by recent lessons, these days companies are approaching


e-commerce with a little more realism and caution than they used to. And
so they should. But, handled in the right way and entered into for the right
reasons, e-commerce can still make good business sense. Just look at
Tesco, which has so far spent £60 million on tesco.com, and is already
enjoying turnover of around £350 million.

The first thing to realise about e-commerce is that it is in on-screen visual layout. You could well need both, and there
essentially no different from any other business channel in may be some overlapping of skills sets, so it’s only sensible
that it requires constant commitment, investment and to establish who will be responsible for what from the outset.
refreshment to keep it functioning at its best.
The type of website you have in mind will have a bearing on
When you’ve got your website up and running, that’s only the the expertise you require too. If you intend to trade online, for
beginning. From there it has to be maintained, updated and, example, an e-commerce specialist will be able to advise you
most importantly of all, be able to back up its promises quickly on essential issues such as secure payment processes,
and efficiently. After all, a customer might have a wonderful navigating a visitor around your site and helpful online shopping
experience exploring your site and ordering a product from it, devices such as a virtual shopping basket.
but they’ll certainly end up being bitterly disappointed if the
goods turn up two months late in a crumpled heap. There are several other basic rules to bear in mind. Keep the
words clear and to the point. A simple layout is quicker to
To save your blushes later, there is a series of essential download and reacts faster to commands. And never be afraid
questions that need to be asked before you get started in to change things if they’re not working - the online bank smile
e-commerce. Firstly, why exactly do you want to get online? Will uses what the Japanese call ‘kaizen’, a process of continuously
you be using your site purely as a marketing tool, or do you implementing small changes, almost on a daily basis.
intend to trade from it? Where does it fit into your overall business
strategy? How much money can you afford to spend on it?

Once you’ve addressed these issues and are convinced


you’re doing the right thing by going ahead, you need to get in
the experts. Remember, there are two distinct kinds of
web/internet designer - one is a technical expert who can
build a site from scratch, the other someone who specialises

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‘Physical products are becoming containers for the delivery


of services and experiences and it would surprise me if
housing doesn’t follow that route.’
John Weir, Group Design Director, Wilson Connolly

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STORY 3 LIFEBUILDING COMPANY

BUYING A LIFESTYLE NOT


JUST A HOUSE John Tutte
Chief Executive

Some people argue that house building in Britain is largely in a time warp with most
new homes based on a jumble of derivative styles, using antiquated and inefficient
building methods and laid out with little, if any, aesthetic or environmental sensitivity.
Worse, people generally don’t trust house builders and don’t expect good service
from them either.

Starting from that assessment The company is particularly targeting FACT BOX
Northampton-based builder Wilson those with clearly established
PARENT COMPANY Wilson Connolly
Connolly faces an uphill task. But this community values who traditionally buy Holdings plc
company is using design to turn older homes and who would not
CHIEF EXECUTIVE John Tutte
stereotypes on their head by tackling normally look twice at a brand new, raw
customer satisfaction, sustainability, housing development. DESIGN DIRECTOR John Weir

environment and community concerns, PRODUCTS & SERVICES Housebuilder


choice and flexibility, while introducing To explain his concept, Group Design CONSTRUCTION & 34
high technology and also recording a Director John Weir compares houses DESIGN AWARDS - 2000
22% increase in operating profit last with mobile phones: ‘Mobile phones
BROWN FIELD HOUSING 49%
year. Its new brand is simply called used to cost a fortune and you got one
CUSTOMERS 75% would not buy
The Lifebuilding Company. service with a single call charge rate.
a new home because
Now they cost nothing and what you pay of concerns of
The business believes that its future for is the service neighbourhood and
success lies in careful consumer Defying and experience community
research and environmental planning stereotypes with that you get with TURNOVER - 2000 £571.2 million
which will set it apart from the homes geared the phone - and
TURNOVER - 1999 £469.1 million
competition. Through research of the to customers’ that is tailored to
new and second-hand housing market, lifestyles your needs. OPERATING PROFIT - £78.4 million
2000
Wilson Connolly has taken a leaf from Physical products
the book of the best retailers and created are becoming containers for the delivery WEBSITES www.wilsonconnolly.com
homes that are customer-focused, with of services and experiences and it www.thelifebuildingcompany.com

a design policy which takes a holistic would surprise me if housing doesn’t


view of buyers’ differing ‘lifestage’ follow that route. That route has
requirements. tremendous implications but we are

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‘Good design is not simply about aesthetics or making a product easier to


use. It’s a central part of the business process, adding value to products and
services and creating new markets.’ Tony Blair, Prime Minister

already on the first step down it and in the


future we will be offering our consumers
something very different from what is
normally available today.’

Customers of The Lifebuilding Company


get a real choice of properties and
internal layouts, which can range from
open plan loft-style living with no
Emscote Lawns buildpack.com Marketing material
bedrooms to extra bedrooms for large development Lifebuilding Company
families. This flexibility is possible
because of the use of many factory-
manufactured solutions to speed up Connolly group of companies currently The Lifebuilding Company extends these
build times and improve quality and builds around 49% of its homes on principles to the end consumer, based
reliability. For instance, the use of timber previously developed (‘brown field’) on the concept
frames has the potential to reduce build land, but the objective is to exceed A designed that house buyers
time by an average of 25%, reduce 60%. And in production these operating way of living, want to choose a
waste, increase energy efficiency and companies have already saved around not four walls totally designed
allow the use of IT to transfer designs £1 million by introducing new waste and a roof way of living to
directly to the production process on management and minimisation solutions. suit their lifestage,
the factory floor. rather than four walls and a roof. A
To help Wilson Connolly judge how sense of community responsibility is
The company has also drawn up a ‘sustainable’ a particular site might be fundamental to this, and every purchaser
sophisticated environmental policy that it has designed a 10 point comparison of a home from The Lifebuilding Company
has been externally verified by AEA index. This covers: transport, proximity automatically becomes a member of a
Technology Environment. The policy to services, location, land use, flora Community Trust, which is entrusted to
covers five areas of operation: land and fauna, planning policy, employment keep the immediate environment in good
management prospects, mixed uses, social aspects shape in order to protect and enhance
Environmental (both strategic and deliverability. The local community everyone’s investment.
responsibility is and current), and planners can be involved in helping
part of a carefully planning and to weight the scores and the index can John Weir has a clear ambition for
managed identity design, clearance be used to distinguish between potential The Lifebuilding Company: to build it into
and production, brown field and green field sites in a a premium priced brand, synonymous
marketing and sales, and business development area. If a site doesn’t with quality, convenience, choice and
operations. Each area is managed with a measure up then the company looks flexibility, social cohesion and
set of guiding principles and challenging elsewhere and even sells back land environmental friendliness - all delivered
annual objectives to be met. Under land that might have been purchased before through a carefully designed, customer
management, for example, the Wilson the index came into use. focused service.

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ADVICE 3 LIFESTYLE & COMMUNITY

Design has a key role to play, not only in helping


businesses become more profitable, but also in creating
better environments and communities for us to live in.

The example of house builder Wilson Connolly is a case in In some ways, design that has a positive effect on the
point. The company is attempting to change attitudes to new community is just plain common sense. But often this involves
housing developments by adapting its offer to suit people’s stepping away from entrenched thinking and examining matters
lifestyles and by addressing common concerns rather than trying from a fresh perspective, which is easier said than done.
to persuade people they want something that they don’t.
Good lighting and visibility not only deter thieves, but make
In a broader context, designers have a responsibility to address people feel safer. The same is true of other mesures that
the issues of how we live and how the products and services hamper crime or remove temptation, such as car immobilisers,
we use on a day-to-day basis affect the people immediately bicycle pods at rail stations and handbag clasps on
around us. Improving the design and quality of public spaces restaurant seats.
and buildings, public transport and local amenities of course
helps to generate a spirit of community and well-being. And
common concerns, such as an increasing crime rate, how to
cater for an ageing population and how to deal with pressing
ecological issues can all be tackled effectively by a modicum
of lateral thinking and inventive design.

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STORY 4 HEWLETT PACKARD


This case study was written prior to the proposed merger of HP and Compaq.

WRAPPING THE FUTURE AROUND


THE INTERNET
The recent high-profile proposed merger of Hewlett Packard and Compaq illustrates
the relentless need for growth and worldwide reach in the computer industry. HP
believes that we’re heading toward a world where everything will be connected by
way of a new generation of technology linked to the internet. What is astonishing is
how quickly this is happening.

At the same time, there is a strong defines what HP stands for in an


downward pressure on prices. What’s internet age, and sits at the core. The
clear today is that value rarely lies character defines how HP acts and
solely in the product itself, but in the communicates, and performance
service delivered through the product, indicates what HP says and does to
which is why more companies are make it all ring true.
wrapping them in e-services.
What happens when product design
HP believes that it must display six goes way beyond the box?
FACT BOX inherent traits to survive in the
internet era: inventiveness, optimism, One activity which highlights all the
COMPANY Hewlett Packard
inclusiveness, humanity, quality- characteristics of an innovative culture is
CHAIRMAN & CEO Carly Fiorina
consciousness and trustworthiness. the Superdome high-end server project.
EMPLOYEES 89,000 (pre-merger) HP still sees itself as a company of The HP Superdome
PRODUCTS & SERVICES IT, hardware, inventors in the tradition of Bill Hewlett Value lies not in product team
software and solutions and Dave Packard, who started the the product, but designed a
TURNOVER - 2000 $48.7 billion business in a garage. However, in the service it whole customer
inventiveness now is seen to be vital to delivers experience into
TURNOVER - 1999 $42.3 billion
business success: the smart, ingenious their top line UNIX
PROPOSED ACQUISITION Compaq
thing that others will admire and respect server. By harnessing the collective
NEW COMPANY VALUE $87 billion - and pay for. know-how of far-flung, interdisciplinary
as of Sept 2001 teams, the product team learned it could
WEBSITE www.hp.com These traits are wrapped around the HP make the whole process of planning,
brand character and soul. The soul purchasing, integrating and maintaining

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‘We are a company of inventors who care passionately about inventing a


better world - and unlocking the inventiveness of those around us.’
Carly Fiorina, Chairman, President & CEO, Hewlett Packard

high-end server systems painless - and Employees are


therefore priceless - for customers. HP people are encouraged to
encouraged to spend ten per
The team held monthly Superdome pursue their cent of their time
council meetings, inviting representatives own ideas on activities other
from R&D and marketing, manufacturing than their main
and sales, and finance and support to day-to-day jobs in order to work on the
cover everything things that they find interesting.
Teams from from bug fixes
across HP to how to For example two employees, David
combined to manoeuvre the Frohlich and Guy Adams, used their ten
design a refrigerator-size per cent time to investigate how people
customer server onto would like to augment their photographs.
experience loading docks. In The concept of having sounds with
those meetings, photographs emerged from this research,
and by listening to customers, they and set them off looking for a way of
had the opportunity to deliver a truly playing back sounds from physical
customer focused experience. paper prints.

The company’s perceived need to There are several potential ways in THE COMPANY WAS FOUNDED
constantly reinvent itself and its products which this could be done. David and ON FIVE CORE VALUES:
is seen as a journey of three phases: Guy explored the options of texture
Look, Aspire and Act. ‘Look’ involves mapping, which is a bit like a record • Respect for the individual
looking at the changing market and its with a bumpy surface, magnetic strips, • Contribution to customers
competitors and then analysing HP’s like those on credit cards, and optical and the community
strengths and weaknesses in this mechanisms, which operate CDs. The • Uncompromising integrity
market. ‘Aspire’ means wanting to idea that stood out, however, was using • Teamwork
invent a much more human, personal, a microchip. These are getting smaller • Innovation
friendly internet that delivers e-services and cheaper to make, and are already
of all types via an ‘always-on’ small enough to be embedded in paper.
infrastructure. ‘Act’ is simply described there are no specific plans to take the
by the company as ‘preserving the After making a prototype, which audioprints or paperclips into production
best, reinventing the rest’. embedded a microchip in a photo, David but there are multiple patent
and Guy generated another option of applications pending.
Hewlett Packard believes that to be mounting it on a detachable paperclip.
truly creative, its employees must have This gave HP two possibilities to consider Thus, by encouraging this type of creative
the freedom from time to time to for realising audio-prints, and opened and innovative thinking, Hewlett Packard
pursue their own interests outside the up a new design space in the area of hopes to retain its dominant position in
immediate requirements of the business. talking office products. At the moment the internet-led global market.

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‘Our core values, and the


rules of the Garage [Hewlett
Packard was founded by
two inventors working from
a garage], are the heart and
shining soul of the system.
These are among our
greatest, most compelling
competitive advantages.’
Carly Fiorina, Chairman, President & CEO,
Hewlett Packard

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ADVICE 4 INNOVATION CULTURE

If creativity itself is an elusive notion, then creating a corporate environment in


which it can flourish is even more tricky. And yet it is essential for companies
who wish to bring innovative products and services to market.

Cultures within individual organisations vary dramatically, The other step companies can take is to set aside a physical
so there’s certainly no right or wrong way of creating an space where people can take a break, share their thoughts
atmosphere in which ideas and creativity can thrive. Indeed, and get away from their usual desks or workstations. If the
original thinking often arises as a direct result of corporate space is visually stimulating, so much the better. A change of
individuality, so it should be nurtured and encouraged. But scene can redirect a train of thought, and an informal forum
undoubtedly one of the most useful exercises for any company for the exchange of ideas is always healthy and productive.
is to allow people to share ideas at the earliest opportunity. An interdisciplinary approach often throws up interesting results
A half-formed, or even half-baked, idea can often spark too, though it can be difficult to put into practice. Though co-
tangential thoughts in others, eventually leading to something ordinated collaboration usually means you’ll get there quicker,
valuable and worthwhile. Ideas often work well in relay too, different groups tend to have developed their own language
with one person pushing them along further from the point and acronyms, and may even have wildly different opinions on
where the previous person left off. what constitutes good design.

There are two practical measures which can help. The first is But in a way that’s the whole point. Today’s successful products
to designate time for new ideas to surface. The computer giant and services are complex beasts, which need to be examined
Hewlett Packard, for example, asks employees to spend ten and dissected from all perspectives. It’s important not to let
per cent of their time on activities other than their day-to-day one particular discipline dominate a brainstorming or ideas-
jobs to work on anything they find interesting. This generation session, and doing some role-play or creating a
non-specific, non-pressured approach has proved prototype jointly is a good way of making sure that everyone
fruitful, spawning various radical thoughts, has a fair say without laying down formal rules.
which may or may not be taken further. Even
if an idea doesn’t get off the drawing No matter how ridiculous an idea might seem
board, at least this scheme gives employ- on the surface, don’t shout it down. You never
ees the chance to exercise their ingenuity know, it may be the beginning of something
and creative muscles. significant, and egos bruise easily.

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STORY 5 TESCO

THE BIG BRAND THAT HAS


CRACKED THE ART OF E-RETAILING
The rollercoaster world of e-commerce is still in its infancy. New technology
inevitably attracts entrepreneurs, but the recent spectacular crash of several
internet-based businesses illustrates that the key to successful innovation is often
the ability to harness new technology to mature businesses with strong brand
names. Oh, and don’t forget to put the customers first!

Terry Leahy In the mid 1990s, many first-timers Tesco decided from the start that the best
Chief Executive, launched unproven business concepts economic model was structured around
Tesco
on the internet. Tesco.com was its existing assets and so it used in-store
launched initially as a defence against staff to pick items ordered over the
all these new e-retailers, however internet off the shelves, rather than
Britain’s top retailer has now proved making up orders from a separate
that e-retailing can be highly successful warehouse. While other retailers mainly
if the business model is well designed. opted for centralised warehouses,
Tesco correctly forecast - against all
John Browett Tesco was one of the first retailers to the received wisdom at the time - that
Chief Executive,
go online, back in 1995 and, to be fair, warehousing was a recipe for disaster.
Tesco.com
its website suffered a few early jitters
before developing John Browett, Chief Executive of
Tesco realised into the sleek and Tesco.com, explains: ‘Running our home
the value of its intuitive site that delivery service from the stores gives
existing assets to we see today. customers the best service and value.
its next venture More important Delivery times can be kept below 30
than the website minutes from store to house, keeping
though was what lay behind it and here costs down, and the range is huge
is where the company began to succeed. because stores stock so many products.’

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‘The point about good design is that it imposes order and simplicity on a
chaotic world. It makes it easier to think.’
Prue Leith, Former Chairman, Royal Society for the encouragement of Arts, Manufactures and Commerce (RSA)

With a turnover of £300 million, ‘Our dot com business is an important FACT BOX
Tesco.com is now very large in internet way of getting in touch with our
COMPANY Tesco
terms. Confident in its success, it has customers and reaching out to new
recently received the endorsement of ones too,’ adds CHAIRMAN John Gardiner

Silicon Valley by agreeing to take a third A strong brand Lucy Neville-Rolfe, CHIEF EXECUTIVE Terry Leahy
share in GroceryWorks, the online means it costs Tesco Corporate CHIEF EXECUTIVE John Browett
shopping operation of California-based less to win Affairs Director. Tesco.com
Safeway inc - so the Americans can customers ‘We have won
CORPORATE AFFAIRS Lucy Neville-Rolfe
benefit from Tesco’s experience. Tesco is several awards for DIRECTOR
rapidly reshaping innovation including The 2001 Sunday
TESCO.COM £300 million
Delivering from GroceryWorks’ Times Business Innovation Award. We TURNOVER - 2000
shops keeps costs operations by have also won the first ‘See it Right
TESCO.COM £60 million
down and speeds closing down its Accessible Website Award’ from the
INVESTMENT (since 1995)
up services warehouses and Royal National Institute for the Blind for
AVERAGE CUSTOMER Online £90,
introducing its own the way the site meets the needs of
SPEND in-store £25
technology and business processes. people with sight problems while using
‘California is the best market in the informative and entertaining design. STORES (UK) 692
(300 open 24 hours)
world,’ adds Browett. ‘60% of people And our online retail portal - Tesco
have access to the internet in their Access - is now available from Pocket CUSTOMERS Over 1 million
homes, compared with 30% in the UK PC devices and Smartphones.’ (signed up)

and the e-commerce spend is ten times AWARD WINNER See it Right Accessible
what it is here.’ Tesco’s strong brand, good use of Website Award - RNIB

design and innovative approach has WEBSITE www.tesco.com


Having conquered the technology, helped to minimise customer capture
Tesco.com now has to ensure that it costs. Coupled with its existing IT,
reaches as wide a market as possible. retailing and logistics skills, this ‘clicks
The potential customer base comprises and mortar’ front-runner looks set to
millions of internet users - many more lead the e-retailing pack for some time
people than it could reach through its to come.
branch network.

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‘Our dot com business is an important way of getting in


touch with our customers and reaching out to new ones.’
Lucy Neville-Rolfe, Corporate Affairs Director, Tesco

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ADVICE 5 CUSTOMER FOCUS

It’s easy to say, harder to put into practice. But the best way to make
sure customers buy your products and services is to give them exactly
what they want. Companies need to take a step back from their
offering and try to put themselves in the shoes of their customers.
Observing people carefully and analysing how they live their
everyday lives needs to be central to the design process.

Tesco.com is a prime example. Realising that many of its using your product or service. Identify different user groups
potential customers didn’t have personal internet access and really try to get under their skin - what are the particular
during the day, it made a new online retail outlet available problems and possibilities with each of them? How and why
from pocket PC devices and Smartphones, allowing them to do they use products? What are they trying to do? As a general
shop at home, at work or on the move. rule, it’s better to conduct in-depth interviews with a few people
than undertake a superficial study of many. You can then marry
And if you’re not sure what your customers do want, the best your findings with broader quantitative research.
thing to do is ask. Like building company Wilson Connolly, which
consulted 16 focus groups across the country before embarking Where possible, it’s best to observe people in their habitual
on its groundbreaking Lifebuilding Company project. Or the environments where they’ll behave naturally rather than pulling
internet bank smile, which has an e-panel of 500 customers them into an unfamiliar interview room. Encourage them to
to measure value, transparency, service, ethics and draw diagrams and never be afraid to ask obvious questions,
accountability - and to make sure it really listens to what even if doing so makes you feel stupid.
people say they want and expect from it.
From here, it’s a question of visualising and crash-testing your
Before you embark on any design process, it’s important to ideas. It’s not a bad idea to create fictitious scenarios with a
really understand the area in which you’re working. You need to variety of characters who might be using your new product or
get smart and get prepared. Read all the relevant journals and service. You might draw up storyboards, create comic-book style
documents, style guides and annual reports. Phone people photo stories or even make scale models to act out various
you think might be able to make interesting contributions - scenes. If you are developing a new product, further down the
you’d be surprised just how many people are prepared to line you might create a paper or polystyrene prototype to test
share their knowledge. Research competitive products and people’s reactions. Or, for a service, don’t underestimate the
services. Look for key themes, as well as cultural and lifestyle value of using ‘mystery shoppers’ for piloting.
trends that might impact on the design.
Customer-focused design is about getting feedback right
Once you’re well grounded, the next stage is finding inspiration through the design process. It’s always effective and can
by getting a deeper understanding of the people who’ll be occasionally throw up the unexpected.

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STORY 6 UNILEVER Persil tablets


Non-biological tablets

KEEP TAKING THE TABLETS


You don’t normally associate detergents with design. Washing powders and liquids
are hardly the most glamorous part of the weekly shop, and the arrival of ‘designer
detergents’ in supermarkets is clearly still some way off. However, design thinking
does help Unilever solve an extremely tricky equation in linking scientific research,
customer research, marketing, business strategy and environmental issues to evolve
the product offering we see on our shelves.

FACT BOX Persil Tablets are a good example. raw materials through manufacturing,
Persil, manufactured by Unilever, has a packaging, distribution, use and
COMPANY Unilever
dominant 27% share of the fiercely eventual disposal.
CHAIRMEN Antony Burgmans
competitive £1 billion UK household
and Niall FitzGerald
detergent market, where players have to Environmental concern is not the sole
PRODUCTS & SERVICES Consumer products be highly innovative to remain competitive. preserve of Unilever. The European
UK MARKET SHARE - 27% Unilever considers design to be crucial detergent industry as a whole has
HOUSEHOLD DETERGENTS in pulling together its research and taken steps to address environmental
(3 YEARS) development and manufacturing issues by developing a Code of Good
DETERGENT IMPACT Reduced by 125,000 operations to develop the products Environmental Practice, backed by an
tonnes a year in Europe which help secure more market share. awareness campaign aiming to show
TURNOVER - 2000 £28,963 million But just as important to the company are consumers the contribution they can
up 16% on 1999 its targets for sustainable development, make to sustainability by changing the
WEBSITES www.unilever.co.uk defined as ‘meeting way they wash their clothes.
www.unilever.com Design binds the needs of the
research and present without However, despite efforts like these,
manufacturing compromising the good performance is generally still
to create ability of future more important to customers than
new products generations to environmental issues when they choose
meet their needs’. their detergent. Various eco-friendly
Its policies include using environmental detergents have been launched over
management tools to evaluate the the last few years only to fail simply
potential whole-life effects of products because they don’t do their job as well
from the extraction and processing of as conventional detergents.

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‘We have a consumer and


citizen agenda. The task is
to design a product that is
consumer friendly but which
is also environmentally
sustainable’
Dr Hamish Will, Environmental
Assurance Manager, Unilever

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‘Design is the creative harmonic between culture and industry, technology and
consumers, and engineering and art.’ Dick Powell, Director, Seymour Powell

Niall FitzGerald & In this relatively conservative marketplace Hamish Will, Unilever’s Environmental
Antony Burgmans a new product has to carry a simple Assurance Manager for Home Care
Chairmen of Unilever
proposition and offer obvious benefits. products, likens the convenience of
Past successes and failures illustrate the detergent tablets
point. In the 1970s, low temperature Tablets combine with that of
bleaching agents in washing powders customer teabags: ‘Both
meant customers could reduce their advantage with products are
washing from 90° to 60° and cut their environmental pre-measured,
energy bills, but benefits which means
New products the concentrated convenience and
must carry simple powders of the minimum waste. Although we tried to
propositions and 1990s met with get across the environmental message
clear benefits resistance because with concentrated powders, it simply
people tended to didn’t work because there was very little
use more than necessary and so came to perceived consumer advantage.
see the product as bad value for money.
‘Consumers want to do the right thing,
Unilever’s designers had to find a product but when it comes to the crunch they
that brought together the requirements do what suits them. We have, therefore,
of eco-friendliness, performance and both a consumer and a citizen agenda.
convenience. They came up with a The trick is to provide a product which
simple idea - detergent tablets - which is consumer friendly but also
proved to be the breakthrough the environmentally sustainable. Detergent
company had been looking for. tablets fulfil both criteria.’

They were launched in the UK and France Will added: ‘The success of detergent
in 1998 after seven years of R&D. At tablets has reduced the volume of
the time, 60% of the market was in big detergent used in
box powders, 20% was in liquids and the Using tablets Europe by
remainder was in concentrated powders. has cut overall 125,000 tonnes a
Unilever hoped tablets would have a detergent use year. We have no
20% share in five to six years by moving in Europe doubt that this
customers from big box powders and new unit dose
concentrates. However, tablets have format represents an opportunity to
already secured a 25% share in just make further major contributions
three years. towards the sustainable consumption
of detergents.’

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ADVICE 6 ENVIRONMENT & SUSTAINABILITY

It’s estimated that 25% of vacuum cleaners, 60% of stereo systems and an
incredible 90% of PCs still function perfectly well when people decide to get rid
of them. It’s clear that if the highly commendable goals of sustainable living
and energy conservation are to be met, a sea change in consumer attitudes
and behaviour needs to be initiated.

It’s just as clear that such a shift in attitudes needs to be Director of Forum for the Future, it has developed tools such
adopted by businesses too. So how close is it to materialising? as Life Cycle Assessment which gauge the environmental
Recent research by the Design Council suggests that British impact of products and help to spur innovation rather than
businesses have some catching up to do with their European stifle profitability.
counterparts when it comes to seeing sustainable design as
an opportunity to enhance competitiveness and build brand For others, ready access to information on the possibilities of
values rather than a way of staying within regulations. While sustainable design would be a major step in the right direction.
only 3% of Swedish businesses, for instance, saw designing Then they could start to integrate appropriate programmes
for sustainability as a product development cost, 21% of into their business strategy. In the UK too many companies
British companies saw it that way. In Sweden, 76% viewed it are unable to look beyond principle-specific issues such as
as an investment, compared to only 38% in the UK. Of the waste management and recyclable materials, rather than
German businesses surveyed, 35% said they pursued taking a more holistic approach which would result in more
sustainability in the name of competitiveness, compared to far-reaching, innovative solutions. If the issue is given an
only 18% in the UK. A reactive attitude by UK businesses is appropriate priority at the beginning of the design process,
suggested by the fact that 36% said customer demand was rather than tacked on as an afterthought, the chances are
the main driver for sustainability. that more breakthroughs will follow.

Of course, figures like these may simply be a reflection not Taking a leaf from more progressive countries, exchanging
so much of some in-built British reticence as the fact that ideas, creating forums for debate and sharing information are
sustainability has been on the business agenda longer in all positive measures that could and should be taken. Good
some European countries than in the UK. Nevertheless some practice should be highlighted, encouraged and aided with help
UK companies are already taking a proactive stance. Unilever’s from relevant industry and governmental bodies. Armed with
continued efforts to put sustainability at the heart of its work relevant information and perhaps even coaxed by incentives,
prove that it’s possible to tackle environmental issues companies can put more energy and initiative into sustainable
positively and strategically and not regard them as a tiresome strategy. Sustainability is something that most companies
obstacle. With guidance from external advisors such as Bjorn realise will become ever-more important to the way they do
Stigson, President of the World Business Council for business. They just need the will and necessary tools to
Sustainable Development, and Jonathon Porritt, Programme integrate it into their corporate culture.

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STORY 7 DUCHY ORIGINALS

THE ROYAL BISCUIT WITH


AN ORGANIC MESSAGE
Duchy Originals is the organic food brand established by The Prince of Wales in 1990.
This followed the establishment of a 450-acre organic farm on the estate at Highgrove
in the mid-1980s. By the early 1990s, the estate was producing sufficient crops to
turn them into commercial products, and this led to the idea of establishing a food
brand which would actively encourage the establishment of more organic farming and
food production. A secondary objective was to raise money for charity, namely The
Prince of Wales’s Charitable Foundation.
Duchy Originals now has a strongly Despite the proselytising motive behind
FACT BOX
branded range of organic food products the launch of Duchy Originals, the
COMPANY Duchy Originals
that sets out to persuade the public business is run on
MANAGING DIRECTOR Belinda Gooding that sustainably produced comestibles Combining tasty strictly commercial
COMPANY SIZE Seven employees are also very good to eat. food with sound lines. Costs are
business and a kept to a minimum
PRODUCTS & SERVICES Organic food and drink
According to Fiona Gately, PR and pro-organic through the
SALES - 2000 £12 million message
Communications Manager, Duchy licensing structure,
CHARITY DONATION - £1.3 million Originals products exemplify what organic enabling the firm
1999-2001 farming is about. ‘We launched the brand to be run by a small core team. This
EXPORT MARKETS USA, Germany, Japan in 1992 with Oaten Biscuits made with team handles sales, marketing and
WEBSITE www.duchyoriginals.com Highgrove wheat and oats. They were new product development, while
attractively packaged with a printed manufacturing and distribution are
explanation of the wheat-growing and handled by the licensees.
manufacturing process.’
The company spends no money on
The original biscuit took about 18 months advertising, so depends entirely on
to develop in partnership with Walkers in-store promotional activity, public
Shortbread and now all Duchy Originals relations and high quality packaging to
products are produced under licence. develop brand awareness and tempt
The source of the raw materials is also new customers.
more diversified, although much still
comes from Highgrove, including the Fiona Gately emphasises that packaging
recently launched Duchy Originals Organic is the key to the brand. ‘Packaging has
Milk from the farm’s Ayrshire herd. to tell people what the brand and the
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‘One of the missions of The Prince of Wales’s organic food brand is to persuade
the British public that organic farming is vital to the long-term sustainability of
the planet and good use of design is helping to achieve that aim.’
Fiona Gately, PR and Communications Manager, Duchy Originals

product are about, so we rely heavily on other products. The objective of the
good design. A couple of years ago we brand is to deliver something new to the
needed to develop a consistent design sector and each product has to have its
to give us a clear brand identity across own identity. A question The Prince of
a growing product range. Being organic, Wales always asks is “Is it original?’’’
our products most often sit alongside
the supermarket’s own label equivalent. A great effort is also being made to
The trend towards merchandising organic encourage other farmers within the Duchy
foods within the product category, of Cornwall estate
rather than in organic blocks, means Farmers are to convert to
that the products are increasingly sold being encouraged organic farming, to
beside mainstream brands as well. to grow provide a potential
They therefore need to stand out and organically source of organic
compete on the shelf.’ raw materials for
the future. At the same time, overseas
Customer research is important. Gately links are being set up to ensure a
adds: ‘Research shows that people will sustainable and reliable source of crops,
come to the brand such as organic cocoa and ginger, which
Branding conveys because they know cannot be grown in the UK.
tradition and the connection.
innovation A lot of people Although products are exported to the
first buy the USA, Japan and Germany, Duchy
products because they are aware of Originals is concentrating its efforts on
The Prince of Wales’s views in the the home market. Judging from the
organic and environmental fields, and rapid growth in sales to £12 million,
it does help that many customers like and the brand’s presence in Tesco,
the fact that the profits go to charity. Sainsbury’s, Waitrose and Safeway, in
However, customers will only make addition to specialist stores all over the
repeat purchases if they like the products UK, this seems to be working well.
as much as the principles behind them.
Furthermore, The Prince of Wales’s
‘But perhaps most importantly, Duchy Charitable Foundation has received a
Originals is about innovation. While the donation this year of £580,000 out of
products may seem traditional, there is Duchy Originals’ profits, an amount
always something different - an ingredient which the company aims to boost to
or a process - that is not available in £1 million within the next five years.

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ADVICE 7 DESIGN COSTS

No one likes spending money if they don’t have to. That’s not only sound
business sense, it’s human nature. And it’s also one of the underlying
(if misguided) reasons that companies are reluctant to invest in design -
many feel it’s an unnecessary, not to mention hefty, expense.

But they’re missing the point. The scope and potential of design design psychologists and researchers. They can see a project
within a business context is far reaching - among other things, it through from start to finish, commencing with research, moving
can contribute new ideas and approaches, make your business through to concept development, and then on to testing and
processes more effective, offer knowledge and expertise in engineering of the product or service.
relevant areas, and improve strategic planning and thinking.
But you can expect to pay handsomely for this array of skill sets
Of course you can pick and choose from these various offerings as these agencies represent the upper end of the market.
- you may need one, a combination or all of them. It’s also worth
remembering that in the longer term, good design solutions Alternatively, you could employ a single-discipline agency, which
can have a tangible effect on profit margins, customer relations specialises in one particular area and can deliver focused,
and the perception of your brand. Design may not come cheap, quality expertise. This type of agency can, where necessary,
but the savings and benefits it can achieve easily outstrip bring in people with other skills through its network of contacts.
initial costs.
Finally, you could take a chance on a raw young designer, just
Once you’ve decided to invest in design, you’ll need to decide starting out in their career, from whom you can expect inspiring,
what type of agency is most appropriate to your requirements. perhaps even provocative work. On the other hand, you’ll
There are many different outlooks and set-ups and you’ll find probably have to provide more input yourself and exercise a
that professional charges vary considerably depending on greater level of control.
location, specialism and experience.
This is a general guide - the main point is to consider exactly
Whichever designer you decide to hire, you will need to supply what you need and cut your cloth accordingly.
a design brief and an indication of the budget you will be
making available.

Larger, multi-disciplinary agencies offer a ‘one-stop shop’,


providing a holistic approach and integrating design skills and
expertise in a number of different areas. This type of agency,
for example, could tackle an integrated response to a brief
combining contributions from hardware and software designers,

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STORY 8 BLACK & DECKER

THE POWER-TOOL BUSINESS


DESIGNED TO SUCCEED
Every time you turn on the television, there seems to be another programme about
home or garden improvements. This has led to an increase in demand for power
tools, but consumer trends are changing and there is a need for a constant flow of
innovative products. That is why market leader Black & Decker places paramount
importance on new product design and development.

All of Black & Decker’s businesses have Where possible, Black & Decker will seek FACT BOX
established a reputation for product global design solutions, but Europeans,
COMPANY Black & Decker
innovation, quality, design and value. for example, generally require more
CHIEF EXECUTIVE Nolan D Archibald
The company’s Consumer Power Tool compact products than Americans
Chairman, President
division sells the brand-leading range because their homes and gardens tend
and CEO (US)
of drills, jigsaws to be smaller.
PRESIDENT Ian R Carter
A constant flow and sanders as
President - Europe
of innovative well as garden Danny Bone, Innovation Manager, Power Tools and
products for items such as places great importance on the ‘Three Accessories group
changing markets hedge trimmers As’ - Attitude, Ability and Awareness.
PRODUCTS & SERVICES Consumer Tools, DIY
and lawnmowers, ‘As designers, we must have a can-do Divisions: Consumer
and the hugely successful Dustbuster attitude. The moment people go into power tools, outdoor,
hand-held vacuum cleaner. negative mode they’re not looking for cleaning, accessories
the best solution. By ability, I mean the TURNOVER - 2000 $4.56 billion
Product design and development are ability to allocate sufficient time for (worldwide)
carried out by a number of strategically development and planning. Awareness TURNOVER - 1999 $4.52 billion
sited global design centres. The second and understanding of what’s around (worldwide)
largest of these is based in the North you is the third vital attribute of a
OPERATING PROFIT - 2000 Net earnings
East of England, employing more than good designer.’ $282 million
100 personnel.
WEBSITES
www.blackanddecker.com (Tools and accessories)
www.dewalt.com (Dewalt tools)
www.bdk.com (Corporate information)

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‘New products introduced within the past


three years accounted for an impressive
one third of our total sales in 2000’
Nolan D Archibald, Chairman, President and CEO,
Black & Decker, Annual Report 2000

Quattro concept
ID sketches
Nigel Robson 33
CBI Part 2 _a/w 23/5/02 2:02 pm Page 11

‘Because new products stimulate retailer and consumer interest, build consumer
demand, contribute to market share growth, and represent a vital opportunity to
increase profit margins, our new product strength is especially important during
periods of economic weakness.’ Black & Decker, Annual Report 2000

An example of Black & Decker’s


innovative approach was the launch of Emerging Consumer
Needs & Opportunities
the Quattro. During the mid 1990s the
company’s Multisander had proved to be B&D Strategy

very successful. Its multifunctionality had Brand Image ‘Milestone’


dramatically increased both its perceived Design Centre Initial Design &
Creativity Concepts Implementation
and real value with commensurate Inventors
Process
financial benefits. This led the business External Technologies
to consider what the effect may be if Suppliers
Universities Application of new/ Satisfying The Corporate Need
multifunctionality were applied to the
new to us technology Black & Decker Design Process
business’s core product range. Within
two weeks of applying the three As to
this challenge a concept prototype of
a power tool capable of drilling, Innovation Group is to help prioritise Danny Bone
screwdriving, sanding and sawing had and incubate such ideas into credible Innovation Manager
been created and demonstrated. business opportunities.

Bone believes it is essential to show a In the case of the Quattro, the concept
working prototype. It gives concepts, progressed quickly through the business
particularly in new business areas, a and the seven-strong project team
credibility that can be readily understood successfully launched the product within
and communicated throughout the 17 months of its inception. As Bone
business. The puts it: ‘It began as a ten-minute video
Industrial design innovation process conference and ended up as a multi-
gives products a is aimed at million dollar product.’
must-have quality translating concept
ideas, derived The result of this approach to design
from insights into consumer needs, into and innovation is that Black & Decker
reality. Industrial design further enhances is a global leader
the process by ensuring the finished Creative design in its sector with
article exhibits a ‘must-have’ image distills ideas a year 2000
reflecting brand values. from within turnover topping
and beyond $4.5 billion. And
Creative design is a distillation over the company its particular
time of many ideas. These initial ideas success with first-
can come from anyone within, or even time ‘DIY-ers’, including women, means
external to, the business. The role of the its customer base looks very secure.

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ADVICE 8 PRODUCT DESIGN

You only have to look at the success of the Apple iMac to see how radical, brave
product design can galvanise a company’s fortunes. This type of design requires original
creative thinking, gutsy self-belief and determination, and perhaps just a touch of
inspiration. But this is the glamorous, aspirational end of product design, isn’t it -
surely these kinds of criteria aren’t applicable to more mundane, everyday items?

Not a bit of it. As Danny Bone, Innovation Manager at Black & Teamwork is an essential part of the design process.
Decker, recalls: ‘It’s often better to ask for forgiveness than Manufacturers, suppliers, and if possible the end-user, should
permission. If you believe a concept will work, try it, you will work closely with designers to ensure a quality product and
learn from the experience. There is very little to lose and should be involved right from the start of the design process.
everything to gain.’ There’s probably a life lesson in there Up to 80% of a product’s manufacturing costs are committed
somewhere, but it makes sound business sense too - if you in the early stages - if they are managed effectively, you
don’t stick your neck out from time to time, you’ll never should reap the rewards later.
produce anything remotely different and there’ll be nothing to
set you apart from the competition. A realistic design concept such as a working prototype made
from the correct materials will help iron out niggles before the
He points to the need for an open mind too. The Black & Decker machines start rolling and will smooth discussions between
Workmate, submitted by an external inventor, was initially design and production. Refining your manufacturing plans
turned down by the company, but put into production later alongside your product development gives you viable
after the decision was reviewed. The time might not be right production options and reduces the time it takes to move
for your particular creation, but perhaps its time will come. from concept phase into production.

Product design has been described as adapting new technology to At Black & Decker, the design process for the Quattro power
the application of innovative thinking. Undoubtedly, an in-depth tool was unique in that its start point was clearly defined.
knowledge of relevant manufacturing processes, technologies This, however, is quite rare as the start point for most
and materials, as well as the market you are designing for, is projects is difficult to define precisely.
critical. Adding that little unexpected twist to your product is the
magical added extra. But successful design is also pragmatic Numerous concepts and ideas are generated in response to
design. It should always be able to deliver efficient manufacturing perceived and real customer needs. The innovation process
- that is, make sure that the product is made cost-effectively helps to define credibly what the future product may be. The
for its specifications within set timescales. trick is to provide solutions to genuine customer needs before
the customer is even aware of those needs. Doing this helps
businesses lead markets with innovative products that
reinforce and enhance brand value.

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STORY 9 IKEA

DESIGN ACROSS THE BUSINESS,


PRODUCTS, PROCESSES AND
ADVERTISING
When Swedish furniture retailer IKEA first appeared on the British landscape in
1987, it offered a completely new concept. Well designed furniture and household
products - although in many ways unfamiliar to the UK market - soon caught on
because quality was good, prices were low and the self-assembly drive-away offering
reduced the need for deliveries.

Anders Dahlvig Since IKEA was founded in Sweden in A key element in the design of all IKEA
President 1951, it has been driven by the pursuit products is the need to minimise
of a single ideal: well designed products material waste in order to keep costs
at low prices. down. Therefore design has to be
functional and fit in with existing
IKEA bases its design and new product production methods and the finished
policy on the customer feedback it products must be packaged in such a
receives from its way as to fit onto Euro pallets. Most
Feedback and locally-based sales importantly of all, the majority of
Hans Gydell collaboration and marketing products, with obvious exceptions such
Vice-President
guide design operations as upholstered sofas, must be designed
throughout the for flat-pack distribution so that they can
world. Thus any product modifications be easily stored and then transported
or new product ideas are subject to a in the average car. Furthermore, they
carefully thought-out operation from must be easy to self-assemble when
original design concept and product the customer gets them home.
development to the selection of
suppliers, distribution to the stores and IKEA believes in close collaboration with
then to customers - mainly through its manufacturers. Thus its ‘co-workers’
take-home flat packs. Developing or regularly visit suppliers all over the
modifying products at IKEA is a blend world to negotiate prices, monitor
of co-operation, collaboration and production and carry out quality controls
discussion between designers, product and inspections.
developers, purchasers and suppliers.

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‘Design is 98% commonsense and 2% that magic ingredient called


aesthetics and sometimes style.’
Sir Terence Conran, designer, restaurateur, retailer

IKEA is design led and many of its some of the Swedish retailer’s more
products are radically different from its modernistic designs. It thus took some
competitors’, yet its retail formula is years before the UK was won over to
hard-edged. It is based in seven areas, IKEA but sales were boosted in the mid-
which are all designed for simplicity and 1990s by a tongue-in-cheek advertising
efficiency. They can be summarised campaign developed by American TV
as follows: Commercial Director Mark Tiedermann,
• Product development IKEA is a with the strapline ‘Chuck out your Chintz’.
production company. Its operations
are a balance between design, function, The strategy was to challenge people’s
environmental sensitivity and a low price expectations and to make them question
their taste without offending them. The
• Suppliers new products are made with
commercials went on air in the last throes
good materials from the best suppliers, of the Major Government and aimed to
backed by well designed supply chain tune in to the perceived social and
management systems cultural changes in Britain at the time.
• Purchasing ‘co-workers’ work closely
FACT BOX
with the suppliers to negotiate prices, Research showed that when the
COMPANY IKEA
monitor production, and carry out commercials first went out, two-thirds
PRESIDENT Anders Dahlvig quality controls and inspections of all IKEA visitors were female and
VICE-PRESIDENT Hans Gydell • Distribution a vital piece of the low women took 90% of purchasing
price puzzle. Well designed flat packed decisions. The research also showed that
MANAGING DIRECTOR Goran Nilsson
UK STORES products contribute to keeping storage men were happier than women to live in
and transport costs low the minimal, functional environment
UK ADVERTISING Frances Evans
MANAGER
that IKEA-style encouraged. The initial
• Stores are simple, well designed, cost
campaign raised awareness of the IKEA
COMPANY SIZE 58,000 employees effective and easy to navigate brand from 39% to 63% in the stores’
PRODUCTS & SERVICES Home furnishing • Customers contribute to creating a low catchment areas.
products
price by choosing to collect, take home
STORES 139 in 22 countries and assemble their goods By last year IKEA had ten stores in
SUPPLIERS 1960 in 53 countries • Advertising, though IKEA offers a Great Britain, which has now become
defined range of products, advertising the company’s second largest market.
TURNOVER BREAKDOWN Europe 80% (UK 13%)
North America 17% differs from country to country However judging from the number of
Asia 3% conventional furniture warehouses that
TURNOVER 2000 $8.5 billion
While the British have always liked IKEA’s still stand proud along our arterial roads,
low prices and take-away operation, there there are still plenty more potential
WEBSITE www.ikea.com
has always been some resistance to customers to be won over.

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‘We will achieve the IKEA vision by offering a wide range


of well designed, functional home furnishing products at
prices so low that as many people as possible will be
able to afford them.’ Anders Dahlvig, President, IKEA

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ADVICE 9 STRATEGIC DESIGN

An awareness of the power and potential of design should be at the strategic heart
of any good business. Used intelligently and thoroughly, design can increase profits
and turnover and open new markets, as well as improve take-up and market share.
Softer benefits might include more solid relationships with your customer base and
suppliers, and fewer customer complaints.

To reap some of these potential rewards, find out how design At best, design can be used as a powerful instrument for
is currently being used within your organisation. Everything is managing and co-ordinating how your business looks to its
designed, though not necessarily with a coherent focus. You customers as well as the way it communicates with them and,
need to make sure your company starts thinking about the most importantly, thinks about them. It’s also a tool for
implications of design at the early stages of a project. A strategic helping you realise and evaluate future business, service and
overview of design can both manage and co-ordinate the product opportunities, and a way of maximising a company’s
activities of your business, with advantages of competitiveness potential to deliver useful, useable and desirable products
and efficiency. and services.

Like any strategic aspect of your business, you need to be able It’s always worth bearing in mind that strategic objectives are
to evaluate what design has achieved for you on a particular unlikely to be delivered through investment in a single project.
project by setting out targets and goals before you start, and A holistic approach, combined with a little patience, will always
take a judgement as to whether these have been met when yield more encouraging results - creating better business
the project is completed. It’s also worth considering the processes through effective design is best thought of as an
broader picture, linking all the parts of your business that are ongoing initiative, involving a series of investments and
affected by design (marketing and customer relations as well design-led programmes. These may be needed over a period
as product development, for example) and looking at how of time and might include your products and services, your
each of these areas may have benefited. communication material and your working environment.

Engaging with design techniques, methods and perspectives


adds value the whole way through the creative business
process. From the refinement and clear articulation of a
strategic vision, to identifying problems and coming up with
relevant solutions, to working through concepts, finding the
right emotional ergonomics and managing the development
process. Finally, it brings an added impetus to your marketing
drive and clarifies the branding of the finished goods.

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STORY 10 SMITH & NEPHEW

NAILING THE COMPETITION


THROUGH INNOVATION
The competition in the healthcare market is probably among the fiercest in the world.
Smith & Nephew is one of the best known and respected brand names in the medical
field yet it is still driven by the need for constant innovation in order to remain one
step ahead of the field.

Innovation is taken seriously throughout innovative surgical techniques and


FACT BOX
the organisation, not least in the instrumentation designed for shortening
COMPANY Smith & Nephew
boardroom. Chief Executive Christopher and improving patient recovery. Following
CHIEF EXECUTIVE Christopher O’Donnell O’Donnell believes ‘innovation is the extensive design testing, stage three,
MARKETING DIRECTOR Rory Gleadhill lifeblood of a medical device company the staged development process
Orthopaedics like Smith & Nephew’. concludes with limited clinical trials to
COMPANY VALUES Performance, ensure that the products will perform
innovation, trust Product development therefore sits at the as designed.
PRODUCTS & SERVICES Healthcare
heart of profitability within the company,
backed up by its other core values, which Whenever possible, Smith & Nephew’s
TURNOVER - 2000 £1.135 billion
are performance, trust and innovation. R&D process seeks to develop platform
TURNOVER - 1999 £1.120 billion technologies on which a number of new
OPERATING PROFIT - £171.4 million Product development is managed via a products can be produced. This strategy
2000 stage-gate process, to ensure that maximises the return on the costly
WEBSITE www.smith-nephew.com products will meet customers’ demands investment involved in commercialising
and perform clinically. Market research, implantable medical devices by building
stage one, defines the unmet needs of on proven technologies and designs.
Christopher O’Donnell
Chief Executive
Smith & Nephew’s
Product customers. Stage Smith & Nephew is particularly strong
development is two involves in the orthopaedic sector and has been
central to research and recognised for its innovative designs in
profitability development intramedullary nails for many years.
engineers working Intramedullary nails are tubular metal
in partnership with leading clinicians to implants which are placed in the central
develop new products, as well as bone marrow canal of badly broken

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‘Innovation is the lifeblood of a medical device company like Smith & Nephew.’
Christopher O’Donnell, Chief Executive, Smith & Nephew

bones. They are used when a traditional improving efficiency, in part by increasing Gleadhill believes that the Smith &
plaster cast will not provide the necessary familiarity with the technique through Nephew brand strength having been
level of mechanical repetition. In addition, the TriGen nailing built on trust, performance and
Innovation cuts stability required system is colour-coded for instant innovation makes the medical profession
operating time for predictable recognition of the correct components more receptive to its developments
and speeds healing. However for the implant system as well as than to those of its less well
patient recovery the company’s matching the correct instruments. known competitors.
world-renowned This also reduces the chances for
product, the Russell-Taylor stainless inadvertent mistakes that might Rory Gleadhill
steel nailing system, now faces strong otherwise lead to wasted operating Marketing Director,
competition from more recently room time and a potential increase of Orthopaedics
developed products. patient trauma.

Smith & Nephew recognised that it was Rory Gleadhill, Marketing Director for all
time for a new innovative approach to orthopaedic trauma products, points
counter the competition. With the out that TriGen really makes life simple
assistance of two world-renowned for the surgeon. ‘The design allows
surgeons, Dr Toney Russell and Dr Roy surgeons to treat fractures with just
Sanders, the company developed TriGen, three nail designs, compared with six or
a titanium nail system, with the goal of seven nailing systems for the Russell-
simplifying the technique. Taylor product line.
Clear brand In addition, the
Since operating room charges are often values are surgeon now only
the most costly part of this treatment, attractive to needs one
Smith & Nephew recognised the need customers instrument set to
to reduce operating times. Reduction of treat almost any
operating times is also critical to patient lower-extremity fracture. As well as
recovery, in the instance of multiple making surgery easier and reducing the
traumatic injuries, and in particular the cost of the procedure, the new design
case of serious motor vehicle accidents. causes less trauma and leads to a
better rate of patient recovery and
The TriGen nailing system is a major success.’ This is a highly customer and
advance in intramedullary nailing patient- focused approach.
technique and has been recognised by
five patents with two more pending. It The product was launched into the US,
has significantly reduced the number of German and Japanese markets a year
instruments required to treat lower limb ago and has been well received. It has
fractures. It also makes it easier to not yet been sold into the UK market,
train the operating room staff, thereby although it is being evaluated.

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‘Design is not an add-on, but


ground level, base station thinking.’
Peter Crowley-Palmer, Principal Designer, Land Rover Group

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ADVICE 10 DESIGN - THE BUSINESS CASE

Because design initiatives are hard to measure in a directly quantifiable way,


many companies need convincing about their efficacy. They want hard evidence
before they commit time and money to something they perhaps feel is irrelevant
to their day-to-day working practices.

There is, however, a compelling reason to apply design The shares, bundled into a fund, out-performed the Standard
techniques, methods and perspectives to every possible aspect & Poors 500 benchmark by a factor of nearly four. The fund
of your organisation. It’s a reason that makes every business grew by an impressive 350%, while the rest of the market
person sit up and take notice... namely, the bottom line. averaged just 90%. Such figures at least suggest a link between
strong performance and a design-led approach.
In fact, if your company is prepared to embrace sound design
principles fully, it can expect to reap significant rewards. In 1999, the Design Council conducted a further study. Here, the
These include increases in the take-up of services, better FTSE-quoted clients of six top UK design consultancies were
products that enjoy a greater market share, fewer customer monitored. For the purposes of the research, six hypothetical
complaints and less wastage on warranty repairs and returns. funds were established - one for each of the consultancies as
These are the kinds of advantages that are a springboard to well as a joint fund containing all of them. Significantly, all of
the running of a healthy, profitable business. these funds out-performed the FTSE All-Share Index. While
individual funds were between 5% and 28% more profitable,
Design can increase your profits in two major ways - by cutting the joint fund proved 10 points more effective.
costs and improving margins. The best way to achieve cost-
cutting is to bring in design-for-manufacture (or implementation) The fact that design isn’t just for blue-chip companies was
expertise from the very outset of a project. As for improving underlined by a similar exercise undertaken in 2000 with a
your margins, you can add value to products or services by hypothetical fund based on the 31 FTSE-quoted companies
designing greater usability, heightened aesthetics or a more awarded Millennium Products status by the Design Council for
engaging customer experience. And effective design, excellence in design and innovation. These companies included
particularly as far as products and graphics are concerned, is relatively small businesses launched on to the market on the
a major source of differentiation in customer perception of basis of the product or service which won Millennium Product
quality and brand value. status. The results were even more impressive, with the
Millennium Products companies out performing the FTSE
But if you want hard facts and figures, try this: In 1998, Fitch, All-Share Index by up to 150% over a four-year period.
a large, well-respected international design consultancy quoted
on the Stock Exchange, conducted an experiment. It tracked
the share prices of a selection of its publicly quoted clients,
back-dated over a five-year period. The results were staggering.

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STORY 11 CHARCOLONLINE

FIXING A MORTGAGE WITHOUT


GOING ANYWHERE
The internet has created a new breed of consumers who want to make their purchases
instantly via their computers and don’t want to be bothered with visiting shops or
making phone calls. The mortgage broker Charcol, formerly John Charcol and now
owned by Bradford & Bingley, spotted this trend in the late 1990s, so it set up an
internet mortgage service which would allow people to compare mortgages and apply
online. Up front, the service it designed is clearly customer-focused, while behind the
scenes the system also improves the company’s operational efficiency.

Although Charcol had operated a website online and get a quick decision from the FACT BOX
like those of its competitors since 1996, mortgage provider. This has enabled
COMPANY Charcol
it primarily offered mortgage information. Charcol to reach a new market sector.
CHIEF EXECUTIVE Toby Strauss
By the millennium, the company realised Traditionally, its
that an interactive service would capture Broking services clients wanted DIRECTOR SPECIAL Clive Kornitzer
a lot of business from beyond its appeal to advice on choosing PROJECTS

traditional client base. ‘empowered’ a mortgage. Now PRODUCTS & SERVICES Financial Services
clients the increased AWARDS Mortgage Site of
CharcolOnline - a complete online capability of broking The Year 2000
mortgage broking service - was launched services available on CharcolOnline Microsoft Digital
in November 1999. Since then, the appeals to clients the company describes Britain Award
service has flourished, gaining Charcol as ‘more empowered, with a different
OWNER Bradford & Bingley
a larger market share and several mindset’. Building Society
awards, including the Microsoft Digital
WEBSITE www.charcolonline.co.uk
Britain award and the Mortgage Site of Recently, Bradford & Bingley decided it
the Year award. wanted to provide an online investment
service. CharcolOnline was given the job
Charcol employed both external of developing an investment site for the
consultants and its own staff to design group. This was developed in close
the site. The result was an online tool co-operation with the regulatory
to enable potential clients to find a authorities and now offers an ISA and
mortgage tailored to their needs, go cash management account platform.
through the entire application process

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‘We would like our site to enable our clients to view all their finances in
one place - even where we don’t manage all their affairs.’
Clive Kornitzer, Special Projects Director, CharcolOnline

The technical and visual design of the site Charcol is now looking to the future of its Toby Strauss
is client-led, and based on functionality site. Clive Kornitzer, Director of Special Chief Executive,
CharcolOnline
rather than gimmicks. To suit clients’ Projects, predicts that the financial
needs, the site is straightforward to products market will move towards a
use and downloads more integrated approach. ‘We would like
Web design is quickly. But most our site to enable our clients to view all
based on importantly, it of their finances in one place. Even where
functionality, does what clients we do not manage all their financial
not gimmicks want it to: they affairs, we want our clients to be able to
can go through the view their current and deposit accounts, Clive Kornitzer
complete process of applying for a as well as their mortgage and investments Director of
Special Products,
mortgage on the site, in most cases through the site, move money around
CharcolOnline
with no additional paperwork or face to and buy and sell equities. Although this
face contact. is a challenge, we feel that it is no less
possible than anything else that we
The site’s design also suited Charcol’s have achieved to date.’
business needs, which were to cut
down the amount of processing involved Kornitzer does, however, sound a note of
in each mortgage transaction. Because caution for Charcol’s competitors. ‘It
there is a lot of selection of products takes longer, it costs more and it’s much
and vetting of the clients involved in the harder to develop
early stages of the online process, the Clients want to see a site like ours
client is less likely to be refused a all their finances than we realised.
mortgage by their chosen provider. in one place Having Charcol’s
strong brand and
A ‘plug and play’ design has been used over 25 years’ experience as an IFA
which means that a module can be behind us is an integral part of
removed or re-designed easily if it is not CharcolOnline’s success and the
meeting expectations. Things can results have proved all that hard work
change fast, and the capabilities of the was well worth it. We view our online
site allow Charcol to remove products proposition as part of an integrated
which are no longer available and add bricks and clicks strategy. Our clients
new ones quickly and easily. value the ability to transact online in
the knowledge that face to face advice
is just a click away.’

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‘Design is the creative force by which we realise our


hopes for a better environment.’ (the late) Jimmy Knapp

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ADVICE 11 CONNECTING DESIGN & MARKETING

Two products. They do exactly the same thing just as well as each
other. They look and feel similar. They are identically priced. As a
consumer, how do you choose between them?

You’ll probably go for the brand you feel most empathy for. collated from hundreds of questionnaires. Qualitative market
You might have seen advertising which appealed to you. Your research is more in-depth, using controlled interviews with
friends might have bought one recently. You might like the individuals or small demographically differentiated groups to
product’s image. What you’re doing is identifying with the softer, eke out attitudes and opinions. Design research can, in
emotional resonance of a brand. What does it say about you addition, help to discover customers’ unexpressed needs
that you own an Apple iBook rather than a Sony Viao PC? That because it is not predicated solely on existing knowledge.
you prefer Nike to Adidas trainers? That you drink Buxton mineral These findings may then be filtered through into design
water rather than Evian? That you’ve plumped for an Orange concepts and product planning.
mobile phone as opposed to one from Virgin? They’re subtle
signifiers, but consciously or subconsciously they say something Both marketing and design play a pivotal role in product
about you, your choices, and the kind of person you are. planning. Whether you’re involved in the design of a financial
service, a website or a machine tool, you need to bring
It’s the role of marketing, working in tandem with design, to together the same basic elements. Firstly, the needs of the
create desirable auras around brands. Together with market end-user within the context of the market. Then, your company’s
research, marketing and design are key strategic components of resources - these may include technology, manufacturing or IT.
business which have a significant mutual dependence. All three Finally, your corporate vision and strategic objectives. These
are concerned with connecting to customers and determining fundamental parameters will define your product.
the look and feel, features, functionality and appeal of a
service or product range. They are collectively responsible for Valid, intelligent marketing should be able to express eloquently
reaching out and touching the consumer, so a close relationship the ‘soul’ of the product. It should use elements unearthed
and a shared strategic vision is vital to market success. during the research and design phases of the production
process to entice and delight potential customers. In other
The aim of market research and design is to find out what really words, it should take what’s already there and build a credible
makes consumers tick. To find out what appeals to them and story around it. And if it’s a story people want to hear, they’ll
why. Quantitative market research tends to rely on results buy your product rather than your competitor’s.

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CONTACTS
Design Council
www.designcouncil.org.uk
CBI
www.cbi.org.uk

Other useful websites: Patent Office


DTI/Design Council www.patent.gov.uk
Living Innovation website Small Business Service
www.livinginnovation.org.uk www.sbs.gov.uk
DTI Future and Innovation Unit Trade Partners UK
www.innovation.gov.uk www.tradepartners.gov.uk
Design Business Association UK online for business
www.dba.org.uk www.ukonlineforbusiness.gov.uk
Centre for Sustainable Design Fit for the Future
www.cfsd.org.uk www.fitforthefuture.org.uk
Engineering and Technology Board Design Directory
www.etechb.co.uk www.designdirectory.org
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Publication Team
Project Manager: Paul Sykes, Design Council
Contribution: Dr Tim Bradshaw, CBI
Design: Heard Design
Copy: Mattison PR
CBI Part 1_a/w 23/5/02 1:34 pm Page 1

The Design Council’s purpose


is ‘to inspire and enable the
best use of design by the UK,
in the world context, to improve
prosperity and well-being’.

Design Council
34 Bow Street
London
WC2E 7DL
United Kingdom

Phone +44 (0)20 7420 5200


Fax +44 (0)20 7420 5300

www.designcouncil.org.uk
info@designcouncil.org.uk

In partnership with:
Confederation of British Industry
Centre Point
103 New Oxford Street
London WC1A 1DU
United Kingdom

Phone +44 (0)20 7395 8071


Fax +44 (0)20 7497 3646

www.cbi.org.uk
enquiry.desk@cbi.org.uk

March 2002
Published by the Design Council
Registered charity no. 272099
© 2002 The Design Council
ISBN 1-904335-00-4

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