In this blog post, we will take a closer look at why consumer-centric product development is a key strategy that determines the success or failure of a company through various examples from Korea and abroad.
We live in a world of products. These products are essential tools that provide us with a comfortable life. As society changes and technology advances, people have begun to look for more convenient and efficient products. A prime example of this is the iPhone, which has recently become the most popular product. This product has attracted the attention of many customers with its attractive design and software that sets it apart from other smartphones. When we see these iPhones, we sometimes wonder, “Why can’t Korean companies make products like this?” We also think, “If this feature were added” or “This design would have been more popular if it were used in everyday products.” So why can’t companies make products that perfectly meet consumers’ needs? This is because, contrary to what we might think, the process of making a product is by no means easy.
The process of creating a product consists of six major steps. The first step is “Planning,” which is the step of making a rough plan for product design and production. The second step is “Concept Development,” which is the step of deciding which concept to base the product on. The third step is “System-Level Design,” which is a macro-level decision on how to make the product with the defined concept using which materials. The fourth step, “Detail Design,” is to finalize the detailed design. The fifth step, “Test & Refinement,” is to inspect and supplement the manufactured product. Finally, in the sixth and final stage, the final product is tested and then released.
Looking closely at the “concept development” stage in particular, this process can be divided into a total of 10 steps. Starting with identifying customer needs, the process goes through several steps, including defining the target characteristics of the product, creating several concepts, and selecting one of them for testing. Among these, “identifying customer needs” is a very important step that can influence the sales volume of a product. This is because a product that does not properly reflect customer needs is unlikely to be successful even if it is released.
Currently, most companies tend to predict customer needs through meetings within the company rather than directly listening to customer opinions when identifying customer needs. Although the process may be easy if concepts are established in this way, the results are likely to be poor. If a company only conceptualizes a product based on its own ideas, there is a high chance that the needs of customers will not be properly reflected in the product. In such cases, consumers will become dissatisfied with products that do not fully meet their needs, and the company will suffer from a decline in sales and customer dissatisfaction.
Companies that continue to develop products in this way will eventually develop slowly and are likely to fall behind their competitors. A prime example of this is Sony. Sony was a powerhouse in portable devices during the Walkman era, but the situation changed with the advent of MP3. Most MP3 players supported all forms of music files, but Sony stuck to its own music format. Customers pointed out this inconvenience, but Sony ignored their opinions and maintained its policy. As a result, customers left Sony.
As shown in the above example, companies need to establish product concepts that reflect consumer opinions in order to survive in the competitive market. A representative company that has done this well is Japan’s Matsushita. Matsushita tried to sell dishwashers that were commonly used in the United States to Japan, but they were initially rejected by consumers. After investigating the reasons why consumers were not buying the dishwashers, the company found some interesting opinions. First, “it’s too big to install in the kitchen,” second, “it uses a lot of water, which is a burden on the household budget,” and third, “it’s not as clean as washing dishes by hand.” Matsushita revised the product concept to reflect these opinions. The size problem was solved by finding the optimal size through home visits, and the water usage problem was solved by improving the nozzle and increasing the water-saving function, which in turn saved on water bills. The cleaning power problem was solved by introducing ultrasonic technology, which provides better cleaning power than washing dishes by hand. The improved dishwasher attracted the attention of consumers, and as a result, it was a success in the Japanese market, recording a market share of over 60%.
There is a similar case in Korea. LG Electronics formed a consumer test panel of 100 customers in their 10s and 20s to gain an edge over the competition ahead of the launch of their mobile phone. As a result of reflecting the opinions of this panel, the company removed unnecessary features and simplified the design, resulting in the birth of a new mobile phone called the ‘Chocolate Phone.’ This mobile phone has sold more than 6 million units in Korea.
I have had a similar experience. When my cousin was working for a company that published workbooks for middle and high school students, I asked for their opinion on the workbooks. I suggested that they compile and list the questions with a high error rate separately, and the newly released workbook included a separate book with only the questions with a high error rate. I felt very strange when I saw this workbook, and I actively promoted it to my friends. As a result, this workbook sold more than other workbooks from the same publisher.
Companies that actively design products by reflecting consumer opinions have succeeded in the market, while those that have not have disappeared from the market. In modern society, public opinion is easily formed as consumers can freely express their opinions through the Internet. Therefore, the success of a company depends on how well it reflects consumer needs. Therefore, companies should design products while respecting communication with customers.
