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Developing a product design and marketing messages for:

• 39 of 100 users, ages 35-45, subscribes to 2 electronic device related magazines/newsletters per year, from San Jose, CA, average time on PC = 9.0 hours/day, average TV watching hours/day = 3.0

seems to be more difficult than to develop and market to:

• "Bennett", a 37 year-old, tech geek, from San Jose, California, who spends 9 hours a day on a computer, doesn't have a girlfriend, wears ties with short sleeve dress shirts, and lusts after the IPhone as much as he does Jessica Alba in Dark Angel reruns.

Bennett is a made-up guy.  But he'll probably add a lot of value to a product designer or marketing team when developed from the above spreadsheet.  Far too many companies and entrepreneurs are sinking money into products that will never get off the ground because they did not let the market lead them down the path. 

User-driven design, user-led innovation...development...marketing.  Sure, all of these buzzwords sound great.  Companies often employ a number of techniques into their development processes, but the kernels of valuable information they extract often get tainted, lost in the shuffle, or dropped entirely, as the marketing and engineering processes water down what started the whole thing.

Marketing and design personas are a tool that have become increasingly popular in the last few years, as a way of taking quantitative and qualitative data and fleshing it out into a story or persona of who their customers are and what their customers do.   These can get off track as well, particularly if they're taken too far and the real purpose is lost.  But they still seem to be a useful tool in giving people something emotive and substantive to connect and work with, rather than reams of data.

How do we get from data to..."Bennett"?  The best design and marketing firms in the world get intimate with their potential customers by interviewing them, watching them in action, and staving off assumptions about them until they have a significant amount of research--qualitative and quantitative.  Based on this research, they craft stories about their intended user which become personas. They are experts in the process just as much as the market.  That's why firms like IDEO can work on all kinds of products for different companies in different industries.  They're masters of the process.   

Here are some useful "how-to" resources to help you resuscitate, refresh, and reinvigorate the process of understanding your customer and letting them lead your creation of design and marketing stories and personas:

• IDEO's Five Point Model for Strategy by Design - article in Fast Company magazine

• Getting From Research to Personas: Harnessing the Power of Data - article by Kim Goodwin, Director of Design at Cooper, through MarketingProfs.com

• Do You Know Personas - blog entry at Pragmatic Marketing

• My Shoe Fetish and Why Personas are Invaluable for Marketing - blog entry at Marketingsherpa

• Several useful articles at Cooper's Journal of Design

Gilroy, California, the "Garlic Capital of the World".  This town holds an annual garlic festival and delivers the bulk of the garlic eaten in the United States.  But, this garlic isn't grown here in Gilroy anymore.  It's imported from China.    

The overfarming and commoditization of garlic in Gilroy led to a decrease of Gilroy's garlic value in the market by over $70 million.  Chinese garlic sales are up 5000%.  But, while Gilroy's own garlic has gone downhill in dramatic fashion,  garlic farming is still thriving in the United States: just in New York rather than Gilroy.  In New York, it is much more difficult to farm garlic than it is in Gilroy.  Regardless, chefs and garlic connoisseurs (if there is such a thing), believe that the taste of New York garlic is worth paying a premium for--whereas Gilroy garlic, not so much. 

Seth Godin, in his book The Big Moo: Stop Trying to be Perfect, and Start Trying to be Remarkable, explains the above story and the importance of brand.  Godin points out that as soon as Gilroy sold their garlic far and wide, by making it a cheap and boring commodity, they set themselves up for new entrants to come in and create a tough price competition.  To try and fend these new competitors off, they began over-planting. 

Godin explains: "Once you make the standard, you've created a commodity.  Customers will seek out stuff that is the same as your's, but cheaper.  That is why China won."  New York farmers, who run garlic farms that are but a fraction of the size of California mega-farms, are profiting from and ecstatic about the prices at which they sell their garlic.  These farmers are thriving because they've protected their brand and product from becoming average and differentiated from competitor garlic by price only.  Unlike the price of garlic, the brand of garlic is not something that new companies from around the world could come into the market and compete on easily.

Why is this so difficult to do? 

Gordon Graham writes the blog, Broken Bulbs: Innovation.  Graham is currently in Taiwan performing post graduate research on the innovation strategies of Taiwanese firms active in multiple country markets.

In a post entitled "Brand Innovation in Taiwan", Graham writes:

Here in Taiwan many of the high-profile OEM/ODM firms are having a go at developing their own brands as a way out of the price game and its teeny-weeny margins. Though many firms are attracted to the idea of selling their own-branded products, they are finding that moving from OEM/ODM is not as easy as it looks. Many have given up -- retracting back into what they do best: manufacturing complex, mass-produced electronic products in low-wage locations for other firms. Why is the move forward into brands so difficult for these Taiwan-based firms?

Some of the interesting reasons he cites?

- It requires patience. It can take years to get a return on the investment.

- It requires a deep interest in and understanding of country-markets in far away lands.

- It requires an interest in and understanding of other cultures.

- It requires a change in attitude: you can't treat your staff as if they still work in a factory.

- It requires a loyal and committed staff that buy into the brand idea.

- It requires moving directly into the media spotlight -- something many Taiwan-owned businesses prefer not to do.

- A brand requires an authentic story -- not anonymous, behind-the-scenes PR.

- A brand is often linked to a country of origin and this needs to be actively articulated.

As the Taiwanese are finding out, branding is a challenge.  Branding is about creating and spreading ideas, messages, and experiences.  Cooking and eating garlic is pretty standard, unless it's $9 a pound garlic from NY.  That's an experience.  Talking on a cellphone is pretty standard, no matter the phone--unless it's an IPhone.  Branding takes time, resources, and care.  So does manufacturing high-quality products.  But branding is altogether quite different than what's required to manufacture 100,000 units of a cell phone.  Those that make the investment in brand, can sell a bottle of water for up to 1000x the price of tap water.  They can sell garlic up to $9 per pound.  A cell phone for $600.  And maybe...$300 socks someday? 

In branding, the sky is the limit.  In manufacturing, you can hit the floor pretty fast and before you know it, your product is produced as cheaply as possible in a given location and there is no way to accomplish this task more cheaply except by picking up and moving to a new destination.

It's no secret that fantastic profits being made now and in the future are and will be made by companies that are the most adept at managing their brands in the minds of consumers while producing their products cost-effectively in offshore destinations--thus maximizing both ends.  Both activities require competency to be successful, and companies are generally better in one of these activities.  To be successful in the other, they either acquire the talent or outsource the task.

What are you good at?  Should/Can you acquire or outsource the other?      
 

$300 socks.  No way.  But I wonder how many people would have shaken their heads 30 years ago at the prospect of $300 jeans.  I still shake my head.  But they're around and people pay for them.  Sure--they offer much better quality material and craftsmanship--but there's an intangible value, created out of thin air, that for some people is real.  The value?  Identity?  A meaningful experience? 

This last issue of Fast Company magazine has served up an interesting article on this, proposing that $300 socks may indeed be inevitable.  Dan and Chip Heath, authors of Made to Stick, have a routine column going in the magazine, and their last article regarding "The Inevitability of $300 Socks", caught my attention.  They're not the first to observe and comment on a growing trend of niche markets, connoisseurship, and customization.  Seth Godin has been heralding the idea for some time that "Small is the New Big".  The number of microbreweries of beer and coffee have risen sharply in the last decade (some of the products that I've been personally paying attention to).  In addition, as the Heaths point out, jeans, to the chagrin of many a teenage parent, have gone from a $30 run-of-the-mill product to $300 a pair.

Their claim?  The concept of luxury is evolving from being less focused on status and more centered around personal pleasure and self-expression.  The article quotes Zain Raj, executive director of the ad agency Euro RSCG, Chicago, who looks back at the 1980's and points out that "You wore $200 pants with an $80 shirt and a $65 tie.  There was a relative order to the world in terms of value.  Today, it's all personal".  Today, the Heath's point out that it's not uncommon to see people wear $300 jeans with $8 T-shirts or people who have a hard time affording their rent, pay for $15 a pound for premium coffee. 

Their point?  "Luxury goods are no longer a sign of status; they're the mark of connoisseurship".  The difference between a product being run-of-the-mill with little profit margin, to a product that can command a premium from a group of connoisseurs, is the ideas behind them. 

This idea goes beyond just the concept of a product for a niche market.  It's more about an idea that lends itself to a consumer's identity and experience.  Think Iphone.  There are the people who paid $500 for an Iphone because they felt the functionality would improve their lives.  There are those that believed that something about holding and using an Iphone in public conveyed specific messages of status to others.  But I think the people I saw camped outside in front of the Apple store the night before the release--found more value packed into the $500 Iphone than either of these two groups.  They got an interactive experience with other people camped on the sidewalk who felt the same way.   

It's similar to when one guy with a Red Sox hat sees another guy across the bar with a Red Sox jersey--and gives the "yeah, man" nod of approval.  Interacting with others who feel the same way is affirming, offering a sense of belonging and identity.  An Iphone sidewalk camper can look at the guy or girl shivering on the pavement next to them and say "Your're a tech geek.  I'm a tech geek.  Let's revel together in our tech geekness".  I'm not knocking it, because I do the same thing in other ways.  I bought the $30 concert t-shirt at a Page & Plant (Jimmy Page and Robert Plant of Led Zeppelin) reunion concert.  I show this to other Led Zeppelin fans and I am instantly elevated to "cool" status.  I connect with a fellow fan.  All the while, I am reminded of how great the concert was.  And the experience of the t-shirt keeps on giving and that's why I paid $30 for it.  If I never went to the concert and saw it on a rack in a store--no way. 

So is it that crazy to think that $300 socks might someday do this for a group of sock connoisseurs? 

One of the great things about this phenomenon, is that it opens the door for so many small businesses and entrepreneurs, who want or are willing to cater to a specific market.  Distribution may be more manageable and building a brand and grabbing mindshare of the customers may be just as easy or easier for an unknown company as it is for an established company.  In fact, it may be much easier for a small company or start-up to do this because they can often achieve a closeness with their customer and maintain an air of authenticity more easily than a larger, more unwieldy company.  Someone did it with pants--watches, chocolate, beer, coffee, t-shirts, bags, and the list goes on.  Socks?  With the right message, communication, and a receptive audience, the possibilities are endless.