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Product develoPment Developing market consumers 1. Shake up your thinking workshop to discuss how business-to- 2. Start from scratch A crowded street in São Paulo, Brazil. Emerging By now, most businesses recognise that business customers in smaller, tier-two The combination of rapid change and winning conscious and heightened competition in emerging and -three cities differed from those in the trying to interest discerning emerging are both price market consumers in stripped-down, markets puts a premium on useful largest urban areas. The ‘aha moment’ demanding came when marketing and pricing experts low-cost versions of the products they sell customer insights, even as they become teamed up with product engineers to harder to get. Indeed, poor infrastructure, globally is a recipe for letdown. Yet many products for vast distances and fast-changing customer ask whether the company might offer companies still aren’t fully aware of how far price discounts to some customers in segments make traditional fact-gathering they must go to differentiate their products approaches (such as ethnographic for these customers. Top companies, smaller cities in exchange for slightly lower network uptime – as opposed to by contrast, are highly disciplined, even research or even focus groups) expensive emerging and time-consuming. Therefore, top the near-100% guaranteed to commercial relentless, about setting priorities and putting aside existing assumptions. customers in major metropolitan areas. companies don’t pass up any opportunity, however modest, to sharpen their Leaders start by identifying the most The company ultimately found it could consumers understanding of customer needs. lower its price for some customers in important feature or two and focusing heavily on them. This approach is Collision workshops – which might tier-two cities, making its offer highly competitive there, while slashing the cost include customers but primarily convene quite different from the one that many suppliers, marketers, product engineers and other company representatives – to serve by a factor of four through the companies tend to have: regarding all features as equally valuable and preferring use of a different network architecture To master the extremes of a fast- can help. They offer a low-tech way and a simpler, redesigned version of its more rather than fewer features – an changing competitive landscape, of quickly generating and discussing standard network-switching equipment. attitude deeply ingrained in some Another way organisations shake up businesses must challenge their customer insights and a forum to identify their thinking is to look beyond traditional engineering cultures. The farm-equipment maker started hypotheses that companies can later test assumptions about designing, more traditionally. To some extent, these competitors for design ideas. A low- with a feature that its analysis showed developing and manufacturing products meetings represent a cheaper and more cost appliance manufacturer learned of mattered most to small-scale farmers: the for emerging market economies. flexible way of generating the kinds of a more high-tech approach for coating durability of tyres. Farming in one region its fans by studying painting techniques required considerable back-and-forth insights that research and development pioneers achieved through formal, developed in the automotive industry. driving in mixed terrain (tar roads and soil). multidisciplinary R&D labs. As with these The fan-maker’s executives had always By redesigning tyres to maximise their hERE ARE nUmERoUs venerable examples, an important goal resisted technological solutions, preferring useful life, the company made its vehicle hurdles to be faced when of collision workshops is to challenge to substitute labour for capital because of far more appealing to local customers. t developing products for ingrained habits of thought by pulling low workforce costs. But after studying This organisation’s crucial willingness to fast-changing emerging markets – together representatives from functional the automakers’ approach, which kept challenge its assumptions ultimately led environments where customers are both groups that normally don’t interact. the thickness of each coat of paint to to a broader set of improvements. extremely price conscious and demanding. The resulting insights can be quite specified levels, the executives changed By contrast, companies that fail to Against this backdrop, a growing number useful. An automotive-parts manufacturer their minds. Ultimately, a 4% savings in re-examine the assumptions inherent of companies find that they must re- in a fast-growing Asian market used a paint costs more than offset the expense in their product designs risk making examine their traditional approaches and collision workshop to identify a new niche of new equipment. ill-informed decisions. A global maker tailor them to these realities. in its wheel business. During a discussion We call this process ‘design to value’. about products for passenger vehicles, a In some cases, designing to value means marketer mentioned that the company’s Look beyond applying traditional tools in new ways, in wheels were heavy, an observation he’d traditional others adopting a new mind-set about heard from a customer. This comment, what customers want and how to deliver it. made in passing, intrigued the engineers competitors for It’s still early days in this space, and in the room, who went on to sketch design ideas no organisation has yet mastered the out a counterintuitive proposal that the challenges. But a look at the practices company ultimately refined and adopted: that leading product developers using a slightly higher grade of steel use offers at least three lessons for to make wheels lighter and more fuel A tractor manufacturer companies wrestling with the extremes efficient. Even though the new steel was operating in an emerging of competition in emerging markets. The more expensive, the company lowered market with diffcult mixed urgency to adapt will only increase as its total costs because the wheels now terrain redesigned its tyres consumption in these markets contributes required less steel than they had before. for longer, more durable life and became very a growing share of global economic A large telecommunications and popular with local buyers growth in the decade ahead. data-services provider used a collision 34 strategicmarketingafrica Second quarter 2014 Second quarter 2014 strategicmarketingafrica 35