Page 355 - Marketing Management

332 PART 5 SHAPING THE MARKET OFFERINGS

One basic strategy is to eliminate the root causes of controllable returns while developing
processes for handling uncontrollable returns. The goal is to have fewer products returned and put
a higher percentage back into the distribution pipeline to be sold again.

Road Runner Sports San Diego–based Road Runner Sports sells
running shoes, clothing, and equipment through multiple channels. The firm trains its sales-
people to be as knowledgeable as possible about recommending the right products. As a re-
sult, its return rate on running shoes is 12 percent, noticeably below the industry average of
15 percent to 20 percent. Road Runner also uses SmartLabels—prepaid, preaddressed,
bar-coded return labels—to make returns quick and easy for those customers who need
them. 17

Design

As competition intensifies, design offers a potent way to differentiate and position a
18
company’s products and services. Design is the totality of features that affect how
a product looks, feels, and functions to a consumer. Design offers functional and aes-
thetic benefits and appeals to both our rational and emotional sides. 19
The designer must figure out how much to invest in form, feature develop-
ment, performance, conformance, durability, reliability, repairability, and style.
To the company, a well-designed product is easy to manufacture and distribute.
To the customer, a well-designed product is a pleasant to look at and easy to
open, install, use, repair, and dispose of. The designer must take all these factors
into account. 20
As holistic marketers recognize the emotional power of design and the impor-
tance to consumers of how things look and feel as well as work, design is exerting a
stronger influence in categories where it once played a smaller role. One factor fuel-
ing Hewlett-Packard’s rise in the PC market is its strong emphasis on design, forcing
Dell and others to become more style-conscious to compete. The rationale behind
this shift is clear: in one survey consumers reported they would pay an average of
$204 more for a high-end laptop that was well-designed. 21
Road Runner Sports goes to great Certain companies and countries are winning on design.
lengths to minimize the number of
product returns from customers.
Top Design Companies and Countries Some coun-
tries have developed strong reputations for their design skills and accomplishments, such as Italy
in apparel and furniture and Scandinavia in products designed for functionality, aesthetics, and
environmental consciousness. Finland’s Nokia was the first to introduce user-changeable covers
for cell phones, the first to have elliptical-shaped, soft, and friendly forms, and the first with big
screens, all contributing to its remarkable ascent. Braun, a German division of Gillette, has elevated design to
a high art in its electric shavers, coffeemakers, hair dryers, and food processors. Kohler brought art and de-
sign to luxury kitchen and bath fixtures and faucets. The International Design and Excellence Awards (IDEA)
are given each year based on benefit to the user, benefit to the client/business, benefit to society, ecological
responsibility, appropriate aesthetics and appeal, and usability testing. In 2009, Samsung won eight awards,
Apple seven, Dell Experience Design Group six, and GE Healthcare five. One of the more successful design
companies is IDEO. 22
In an increasingly visually oriented culture, transmitting brand meaning and positioning
through design is critical. “In a crowded marketplace,” writes Virginia Postrel in The Substance of
23
Style, “aesthetics is often the only way to make a product stand out.” The GM design team for the
new plug-in electric 2011 Chevy Volt wanted to make sure the car looked better than other electric
car models.As the Volt design director said,“Most electric cars are like automotive Brussels sprouts.
They’re good for you, but you don’t want to eat them.”