In this blog post, we examine in detail why consumer-centric product development is a core strategy that dictates a company’s success or failure, using various domestic and international case studies.
We live surrounded by countless products in our daily lives. These products are essential tools that provide us with a comfortable life. As society evolves and technology advances, people increasingly seek more convenient and efficient products. A prime example is the iPhone, currently enjoying immense popularity. This product captivates many customers with its attractive design and software that sets it apart from other smartphones. Observing the iPhone, we sometimes wonder, “Why can’t Korean companies create products like this?” We also find ourselves thinking about products we use daily: “If only this feature were added” or “If this design were applied, it would be more popular.” So why can’t companies create products that perfectly meet consumer demands? Contrary to what we might think, the process of creating a product is never easy.
The product creation process consists of six major stages. The first stage is ‘Planning,’ where a general outline for the product design and production is established. The second stage is ‘Concept Development,’ where the core concept for the product is defined. The third stage is ‘System-Level Design,’ where the high-level approach and materials for building the conceptualized product are determined. The fourth stage, ‘Detail Design’, finalizes the detailed design specifications. The fifth stage, ‘Test & Refinement’, involves inspecting and refining the manufactured product. Finally, in the sixth stage, ‘Production Ramp-Up’, the final product undergoes inspection before being released to the market.
Among these stages, examining ‘Concept Development’ in detail reveals it can be divided into ten distinct steps. This process begins with identifying customer needs, continues through defining the product’s target characteristics, creating multiple concepts, selecting one for testing, and proceeding through several other stages. Among these, ‘Identifying Customer Needs’ is a critically important step that can determine the product’s sales volume. Products that fail to properly reflect customer needs are unlikely to succeed even if launched.
Currently, most companies predict customer needs through internal meetings rather than directly listening to customer opinions. While this approach may simplify the process, it often yields poor results. Relying solely on the company’s perspective to establish concepts increases the likelihood that customer needs will not be properly reflected in the product. In such cases, consumers will accumulate dissatisfaction with products that fail to fully meet their needs, and the company will face declining sales and customer complaints.
Companies that persist with this approach to product development will ultimately see slow progress and are likely to fall behind competitors. A prime example is Sony. Sony was a dominant force in portable devices during the Walkman era, but the situation changed with the advent of MP3 players. While most MP3 players supported all music file formats, Sony insisted on its proprietary music format. Customers pointed out this inconvenience, but Sony ignored their feedback and maintained its policy. As a result, customers abandoned Sony.
As seen in this case, for a company to survive in competition, it must establish product concepts that reflect consumer opinions. A prime example of a company that excelled at this is Japan’s Matsushita. Matsushita attempted to sell dishwashers, commonly used in the US, in Japan, but initially faced consumer rejection. After investigating why consumers weren’t buying dishwashers, the company discovered several interesting opinions. First, “They’re too big to fit in the kitchen.” Second, “They use too much water, increasing living expenses.” and third, “they don’t clean as well as washing by hand.” Matsushita revised the product concept based on this feedback. The size issue was resolved by finding the optimal dimensions through home visits, while the water usage problem was addressed by improving nozzles and enhancing water-saving features, which actually reduced water bills. The cleaning power issue was addressed by introducing ultrasonic technology, providing superior cleaning power compared to hand washing. This improved dishwasher attracted consumer interest and ultimately achieved success in the Japanese market, capturing over 60% market share.
A similar case exists in Korea. Ahead of launching a mobile phone, LG Electronics formed a consumer test panel of 100 customers in their teens and twenties to gain a competitive edge. Reflecting this panel’s feedback, unnecessary features were removed and the design simplified, resulting in the creation of a new phone called the ‘Chocolate Phone’. This phone achieved sales of over 6 million units in Korea.
I also had a similar experience. When my cousin worked at a company publishing workbooks for middle and high school students, she once asked me for feedback on the workbooks. I suggested compiling problems with high error rates into a separate section. Sure enough, the new workbook included a supplementary booklet containing only those high-error problems. Seeing this workbook gave me a very peculiar feeling, and I actively promoted it to my friends. Consequently, this workbook recorded higher sales than the publisher’s other workbooks.
Companies that actively incorporated consumer feedback into their product design succeeded in the market, while those that didn’t disappeared. In modern society, consumers can freely express their opinions online, making public opinion form easily. Therefore, a company’s success hinges on how well it reflects consumer demands. Consequently, companies must respect communication with customers and design their products accordingly.
