The business environment is fast-changing and competitive, and as a result, entrepreneurs need to challenge their company’s position concerning the design, development and manufacture of products.

According to business consultants, it is necessary to use market research to identify the unmet needs of the clients.

In addition, the use of information and communications technology and other business technologies can also increase efficiency and create more time to focus on product innovation, marketing optimisation as well as customer service.

IT professionals note that the use of advanced technology can increase a business’ competitive advantage and its use should be considered whenever there are plans to improve on performance.

According to Mckinsey & Company in its quarterly report, a large automobile company designed, developed and launched a commercial truck in India’s competitive market but it turned out to be a disappointment.

The report tilted, ‘Developing winning products for emerging markets,’ states that the company had not adequately accounted for India’s poor roads and infrastructure, which often prevents vehicles from maintaining the most efficient operating speeds.

It says even though the truck’s price was competitive against local offering and half that of a comparable vehicle in developed markets, in the buyers’ eyes the potentially higher utilisation wasn’t worth the expense.

It adds that multinationals tend to suffer such setbacks more often than local players do, but this company’s example underscores the difficulty of understanding customer needs in fast-changing emerging markets.

According to the report, this is an example of the challenges of designing, developing, and manufacturing products for fast-changing emerging markets—environments where customers are both extremely price conscious and demanding.

Mckinsey & Company explains that the process is called “design to value.” In some cases, designing to value means applying traditional tools in new ways, in others, adopting a new mind-set about what customers want and how to deliver it. The urgency to adapt will only increase as consumption in these markets contributes a growing share of global economic growth in the decade ahead.

Renew your thinking

The research shows that the combination of rapid change and heightened competition in emerging markets put a premium on useful customer insights, even as they become harder to get.

It notes that poor infrastructure, vast distances, and fast-changing customer segments make traditional fact-gathering approaches (such as ethnographic research or even focus groups) expensive and time-consuming. Therefore, top companies don’t pass up any opportunity, however modest, to sharpen their understanding of customer needs.

It adds, “A large telecommunications and data-services provider used a collision workshop to discuss how business-to-business customers in smaller, tier-two and -three cities differed from those in the largest urban areas. The “aha moment” came when marketing and pricing experts teamed up with product engineers to ask whether the company might offer price discounts to some customers in smaller cities in exchange for slightly lower network uptime than the near-100 per cent guaranteed to commercial customers in major metropolitan areas.

“Another way companies shake up their thinking is to look beyond traditional competitors for design ideas. A low-cost appliance maker learned of a more high-tech approach for coating its fans by studying painting techniques developed in the automotive industry.

“The fan maker’s executives had always resisted technological solutions, preferring to substitute labour for capital because of low workforce costs. But after studying the automakers’ approach, which kept the thickness of each coat of paint to specified levels, the executives changed their minds.”

Start from the scratch

Mckinsey’s report says that most companies recognise that trying to interest emerging-market consumers with low-cost versions of the products they sell globally is a recipe for letdown.

It adds that many companies are still not fully aware of how far they must go to differentiate their products for these customers. Top companies, by contrast, are highly disciplined, even relentless, about setting priorities and putting aside existing assumptions. Leaders start by identifying the most important feature or two and focusing heavily on them.

It says, “By redesigning tyres to maximise their useful life, the company made its vehicle far more appealing to local customers. This company’s crucial willingness to challenge its assumptions ultimately led to a broader set of improvements.

“By contrast, companies that fail to re-examine the assumptions inherent in their product designs risk making ill-informed decisions. A global maker of electrical products learned this the hard way when it introduced a mini-circuit-breaker system to offer customers in India better protection from the country’s frequent power fluctuations and brownouts.

“The product, adapted from a comparable developed-world model, was technically sound and arguably superior to the alternatives. Yet sales suffered as customers turned to products from competitors offering an older—and cheaper—“use and throw” fuse technology. Not until the company started over with a new design incorporating the older technology did the product became competitive.”

Design unique products

It has been discovered that a final way top product makers separate themselves from the competition is to go on challenging their assumptions well into the manufacturing process. Surprisingly, perhaps, though most global companies have manufactured products in emerging markets for years, they typically don’t go as far as they could to design them with emerging-market customers and workers in mind.

The report notes that clever product makers look for easy opportunities to tweak their products and processes further and thereby lower their capital costs. To be sure, this is good practice anywhere companies operate, but an especially important one in emerging markets given the fierce levels of competition there.

For example, it adds that a large producer of engines and industrial equipment recognised that by making straight forward design changes to one of its drive-shaft assemblies, it could reduce the complexity of the machines needed to build them. The changes helped reduce costs for materials by 10 per cent, in part by enabling the company to source more goods and equipment from local suppliers

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