The growing role of design in portfolio management

Design plays a crucial role in the battle for differentiation. It is design that structures customer expectations, design that evokes brand values, creates visible differences and develops new favourites on mature markets. This is why it has to observe several key principles:

  • The principle of radicalisation. Design cannot be vague – since the strategy is to attack the market with a small number of brands, they must be clearly defined, with a specific design, all the more so since organizations have a natural tendency to soften the hard edges, which leads to a resemblance on the shelves that has a dramatic effect on perceived differentiation. Radical design must also compensate for the increasing lack of differentiation due to the industrial logic of platforms. There is no place on today’s mature markets for halfhearted designs. If there is a brand identity, it must be clearly visible.
  • The principle of externalisation. If the company is responsible for defining the story to be told by each brand, that is, creating its identity, it is important to seek outside help for the design itself by appointing a designer for each brand who is totally committed to that brand. Thomson did the opposite and entrusted the design of its four brands, Thomson, Saba, Telefunken and Brandt, to the same designer, Philippe Starck, who was a brand in his own right. This is why, within an organisation, design must be positioned at brand level, not corporate level, even if this requires robust coordination to avoid replication between brands, a tendency that is all too frequent. But this risk is avoided if the company appoints an external designer, for each brand, who is inspired by its strategic platform.
  • The principle of business. The function of design is to promote and develop business, not art. Design should not become selfabsorbed. For example, the aim of designing a coffee pot is not to enable consumers to invite their friends round to admire their coffee pot, but to offer them a good cup of coffee. In short, the purpose of design is to enable the brand not just to look good but to function efficiently.
  • The principle of courage. The key question in design is whether a design can be properly tested. Certainly, the ergonomics and functionality of a product must always be tested at user-status level. But apart from that, what is the relevance of a few individuals’ (interviewees’) opinions of a design when it is, by definition, the opinion leaders (the press) who decide whether or not a product is in good taste when it is launched in a few months’ or years’ time? Design is a risk. In the car sector, for example, how can you predict which design will be perceived as avant-garde in another four years, in the event that the brand could be said to be a trend setter? Renault took the risk with its audacious (some will say over-audacious) design. But four years ahead of its time, it is difficult to forecast perceptions with any degree of accuracy.
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Does The Corporate Organization Match The Brand Portfolio?
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A Local And Global Portfolio – Nestlé

Strategic Brand Management Related Practice Tests

Strategic Management Practice Tests
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