What is the relationship between a dynamically created balance and a product that sells well? In many markets including the digital device ...
What is the relationship between a dynamically created balance and a product that sells well? In many markets including the digital device and service markets, there is a “winner takes all” effect. A product that sells well takes the entire pie while other competitors end up in the dust. In the marketing and economics studies, this term is known as “herd behavior” (Banerjee 1992). Researchers who study herd behavior claim that by studying the diffusion or network model of how information spreads from one person to another, the origin of how it spreads can be identified. They also claim that mimicking consumption patterns of others based on word-of mouth and reputation will naturally lead to dominance in the market. However, can herd behavior explain how a product like the iPhone dominated the market? In fact, critics said that the iPhone was basically an iPod with a phone function when it was first released. How could an iPod with a phone function succeed based on herd behavior? There seems to be something missing here, and we need to approach this phenomenon with a different perspective than that of herd behavior.
We can think about the concept of dominant design in order to explain this phenomenon from a different perspective. Dominant design refers to a general design that applies to the entire product or service group (Abernathy and Utterback 1978; Sahal 1981; Utterback and Suarez 1993a, b). In other words, it is a design generally applied by a specific field or market during certain periods. For instance, let’s think about the design of the smartphone.
Whether it be Apple, Samsung, LG, or HTC, the external designs are hard to distinguish from each other when seen at a faraway distance. Furthermore, most other smartphones apart from Apple use the Android operating system, which makes their phones even harder to distinguish. From far away, they are rectangles with rounded edges. There is a screen that covers the front of the phone, and there are one or two buttons in the lower center of the front. When you turn on the power, a home screen appears with a grid view of square shaped applications. Take out your smartphone right now (this book is published in 2015) and you can see that your phone is quite similar to what I am describing. The concept of dominant design doesn’t only apply to smartphones, it can be noticed in many other mature markets.
Dominant design is a crucial concept in explaining the technology life cycle theory as shown in Fig. 3.3. According to this theory, a fermentation process takes place when an innovative technology is invented. During this stage, different technologies engage in a heated competition for dominance. As time progresses, a repeated reorganization of these technologies leads to a single dominant design. Once a dominant design is formed, a time of incremental developments to the dominant design takes place without much volatility to the dominant products and services. Then when a disruptive technology is born, another round of competition, the emergence of the dominant design, and incremental improvements takes place.
Professor James Utterback of MIT refers to the automobile market of the 1900s to describe the technology life cycle theory. From the emergence of the automobile market in 1894 to numerous automobile models released throughout the early 1900s, the industry hit an important point in 1923 when a total of 75 automobile manufacturers competed in the same market. So what happened in 1923? American automobile manufacturer Dodge unveiled a design that separated the interior and exterior of the car through the frame and windows, the first of its kind at the time and today a standard. Two years later, 50 % of all productions followed that design, and by 1926, more than 80 % of manufacturers were utilizing the design. A dominant design was instated in the automobile industry. After this point, designs changed incrementally, but the same dominant design still dominates the U.S. automobile market.
We can think about the concept of dominant design in order to explain this phenomenon from a different perspective. Dominant design refers to a general design that applies to the entire product or service group (Abernathy and Utterback 1978; Sahal 1981; Utterback and Suarez 1993a, b). In other words, it is a design generally applied by a specific field or market during certain periods. For instance, let’s think about the design of the smartphone.
Whether it be Apple, Samsung, LG, or HTC, the external designs are hard to distinguish from each other when seen at a faraway distance. Furthermore, most other smartphones apart from Apple use the Android operating system, which makes their phones even harder to distinguish. From far away, they are rectangles with rounded edges. There is a screen that covers the front of the phone, and there are one or two buttons in the lower center of the front. When you turn on the power, a home screen appears with a grid view of square shaped applications. Take out your smartphone right now (this book is published in 2015) and you can see that your phone is quite similar to what I am describing. The concept of dominant design doesn’t only apply to smartphones, it can be noticed in many other mature markets.
Dominant design is a crucial concept in explaining the technology life cycle theory as shown in Fig. 3.3. According to this theory, a fermentation process takes place when an innovative technology is invented. During this stage, different technologies engage in a heated competition for dominance. As time progresses, a repeated reorganization of these technologies leads to a single dominant design. Once a dominant design is formed, a time of incremental developments to the dominant design takes place without much volatility to the dominant products and services. Then when a disruptive technology is born, another round of competition, the emergence of the dominant design, and incremental improvements takes place.
Professor James Utterback of MIT refers to the automobile market of the 1900s to describe the technology life cycle theory. From the emergence of the automobile market in 1894 to numerous automobile models released throughout the early 1900s, the industry hit an important point in 1923 when a total of 75 automobile manufacturers competed in the same market. So what happened in 1923? American automobile manufacturer Dodge unveiled a design that separated the interior and exterior of the car through the frame and windows, the first of its kind at the time and today a standard. Two years later, 50 % of all productions followed that design, and by 1926, more than 80 % of manufacturers were utilizing the design. A dominant design was instated in the automobile industry. After this point, designs changed incrementally, but the same dominant design still dominates the U.S. automobile market.
Dominant Design and the Synchronization of Experience and Environment
Through what process is a dominant design created? Utterback and Suarez explain this process as a process of experimentation (Utterback and Suarez 1993a, b). A process of experimentation is a repetitive process in which diverse technologies in the form of different designs is presented to users and their feedback and reactions collected.
However, a design does not dominate the market simply through technological excellence. Only a design that “makes sense” to users can become a dominant design. A good example is the Hoover, a vacuum cleaner brand. As the GDP and consumption increased in the U.S. after World War II, almost every household was able to afford a Hoover. The Hoover in turn came a symbol of American wealth and a standard in every household and the word ‘Hoover’ replaced the term ‘vacuum cleaner’ for the entire product group. Other examples of brand names that replaced the relevant term for the product category were the Xerox photocopy machine and the Jeep automobile.
How do such brands get so strongly placed in people’s minds? I think this is due to the synchronization of the environment and experience. People are influenced by socio-cultural, technological, and economic environments while using products or services. Oppositely, people also influence these environments through sensual, judgmental, and compositional experience. As mentioned previously, a person can have a real experience only when a point of balance is achieved between the external environment and human experience and additionally when a product or service is able to provide that point of balance to users. Basically, socio-cultural, technological, and economic environments influence human experiences of sense of presence, locus of causality, and relational cohesiveness, and vice versa. A point of balance is created through a tight relationship between experience and environment, and when this point of balance is expressed appropriately through a product or service, people are able to have a real experience. A real experience leads people to the belief that their lives have become more fulfilling. This is the point when a product or service will most likely be recognized as the dominant design.
For example, let’s think about the history of Hollywood sound films. With the introduction of sound films in the 1930s, the American movie industry hit a golden age. However, the 1930s was also the period of the Great Depression. Millions of people were affected by the economy. However, the masses were partly able to heal their fatigue and devastation through the fantasy worlds shown in the movies. People watched movies through large screens. A high level of a sense of presence was important as people immersed into the movie’s context and characters. Hollywood introduced the sound film method to meet the innate needs at the time and thus introduced changes to the socio-cultural and technological environments. Furthermore, the alignment of the external environment and innate experiences of people led to the recognition of the sound movies as a dominant design.
As a more recent example, let’s think about the iPhone. Desktop computers that take up a lot of space on desks are fast losing their position as the main device that people use when searching for information. People today are busy and possess the need to get things done on the move, and smartphones such as the iPhone have the potential to effectively provide a solution for this need. Furthermore, the advancement of mobile processors has led to matching levels of performance with desktops. Prices of full touch LCD screens that are able to support multi-touch functions have decreased dramatically, and the combination of multiple sensors has led to the iPhone being able to take care of most of our work. This shows that a technological environment has been formed where user initiative is high and the locus of causality is internal. The iPhone was able to provide the point of balance that experience and environment created to become a dominant design.
The Dominance of Dominant Design
The greatest influence of a dominant design is the effect of creating a de facto standard. A de facto standard causes competitors’ products and services to fall in line with the dominant design. Technically, it is not a standard, but in reality, it does possess the advantages of a standard. When a dominant design becomes the de facto standard, the providing company gains a competitive advantage that is hard for other firms to replicate. First, the scale of economy cannot be ignored. Since its product dominates the market, the relative cost of production will be lower than for other companies. Also, users will become accustomed to their product through learning effects, and their production methods and service distribution quality can all be increased quicker than their competitors’.
Intellectual property such as patents for a dominant designs can further enhance competitiveness. Let’s go back to the example of the Apple vs. Samsung lawsuits, mentioned earlier. Whether it was a coincidence or not, when the U.S. court ruled that the Galaxy model of Samsung infringed upon Apple’s patents, many of those elements were similar to the elements of the dominant design. What is the reason for this? When a dominant design surfaces, competitors must apply that dominant design in order to survive in the market because most users want the same experience under specific contexts. The dominant design offers that experience to users.
An Exception to Every Rule
The socio-cultural, economic, and technological
environments of a specific age influence human experience. Oppositely, the sensual, judgmental, and compositional experiences of users influence external environments. The dynamic interaction between environment and experience creates a point of balance that can then be utilized to offer real experiences to users through products and services. These products and services are then recognized as dominant designs in their respective markets.
environments of a specific age influence human experience. Oppositely, the sensual, judgmental, and compositional experiences of users influence external environments. The dynamic interaction between environment and experience creates a point of balance that can then be utilized to offer real experiences to users through products and services. These products and services are then recognized as dominant designs in their respective markets.
A principle is better when it can be simply applied. The simpler the principle, the wider its area of application. However, we need to discuss a few points before being able to generally apply the aforementioned principles to a wide range of products and services.
The experience of a current product or service is created through comparisons with past experiences of products or services. While it is important to consider the absolute degree of sense of presence, locus of causality and relational cohesiveness to provide the experience, comparing the degrees with a prior product or service may be more important. Therefore, no matter how high a sense of presence a product provides, it needs to be higher than its prior product for people to feel a high sense of presence.
Secondly, in an age where numerous products and services are launched everyday, it becomes unclear which products and services should be compared. The most common method would be to compare a new version of a product or service with its prior version.
For instance, it’s not difficult to compare the sense of presence, locus of causality, or relational cohesiveness between the experience of iOS 7 and iOS 8. But what about when we have to compare between two value systems? If a person uses a smartphone to kill time by surfing the web and watch webtoons (a Korean style webcomics), the subject of comparison in terms of relative sense of presence, locus of causality, and cohesiveness should be news apps, magazines, and games rather than the smartphone itself.
There are instances when the same type of environment can influence the characteristics of specific products and services. Let’s return to the example of the Hollywood sound film. A decrease in economic assets leads to lower consumption in general, and people are indifferent to a low degree of sensual immersion. However, the distinct characteristic of movies as a form of culture led to the preference of a high immersive experience. Although people were in a dire economic state, they sought to escape reality for a short period of time and delve into an ideal, imaginary world. This is how they wanted to relieve their stress from everyday life. Therefore, the relative comparison to a sound movie can be the settings and characters within that movie. For example, Roman Holliday, starring Audrey Hepburn, reveals a higher sense of sensual immersion through a sound movie than a silent movie, but nowhere as high as going to Rome for a date and sightseeing. But considering the context of the economic depression at the time, the film may have provided a higher sense of presence since it gave people an escape from reality (the reality in which they would never be able to afford to visit Rome) and helped them promote their imagination.
The Experiential Point of Balance
In order to successfully overcome the above constraints, a careful analysis needs to be conducted on the interaction between environment and experience of a product or service.
Firstly, deduce as many socio-cultural, economic, and technological elements that may directly or indirectly influence a product or service. However, keep in mind that elements will differ based on whether you look at a specific product or service, or a general market that includes many products or services.
Secondly, accurately measure the current levels of experiences that a product or service provides to users. What is the level of sense of presence that a product or service provides in terms of sensual experience? What is the locus of causality in terms of judgmental experience? What is the level of relational cohesiveness that the product or service provides? These questions will be able to provide answers for measuring the levels of experience. It would be more efficient to define the extreme points of each dimension and then place the product or service between the extreme points.
Thirdly, compare a product or service in order to infer people’s preferences. Do people want a higher, lower, or current level of sense of presence in terms of sensual experience? Do they want an internal, external, or current level of judgmental experience? Do they want stronger, weaker, or the same level of cohesiveness in terms of compositional experience?
Fourthly, analyze the effects of each environmental element on the three threads of experience. In the case of sensual experience, will the current environmental elements lead to a higher, lower, or similar level of sensual sense of presence? In terms of judgmental experience, will the current environmental elements lead to a more external, internal, or similar level of judgmental locus of causality? In the case of compositional experience, will the current environmental elements lead to a higher, lower, or similar level of relational cohesiveness?
Lastly, find a new point of balance for the product or service where people’s experiences and external environments meet.
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