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Article Excerpt
Attaching high value to outward appearance is pervasive in Korean society. New words such as Ullzzang (good looking faces) and Momzzang (hot bodies) are being coined continuously, and the societal trend toward beauty and appearance is growing. Why are people so fanatic about appearances? One answer is because appearances create a person's first impressions. Another reason is that attractive features exert undeniable power in everyday life. Some studies show that people with attractive looks tend to have a better chance of securing employment, receiving higher salaries, finding life partners, and receiving assistance from other people (1,2).
Applying the prevalent "appearance-is-supreme" attitude to product development, the proliferation of design-oriented new product development (NPD) is a case in point. Management consultant/author Tom Peters has written that one must be able to grasp the attention of consumers in 0.6 second in order to sell a product. Just as appearance determines one person's first impression of another, design functions as the first contact point between company and consumer. Consequently, as the only means of product communication, the importance of design in successful product development cannot be overstated (3-7). Moreover, it is predicted that design will play an even greater role in the future product-development activities of companies (8-11).
Strong market competition demands more creativity and innovation in business strategies. To enhance creativity and innovative thinking in companies, some research claims that the design department should play a leading role in product development (12, 13). Especially in the case of user-driven products such as mobile phones and MP3 players, where user-centered product features are stressed over technology and user needs are diversifying, design now exerts great influence over the entire NPD process (14).
Many firms, such as Apple, Philips, Bang & Olufsen, and Allesi, are consistently striving to gain competitive advantages through design-oriented NPD (15). Apple, for example, was able to break out of its business slump and recover its reputation by offering consumers paradigm-breaking new products through innovative designs. Apple introduced the innovatively designed iPod, featuring single colors and a round click wheel, in the highly competitive MP3 player market, which had previously evolved around diverse functions and sound enhancements. With the success of iPod, Apple's sales increased more than threefold from $5.7 billion in 2002 to $19.3 billion in 2006.
With the role of design becoming more important in the new-product development process, active research on subjects such as the correlation between investment in design and a company's financial gains (4,16), the role of design (8), and the role of management in design-oriented NPD (15) has become essential. However, the studies just cited have limits, as they do not identify the dynamic evolutionary process and key success factors of design-oriented NPD.
The objective of this paper is to identify the dynamic evolutionary process and key success factors of design-oriented NPD from the case of LG Electronics' (LGE) Chocolate Phone. Launched at the end of 2005, Chocolate Phone has been a great success in the market and is a typical example of design-oriented NPD strategy in Korea (see "Outcomes of Design-Oriented NPD," page 00). Our findings should be useful to R&D leaders, product designers and other business practitioners in developing their new products and gaining a competitive edge in the market.
Research Methodology
Our research method is interpretive and case-based, employing a single and longitudinal case study (17,18). We gathered information from four major data sources: First, we interviewed top management and professionals who joined the Chocolate Phone project. Each interview took about three hours and was recorded so it could be analyzed in detail. Second, LGE provided internal materials such as meeting documents, which were produced in the R&D process, and market research materials, which were designed for formulating phone concepts. We used these materials as a secondary source in order to better understand detail and meaning, which cannot be obtained from interviews. Third, as a preliminary analysis, we used a lot of information regarding Chocolate Phone from public sources such as newspapers, magazines and the Internet. These sources helped us analyze Chocolate Phone from an outside perspective. Finally, we sent Chocolate Phone developers a draft of our report and received feedback about information that should be added or corrected.
Chocolate Phone Background
In the second half of 2004, Cyon brand of LGE's Mobile Communication Division was suffering from such poor financial performance and brand image that LGE management and employees were being pressured to come up with a product that would turn the tide. To this end, the company's Mobile Research Center launched a superslim-phone development project called the S Project in an effort to develop the smallest and slimmest cellular phone that would fit into a person's hand.
As the S Project progressed behind lab doors, the interest of the mobile phone market turned to slim mobile phones; Motorola was first to market its RAZR phone and seized the slim-phone market. Now it became critical for LGE to develop an innovative phone that would not only meet customer needs but also be different from its competitors' products. Consequently, LGE expanded the scope of the S Project into the Chocolate Phone Development Project.
Beginning in the latter half of 2004, the Chocolate Phone Development Project involved 90 developers, designers and marketers and took approximately one year until the introduction of the final product. In the first nine months, the design and development organizations played a central role in coming up with a design concept and developing an external look and functional capacity that fit the concept. In the final three months, the design, sales and marketing teams cooperated to fix a marketing concept for the phone and devise the most effective way to reach consumers.
Four Phases of Development
Figure 1 shows the four phases of the Chocolate Phone development process: product concept creation, design, development, and marketing.
1. Product concept phase: a product that makes you want to buy it just by looking at it.
At the outset, the Chocolate Phone development project team focused on discovering consumer needs. During this process, it was learned that consumers see mobile phones not as mere "devices" but as "part of their...
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