value creation by design: how design creates …...introduction in an era of disruption, innovation...

20th DMI: Academic Design Management Conference

Inflection Point: Design Research Meets Design Practice

Boston, USA, 22-29 July 2016

Value Creation by Design: How Design Creates Distinctive Value for Innovative products

In the principle of the Blue Ocean Strategy, value innovation is significant for business growth in intensive market competition. Design is mostly a missing opportunity for most businesses to create tangibly distinctive value for innovative products. Design is an applied, integrative, interdisciplinary process. This paper investigated how customers perceived value of innovative products by design in Thailand. It argued that the success of the innovative products tend to have higher customer-perceived value than the existing products in the same product category. The five successful innovative products were selected by the following criteria: good sale performance, good design recognition, comparative sales and no/little design-related problems. In the selected five products, there were three product categories: toys, seating furniture and sanitary ware. To understand the significant level of customer-perceived value by design that leads to the success of the innovative products, the comparative analysis was chosen, i.e. the comparison between the baseline analysis of the significant level of the customer-perceived value in the existing product category and the evaluation of the significant level of the selected innovative products. Nine core values were predefined, i.e. physical value, functional value, emotional value, user value, eco value, cultural value, social value and trend value. Each core value had its subelements. Three hundred random samples were asked to evaluate how significant of the subelements in each value that customers use to select the product categories, to prioritise the selected five values in order, and to choose approaches of their buying decision; one hundred random samples in each product category. Fifty random samples were asked to evaluate each innovative product by using the same set of the questionnaire, in total two hundred fifty random samples. During the research of the innovative products, the samples

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Leave BLANK for the submission on 26 April 2016 -- AUTHOR’S NAMEs [X Running head Even]

could look, touch and/or feel the real products, or watch the video presentation and the research assistant helped respond some enquiries. The result suggested that all core values of the successful innovative products tend to have the equal or higher significant level in comparison with the baseline customer-perceived value in the existing product category. According to the prioritisation result, two core values of the innovative products show the higher significant level in comparison with the baseline analysis, i.e. physical value and emotional value. The local customers tend to be inclusive and analytic, not structured and systemic when making buying decision.

Keywords: Design, Innovative Products, Customer Perceived Value, Value Creation

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Article’s title [X Running head odd]

Introduction In an era of disruption, innovation is imperative for the survival

and growth of all businesses in the world. Businesses are facing the following disruptive challenges, e.g. the personalised, digital technology, the growing society of ageing population in most of the developed countries, the political conflicts between left and right ideologies, the rise of new economic power of BRIC (Brazil, Russia, India and China) countries, the continuous development of physical and biological technologies in unprecedented pace, and ecological concern becoming one of the top global agendas. These challenges disrupt the existing systems of businesses, provided services, routine processes, and/or offering products.

In the production-based country like Thailand, these disruptive challenges have affected the local, manufacturing industries. Inevitably, innovations are at the heart of the local businesses, from strategic business direction to value proposition. The reasons behind the systemic innovations are not only these global disruptive challenges, but also the advents of regionalisation, i.e. the emergence of new economic CLMV (i.e. Cambodia, Laos, Myanmar and Vietnam) countries in the Southeast Asia region and the regional integration of ASEAN Economic Community (AEC) in 2015. Kotler et al (2007, 2) mentioned three motivations behind AEC: (1) ‘neighbouring countries polarised to work around the issues in a global framework in order to stay globalised’, (2) ‘smaller countries tend to have less bargaining power and room for concessions than the larger trading countries, resulting in huge trade-offs and lower benefits’ and (3) ‘the need to be independent, competitive and complementary in the light of new high-growth economies around the region’.

On the one hand, the emergent economic, neighbouring countries have caused cost competitive disadvantages for Thailand. Most of the foreign manufacturing businesses, which require cost-competitive, labour-intensive production have moved to the neighbouring CLMV countries. Some of the local manufacturing industries, e.g. apparel and garment industries have also relocated to these cost advantage countries. On the other hand, AEC strengthens a single economic community, market and production base within the region. It refocuses the regional capability to integrate with globalisation. Kotler et al (2007) described globalisation in this region that it is not about physical places in various parts of the world, but the integration with the global economy by attracting technologies and investments and using them to generate products and services at the most competitive prices

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while the local, regional, global customers get the highest value. Using local and regional resources, developing a strong collective network, understanding the needs of the regional customers, and creating uniquely quality services and products are the best way to enter the global market. Though the neighbouring countries are competing with Thailand’s labour-intensive manufacturing sectors, the local government embraces AEC opportunities to promote Thailand as a new branding position, a trusted country with skilled workforce, engineering expertise and industry friendly incentives, in advanced technological sectors, e.g. electronics, automotive and aircraft. This new position is to draw foreign capitals and technologies, not only to revitalise the local economy, but also to carry on the industrialisation, regionalisation and globalisation efforts.

Since the mid-2000s, Thailand has promoted a new economic position, termed Value Creation. The promotion of the economic value concept has shifted from ‘Value-added’ to ‘Value Creation’. The concept of the value-added economy, which has been recently faded out, is based on the ideology of industrialisation, the transformation of raw materials into products. Unfortunately, this transformation has mainly emphasised on production-related activities, i.e. cost reduction, quality control and efficiency improvement. The position of design is mostly at the lowest level of the functional level within the manufacturing industries. The new plan of the value creation economy is based on differentiation, innovation and value-driven development. The focal interest of the local businesses activities has been moved from labour-intensive, mass production to the high value-driven areas, e.g. research and development, technology applications, new knowledge generation, product development, innovation, design, brand and creativity. Design is becoming a new strategic role for value creation within the local industries and businesses.

This study argues that design is mostly a missing opportunity for most of the local businesses to create tangibly distinctive value for innovative products. The purpose of this study is to demonstrate how design can create distinctive value that customers can perceive.

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In the principle of Blue Ocean Strategy (Kim et al, 2005), value innovation is significant for business growth in intensive market competition. Value innovation is the key success in the blue ocean strategy principle, by the simultaneous pursuit of differentiation and conducive cost structure to create new market space. Blue Ocean Strategy offers a set of repeatable methodology and too in the pursuit of value-driven innovation. It includes the followings: Strategy Canvas, Value Curve, Four Actions Framework, Six Paths Framework, Buyer Experience Cycle, Buyer Utility Map and Blue Ocean Idea Index. The review of these methods and tools suggested that the key aspect of the blue ocean strategy is the identification of the distinctive value curve for customers in the untapped market. The distinctive value is a holistic created value, named ‘value curve’. To create a value curve of any blue ocean products/businesses, the principle of ERRC grid principle, in order to add the compelling value into products, there are the following guidelines: (1) Which of the factors that the industry takes for granted should be eliminated? (2) Which factors should be reduced well below the industry’s standard? (3) Which factors should be raised well above the industry’s standard? (4) Which factors should be created that the industry has never offered.

To identify the distinctive value or crated a new value curve for a commercially viable, innovative product in the industry, the blue ocean formulation principle process is suggested: (1) reconstructing market boundaries -to reconstruct market boundaries from head-to-head competition to untapped one, industry need to analyse six key aspects, named Six Path Framework, i.e. Industry Strategic Group, Buyer Group, Scope of Product/Service Offering, Functional-Emotional Orientation and Time. This helps identify convincing blue ocean opportunities; (2) focusing on the holistic picture -to visualise value curve, Strategy Canvas is used as a method and tool. The value curve is the distinctive value of a blue ocean product in comparison with other existing products in the same industry; (3) reaching new demands -three types of non-customers should be explored -soon-to-be customers, refusing customers and unexplored customers. First, the soon-to-be customers are persons on the edge of the market, waiting to jump in. Secondly, the refusing customers are persons consciously choose not to use or cannot afford to use the product. Thirdly, the unexplored customers are persons in the distant market; (4) get the strategic sequence right -the aim of this final stage is to ensure blue ocean ideas are commercial viability. There are four sequential steps to ensure that: Exceptional Buyer Utility, Accessible Price, Target Cost and Adoption Hurdles.

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The purpose of this study is to understand how design can help businesses to create distinctive value for innovative products.

Literature Review

Design as Value Creation in Thailand Design as value creation has been widely promoted through

Thailand Creative and Design Center (TCDC), Office of Knowledge Management and Development (OKMD), Office of the Prime Minister. ‘Value Creation’ is a new term for the local economy and society. Prior to this coined term, ‘Value-added’ was promoted. The reason behind the promotion of the value creation economy is the domestic economic forces. This may be called ‘in-between’ crisis in the global context. On the one hand, the local economy needs to compete with the emerging industrial and neighbouring countries, providing lower cost production capacities, e.g. China and Vietnam. On the other hand, it needs to compete with the developed countries, providing good design, high quality products and trusted brands, e.g. UK, Japan and USA.

It is argued that the local economy could not sustainably survive by the concept of the value-added economy, identified as easy-to-be-replicated economy. For example, the production-based and cost-cutting economy, focusing on labour-intensive workforce and production technology is easy-to-be-replicated by and easy-to-be-transferred to other countries. It is certain according to the regional and global economic trends that the country economy could not be flourished and sustained its competitiveness by the production-centred activities. The Thailand’s prosperity and well-being could not be only based on cost-added value, but rather unique-created value. The unique-created value is termed as value creation. As a result, the difference between both terms is clearly distinguished.

The concept of the value creation economy thrives on the social and cultural assets of the country. The value creation economy is driven by the combination of social knowledge, skilled workforce, technology development and unique cultural properties, which is hard-to-be-replicated and hard-to-be-transferred. TCDC has identified the concept of value creation as, Director of Design and Creative Business Development mentioned, the knowledge capability enhancement of social skill, technology and cultural uniqueness properties to create cost-added and unique-created values. It promotes the value creation of design and creativity for the general public and industries through the following knowledge development

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Article’s title [X Running head odd]schemes, e.g. design and creativity-related resources centres, well-recognised domestic and international design exhibitions, annual Creativities Unfold (CU) symposium and design and creativity-related initiatives for young creators, entrepreneurs and SMEs. The demonstration on how to employ design for the benefits of businesses, economy and society has been continuously emphasised. It is suggested that TCDC is more successful in promoting the mixture between creativity, design, material and technology with the tacit knowledge of local and international artists, artisans and masters to create value (Menkhoff et al, 2011).

The promotion of design as value creation is part of a national social and economic agenda on the flourish of the creative economy for the benefits of the nation. The study of the creative economy in the UK by John Howkins (2001) has a big influence on this agenda. Design as a key to value creation has been continuously promoted through several public-sector organisations. For example, Office of Product Value Development, Department of International Trade and Promotion, Ministry of Commerce has initiated design supportive schemes for businesses, such as Design-Business Matching and Design Seminars. National Electronics and Computer Technology Center (NECTEC) and National Metal and Materials Technology Center (MTEC), National Science and Technology Development Agency, Ministry of Science and Technology have promoted design at research and development and design implementation levels, such as material, engineering and technology, and design prototyping, testing and simulation. National Innovation Agency (NIA) has initiated funding schemes for design as innovative solutions.

The Role of Design in Thailand The role of design within manufacturing industries and local

businesses in Thailand has not been well established, especially industrial or product design. The effort of design deployment for product design was initiated by Ministry of Commerce at the end of the 1990s. Design was promoted as value-added for product exports. This initiative has been focusing on design promotion for exporters rather than non-exporters. Domestic and international design masters have been invited to share their knowledge and experience in design to develop desirable products for targeted buyers. The promotion of design has been done through design-related workshops, activities, seminars and initiatives, such as Design-Business Matching –how to promote young design talents by matching with local businesses to design and develop products; Thai Talents –how to train local design entrepreneurs to develop their products and businesses for exports; and DEmark –awarded good design mark

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Leave BLANK for the submission on 26 April 2016 -- AUTHOR’S NAMEs [X Running head Even]for the local product and graphic-related design. Designers play a key role in design and development of new products, especially for the lifestyle-related industry. At the mid of the 2000s, the role of design has been widely spread to technology-oriented products, such as consumer electronics. This attempts to employ designers who could provide conceptual and stylistic products to please targeted users. However, the employment rate of professional designers to work within domestic manufacturing industries is still very low.

The position of design is rather low recognition within the organisational structure. In most of the production-based industries, design is positioned under the production-based activities. The role of design is not the main role in its positioned function, but rather be a supportive role to production process because most of the domestic manufacturing industries are contract manufacturers. Most designers help to develop design concept before its production implementation. This position of design is prominent in the contract manufacturers providing only production services, or providing production and design services. In most of the manufacturing-owned brands, especially in the lifestyle-oriented industries such as apparel industry, the position of design has been promoted. Design is part of the sales and marketing function. The purpose of design is to create products to satisfy targeted customers. Designers work on design research, concept, development and details. Design is operated under the sales and marketing framework. Some industries do not employ in-house designers because they understand that the manufacturing culture could not cultivate design. They commission external designers to work on their required projects. There are a few cases, especially in furniture industry. Design has its own authority as a design department. In short, the role of design has not been fully utilised as value creation in the manufacturing industries in Thailand.

The study argued that value creation is a significant part for the local business shift, survival and growth. Without any distinctive values customers can perceive, it is very difficult that the businesses can survive in high intensive market conditions. Design is a strategic means to create multi-faceted, distinctive values.

Research Methodology To demonstrate that design can create multi-faceted, distinctive

values that customers can ostensibly perceive for local businesses and industries in Thailand. The study selected successful innovative products driven by design, entitled innovative design, from the

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Article’s title [X Running head odd]locally, well-recognised, design-oriented brands at the national and international levels. Their design achievements have been widely mentioned in their own industries, nationally recognised as business successors by innovative design and/or received numerous design and business awards. Their innovative designs focus on ‘create’ factor, i.e. design uniqueness, differentiation and/or superiority, not just pleasurable design appearance. The design-led innovation in the local businesses is flourishing in the mature industries, such as toys, furniture and sanitary ware. To select innovative designs from these industries, the study compared the selected innovative designs with the existing competitive and/or substitute designs in the same period to ensure the selection that fits with the concept of the innovative design in this study as shown in Figure 1:

Figure1: An example of the comparison between a selected innovative design with other competitive types, from the left image, Tower Pounding and the rest are its competitors.

! ! Image Sources: Plan Toys, Wooden Toy, Wonderworld, Selecta, Deco (from

left to right)

The following selection criteria of the successful innovative designs are: (1) Good sales performance - innovative designs have recognised good sales, the best design seller and/or always continual sales. The success has been identified by business owner or design design director. (2) Good design recognition -innovative designs should get honourable recognition by good design mark and/or award, such as DeMark (Good Design Mark in Thailand), G-Mark (Good Design Mark in Japan), iF and Red Dot. (3) Comparative sales performance - innovative designs should have better sales performance since the first launch in comparison with other products in the same product category in the company. (4) No/little design-related problems -innovative designs have no/little deign-related problems, identified by business owner of design and/or customer’s feedback.

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Based on these four criteria, the successful innovative designs need to fulfil at least three in four criteria. The study interviewed business owner and/or design director of the pre-selected innovative designs to understand these four criteria before finalising the selection. The purpose of the interview is not only to complete the selection criteria to identify the success of innovative designs in business, but also to understand the integration of design in the product and/or business development process, such as management support, design creation process, design team and design values

Five innovative designs were selected. The names of the selected innovative designs are: Dancing Alligator, Tower Pounding, Lini Bench, Elle Chair and Together. Their images are shown in Figure 2. The results of the company interview based on four criteria are shown in Table 1.

Figure 2: Five selected innovative designs

Image Sources: Dancing Alligator (Plan Toys), Tower Pounding (Plan Toys), Lini Bench (Osisu), Elle Chair (Yothaka), Together (Bathroom Design) (from left to right)

To understand distinctive value created by design, the study focused mainly on value in utility, not value in exchange. According to Heskett (2008) in the paper, Creating Economic Value by Design, the determinant of value in exchange in the rational economic model is based on price. He argued that the price-related value ignores the concept of quality or differentiation and the role of design is absent conspicuously. Therefore, the study omitted perception of price value in this research because of the role of design is hardly identified. According to Kim and Mauborgne (2005) in the book, Blue Ocean Strategy, the success of blue ocean business/product/service need to provide the exceptional value of buyer utility and many companies failed because they obsessed with science and technology novelty and forgot to deliver exceptional value of buyer experience. The study supports the Kim and Mauborgne’s argument and proposes that the exceptional value of

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Article’s title [X Running head odd]innovative designs cannot be achieved without the understandings of the intrinsic value of buyer experience.

Table 1 Summary of the five selected innovative designs

The review of the literature in the areas of design, innovation, management and design management and the well-established experience of the author in employing design as strategic business lead to the suggestion of pre-identified nine values that design can create for the local businesses, i.e. physical value, functional value, emotional value, user value, eco value, cultural value, social value and trend value. Each value had its value details as shown in Table 2.

Design Names

Good Sales Performance

Good Design Recognition

Comparative Sales Performance

No/Little Design Problems

Dancing Alligator, Plan Toys

Good Record Good Toy Award, UK; Spiel Gut, Germany and Oppenheim Best Toy

Always sales None

Tower Pounding, Plan Toys

Good Record G-Mark, Japan

Always sales None

Lini Bench, Osisu

Good Record n.a. Always sales None

Elle Chair, Yothaka

Good Record n.a. Always sales None

Together Good Record iF, Germany

Well n.a.

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Leave BLANK for the submission on 26 April 2016 -- AUTHOR’S NAMEs [X Running head Even]Table 2 Summary of subelements in the pre-defined nine values

Created Design Value

Value Description

Value details Sources

Physical Value Design Perception

Aesthetics, Good Quality, Appropriate to the Context of Use, Enabling, Durability, Differentiation, Uniqueness, Innovativeness

e.g. Cagan et al, 2002

Functional Value

Design Benefits

Comfort, Safety, Ease of Use, Multi-functions, Convenience (Effortlessness)

e.g. Cagan et al, 2002

Emotional Value

User’s Emotion Adventure, Independence, Security, Sensuality, Confidence, Power, Fun, Affection, Memorability, Taste

e.g. Cagan et al, 2002; Kim et al, 2005

Eco Value Environmental Advantages

Energy Saving, Rethinking Ideas, Biodegradable, Green Energy, CO2 Reduction

e.g. Kim et al, 2005; McDonough et al, 2002

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The total of 250 random samples filled out the questionnaire and contributed to the research outcome. Fifty random samples evaluated each innovative design. One sample could answer only an innovative design. The study was conducted in the Bangkok areas. During the research, samples could look, touch and/or fell real innovative design or watch its video presentation. The innovative design descriptions and details were prepared for assistant researchers to answer any enquiries related to the evaluated innovative designs

User Value Self and Social Perception

Expense Saving, Time Saving, Convenience, Efficiency, Role Fulfilling, Self-Fulfilment, Social Image, Group Belongingness

e.g. Boztepe, 2007

Cultural Value Geographical Identification Value (Thai Culture)

Thainess, Thai Knowledge, Thai Tradition

e.g. Popovic et al, 2010

Social Value Social Responsibility

No Child Labour, Human Rights, Made-in-Thailand, Social Wellbeing, Fair Trade

e.g. Whiteley, 2003; Cooper, 2005, Davey et al, 2005

Brand Value Brand Essence Brand Image, Brand Identity, Brand Promise and Brand Personality

e.g. Aaker et al, 2000; Knapp, 2008

Trend Value Consumer Behaviour Forces

Trendy, In-Trend Internationally, In-Trend Nationally

e.g. Sparke, 1986; Higham, 2009

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The questionnaire was divided into two sections: (1) personal data and (2) value perception evaluation. In the section of the value perception evaluation, there were three tasks: (2.1) the perceptual assessment of the value details in the pre-defined nine values in four scales- no value (1 score), less value (2 score), average value (3 score) and high value (4 score), (2.2) the prioritisation of the pre-defined nine values in five orders, (2.3) the identification of purchasing decision approach. Descriptive statistics are used to describe the summary of this research. The values analysis of the answer in the section 2.1 was identified into six significant level: 3.5 - 4.0 = the most significant level, 3.0 - 3.49 = the highly significant level, 2.5 - 2.99 = the average significant level, 2.0 - 2.49 = the less significant level, 1.5 - 1.99 = the least significant level and 1 - 1.49 = not significant at all.

To demonstrate the distinctive value created by design, the baseline analysis of three product categories, i.e. toy, furniture and sanitary ware. Three hundred random samples filled out the same set of the questionnaire. One hundred samples answered each product category. One sample could answer only one product category. This study was conducted in the Bangkok areas. Samples were asked to evaluate the significant level of the pre-defined nine values of each product product category. The overall results of the baseline analysis was compared with the value perception evaluation of the successful innovative designs. The purpose of the comparative analysis between both results demonstrates how design can create distinctive values.

Results The analysis results are divided into two parts. The first part

introduces the brief summary of the design practice within four companies, i.e. Bathroom Design, Plan Toys, Osisu and Yothaka that created the five selected innovative designs. The second part describes the comparative analysis results of the value perception assessment of the innovative designs and the baseline analysis.

Regarding the analysis of the first part, four companies have different approaches on their innovative designs. Bathroom Design envisions its design to be a top five of the brand leaders in the bathroom industry on the global market. It implements design-led innovation policy, the integration of design, technology, function and new material. Plan Toys, Osisu and Yothaka have adopted design as a key business strategy. Four companies have different approaches in design creation process. Bathroom Design and Plan Toys have

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Article’s title [X Running head odd]implemented multidisciplinary design approach in the creation process. Osisu and Yothaka have implemented the designer-led creation. This means designers are the leading role in the creation process. In all companies, design approval is done by business owner and Top Management team.

The design success stories of Plan Toys and Yothaka are based on their business and design process experience. Plan Toys pointed out the key issues of individual/team potential, ideas and working process. Yothaka focuses on a variety of product design choices, customer’s feedback & orders and pay attentions to commercial and design details. Bathroom Design has implemented four practices to identify their success: brand principle fit, key performance indicators, innovative solution approval and innovation decision. Finally, Osisu mentioned that the success of design at the product design level, i.e good proportion, aesthetics, material type and function.

The results of the second part are divided into two sections: the sample details analysis of the innovative designs and the baseline analysis, and the comparative analysis between the value perception assessment of the innovative design and the baseline design analysis.

Regarding the sample details analysis of the innovative designs, the details of the 250 samples are shown in Table 3 -7. The male sample is about 44 percent. The majority of the age range was 26 - 40 years old, around 88 percent. The majority of the samples were married. The educational level of the samples was graduated at the bachelor level, around 81 percent. The majority of the samples earned in the 25,000 - 35,000 Baht per month.

Regarding the sample details analysis of the baseline analysis of three product categories, the details of the 300 samples are shown in Table 8-12. The number of female samples are higher than the number of the male samples about 1.8 times. The majority of the age range of the samples is 26-50 years old, 89 percent. The majority of the samples were married, 60 percent. The educational level of the samples was graduated at the bachelor degree, 68 percent. The majority of the samples earned in the range of 15,000 - 25,000 Baht/Month.

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Table 3 Summary of gender of the total samples

Remark: N = 250. T1=Dancing Alligator, T2=Tower Pounding, F1=Lini Bench, F2=Elle Chair, S1= Together

Table 4 Summary of age range of the total samples

Table 5 Summary of status of the total samples

Gender Total Percent T1 T2 F1 F2 S1

Male 108 43.2 18 19 24 17 30

Female 142 56.8 32 31 26 33 20

Age Total Percent T1 T2 F1 F2 S1

< 25 1 0.4 0 0 1 0 0

26-30 86 34.4 17 23 23 19 4

31-35 74 29.6 14 15 19 15 11

36-40 59 23.6 16 8 4 15 16

41-50 22 8.8 0 3 1 1 17

> 50 8 3.2 3 1 2 0 2

Status Total Percent T1 T2 F1 F2 S1

Single 96 38.4 15 19 28 25 9

Married 154 61.6 35 31 22 25 41

Others 0 0 0 0 0 0 0

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Article’s title [X Running head odd]Table 6 Summary of educational background of the total samples

Table 7 Summary of income per month of the total samples

Table 8 Summary of gender of the total samples

Education Total Percent T1 T2 F1 F2 S1

High School 7 2.8 2 2 1 0 2

Vocational 4 1.6 1 0 1 2 0

Bachelor 202 80.8 38 41 45 40 38

Master 37 14.8 9 7 3 8 10

PhD 0 0 0 0 0 0 0

Others 0 0 0 0 0 0 0

Income (Baht) Total Percent T1 T2 F1 F2 S1

< 15K 6 2.4 0 0 5 1 0

15K - 25K 74 29.6 20 27 10 14 3

25K - 35K 100 40 17 15 28 25 15

35K - 45K 38 15.2 11 5 4 6 12

45K - 55K 11 4.4 1 2 2 0 6

> 55K 21 8.4 1 1 1 4 14

Gender Total Percent T F S

Male 108 36 18 50 40

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Remark: N = 300. T=Toy, F=Furniture, S=Sanitary Ware

Table 9 Summary of age range of the total samples

Table 10 Summary of status of the total samples

Table 11 Summary of educational background of the total samples

Female 192 64 82 50 60

Age Total Percent T F S

< 25 18 6 0 9 9

26-30 79 26.33 1 37 41

31-35 54 18 11 25 18

36-40 67 22.33 30 21 16

41-50 67 22.33 49 8 10

> 50 15 5 9 0 6

Status Total Percent T F S

Single 116 38.67 1 58 57

Married 180 60 97 42 41

Others 4 1.33 2 0 2

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Table 12 Summary of income per month of the total samples

According to the perceptual assessment of the value details in the pre-defined nine values in comparison with the baseline analysis, the comparative analysis results of the nine value perception are shown in Figure 3-11. The study suggested that the overall perception assessment of the nine pre-defined values of the innovative designs is better than the baseline analysis, shown in Figure 12.

Education Total Percent T F S

High School 25 8.33 8 12 5

Vocational 16 5.33 8 6 2

Bachelor 204 68 68 61 75

Master 51 17 15 19 17

PhD 1 0.33 0 0 1

Others 3 1 1 2 0

Income (Baht) Total Percent T F S

< 15K 73 24.33 15 36 22

15K - 25K 94 31.33 23 29 42

25K - 35K 43 14.33 10 18 15

35K - 45K 26 8.67 14 7 5

45K - 55K 13 4.33 9 1 3

> 55K 53 17.67 29 9 15

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Figure 3: Summary of the value details perception assessment of the physical value in comparison with the baseline analysis

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11.52

2.53

3.54

Aesthetics

Good Q

uality

Appropirate to the Context

Enabling

Durability

Differentiation

Uniqueness

Innovativeness

T1 T2 F1 F2 S1 Baseline

Article’s title [X Running head odd]Figure 4: Summary of the value details perception assessment of the functional value in comparison with the baseline analysis

Figure 5: Summary of the value details perception assessment of the emotional value in comparison with the baseline analysis

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11.52

2.53

3.54

Comfort Safety Ease of Use Multi-Functions Convenience


11.52

2.53

3.54

Adventure

Independence

Security

Sensuality

Confidence

Power

Fun

Affection

Mem

orability

Taste



Figure 6: Summary of the value details perception assessment of the brand value in comparison with the baseline analysis

Figure 7: Summary of the value details perception assessment of the cultural value in comparison with the baseline analysis

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11.52

2.53

3.54

Image Identity Promise Personality


11.52

2.53

3.54

Thainess Thai Knowledge Thai Tradition



Figure 8: Summary of the value details perception assessment of the social value in comparison with the baseline analysis

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11.52

2.53

3.54

No C

hild Labour

Hum

an Rights

Made in Thailand

Social Well-being

Fair Trade

T1 T2 F1 F2 S1 Average


Figure 9: Summary of the value details perception assessment of the user value

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11.52

2.53

3.54

Expense Saving

Time Saving

Convenience

Efficiency

Role Fulfilling

Self-Fulfillment

Social Image

Group Belongingness

Good Fortune


Article’s title [X Running head odd]Figure 10: Summary of the value details perception assessment of the environmental value in comparison with the baseline analysis

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11.52

2.53

3.54

Energy Saving

Rethinking Ideas

Biodegradable

Green Energy

Co2 R

eduction



Figure 11: Summary of the value details perception assessment of the trend value in comparison with the baseline analysis

Figure 12: Summary of the value perception assessment of the innovative designs in the pre-defined nine values in comparison with the baseline analysis

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11.52

2.53

3.54

Trendy In-trend internationally In-trend Nationally


11.52

2.53

3.54

Physical

Functional

Emotional

User

Eco

Cultural

Social

Brand

Trend



Regarding the comparative analysis of the value details in each pre-defined value of the innovative design and the baseline product category, three value details are distinctively created by design, i.e. differentiation, uniqueness and innovativeness.

Design helps customers to perceive all details of the cultural and environmental values better than the typical product. The value details in the emotional value, i.e. adventure, independence, fun and affection can be perceived by design. The functional, brand, user and trend values are not an outstanding result.

In the overall picture, customers perceived the pre-defined eight values better than the typical product. The functional value is more or less similar to the existing product in average, as shown in Figure 13.

Regarding the prioritisation of all pre-defined values, four perceived values are dominant by customers, i.e. physical, emotional, functional and user values, as shown in Figure 14. The purchasing decision of the innovative designs and the baseline analysis is importantly based on the factor, considering overall related factors, as shown in Figure 15.

Figure 13: Summary of the value perception assessment of the innovative designs in the pre-defined nine values in comparison with the baseline analysis

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22.5

33.5

4

Physical

Functional

Emotional

User

Eco

Cultural

Social

Brand

Trend

Innovative Design Baseline


Figure 14: Summary of the prioritisation of the pre-defined nine values in comparison with the baseline analysis

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00.51

1.52

2.53

3.54

Physical

Functional

Emotional

User

Eco

Cultural

Social

Brand

Trend



Figure 15: Summary of purchasing decision approach in comparison with the baseline analysis

Remark: Figure 15, A= Prioritising from top to toe, B=Focusing on significant factors in details, C=Thinking of other competitive designs in parallel, D=Assessing the relations of various factors, E=Considering overall related factors, F=Comparing all details thoroughly, G=Fitting with all sequential criteria, H=others

Conclusion The study demonstrates that in overall average customers could

perceive the predefined eight values of the successful innovative designs better than the typical baseline product. The value prioritisation of this comparative analysis shows that four values are similarly significant, i.e. functional, physical, user and emotional values. This may suggested that the local customers are function-oriented. They have given the first priority to the functional value. he local customers tend to be inclusive and analytic, not structured and systemic when making buying decision.

The result of this research suggests the significant role of design in the creation of customer’s perceived values in comparison with the typical products. This leads to a strong recommendation for the

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Purchasing Decision Approach

A B C D E F G H


Leave BLANK for the submission on 26 April 2016 -- AUTHOR’S NAMEs [X Running head Even]Thailand’s businesses that design can create buyer experience values beyond the level of physical design styling. As mentioned earlier, it is crucial for any local businesses to employ design in the business and/or product development process and encourage them to employ design as a strategic means to create distinctive customer perception values. Design is a genesis of business success by creating exceptional value for customer experience. Without the perception of any distinctive values for customers, businesses tend to fail in high competitive market.

To sum up, this comparative study demonstrates the customer’s perceived value by design. When design is deployed in the Thai businesses, this may convince local businesses to make change and go beyond the general understanding of design as styling. It argues that design is not a supportive role, but a strategic means to create distinctive values that customers can perceive. Design deserves a top priority in the Thailand’s national policy for the social and economic development and its recognition as value creation, not just in the areas of science and technology and the result of economic value for businesses as suggested by many previous studies in many countries, but also other distinctive values for future changes.

Acknowledgements: I would like to express gratitude to Thailand Research Fund (TRF) and The Office of the Higher Education Commission which supported the TRF-CHE Research grant (MRG 5180195) for New Scholar for this research.

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