Modern Product Design Goes "Flexible"
Abstract:Technological innovation continues to march forward in product design. Advances in technologies are enabling firms to move beyond merely adding more performance, and start offering other important conveniences. In new research by Professors Aydın Alptekinoglu and Karthik Ramachandran, the authors determine how the emerging phenomenon of flexible products are evolving in product design and changing the paradigm of product variety for firms and consumers. These products are increasingly common in health care, furniture, sporting goods, electronics and even sophisticated, high-end industrial products.
"In this paper we are studying integrated design for consumers with needs that vary over time," says Alptekinoglu. "Would you want a product having an integrated design, that is customizable for multiple purposes and offers reconfiguration flexibility, or would you want multiple products that serve the same set of multiple purposes? How will consumers make use of these flexible products, and under what conditionss will firms want to offer them? These are some of the questions we answer in our research.
A flexible product offers consumers the option of buying one product that can be used in several different configurations; essentially, flexible products provide variety post-purchase. Consumers can adjust some attributes of these products during use. Examples of products that are flexible by design include insulin pens with adjustable dosage, golf clubs with reconfigurable lofts, beds that allow changes in firmness and elevation, and trekking poles that can be reconfigured for uphill and downhill phases. Even advanced medical devices like pacemakers that can be re-tuned as a patient’s cardiac performance changes over time are considered flexible products.
According to the authors, products that deliver a high utility to consumers are ideal candidates for flexible designs as they encourage reconfiguration. This is why flexible products are typically sold at significant premiums over their ‘inflexible’ counterparts. For example, the Taylormade R11, an adjustable golf driver, is several times more expensive than average drivers, even though PGA rules restrict the frequency of reconfiguration to once-per-round.
Technology and aspirations
Advances in technology are helping pave the way for more integrated product design and capacities to manufacture them. Ramachandran says, "In a few industries, technology is making this type of flexibility more possible. Take diabetes pens. Insulin is the go-to drug for diabetes management. Prior to the introduction of these new products people had to use syringes, vials, and other inconveniences to monitor and manage their disease state. Now there are diabetes pens that offer flexible dosages and ease of use. These are prescribed even to patients who follow very strict dietary and exercise regimens, just in case their blood sugar levels change quickly."
Ramachandran notes another product category where offering flexibility is attractive to firms. "We are all, aspirationally, exercisers," he offers. "Think about a workout routine. You want to be able to vary your workout but not be required to purchase an entire home gym. Bowflex workout systems allow for a variety of workout routines; Nautilus makes an adjustable dumbbell that you can configure to different weights for variousexercises." Alptekinoglu suggests that a consumer's aspirations can even change within a product category. "Firms might consider that there can be multiple users of the same product too," he states.
“It's not new that people want to do different things with the products they purchase or acquire," says Ramachandran, "but it is new that these types of solutions exist. Firms are thinking about adding innovations to products to make them more utile and flexible."
Intuition suggests that product flexibility would be more valuable when consumer preferences are more dynamic and less predictable. The authors' state: "On the contrary, we find that a flexible product may lead to more profits than a portfolio of standard products when consumer preferences are more stable." Alptekinoglunotes that if customer preferences are more stable, when they change and move into a different state of preference, they persist with a product longer. "This is when flexible products are of high value, and flexibility is more valuable to the consumer," he offers.
This dilemma of whether to offer a customizable product or multiple standard ones has not been studied to any great extent. Uncertainty about future needs is a difficult problem to model. One could simplistically buy a lot of variety in a product category. This becomes impractical given space constraints in pantries, storage and living space.
Considerations for firms
According to the authors' analysis, the reduced durability that may accompany flexible products makes them even more attractive for the firm. A standard-product strategy presents choice to consumers before the point of purchase, including retail assortment, manufacturer product variety and customization. Alternatively, by enabling consumers to reconfigure their product as their preferences shift, the flexible-product strategy creates a realistic way to offer choice beyond the point of purchase.
Ramachandran illustrates one benefit but also a challenge in offering a flexible product — servicing it. " I am a poor golfer, " he says. " The direction my ball will travel is unpredictable, requiring different configurations of my club. People who are more uncertain of their needs will appreciate flexibility in a product." However, he notes that reconfiguring a product requires effort, understanding how to adjust it and work with a flexible product's features.
The paper "Flexible Products for Dynamic Preferences" by Professors Aydın Alptekinoglu and Karthik Ramachandran is under review. It can be downloaded from the Social Science Research Network (http://papers.ssrn.com/sol3/papers.cfm?abstract_id=2037631). The paper was recently presented at the 2012 Product and Service Innovation Conference held at the University of Utah.
Summarized and written by Jennifer Warren.