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| LG Electronics ― Design Factory |
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Unique Design Management Hits Off With Consumers
By Kim Yoo-chul
Staff Reporter
Electronics companies have their own philosophy about designs, a key factor that formulates their brand image among consumers.
The importance of designs can't be overstated because the consumers often buy products for their designs as well as functions featured in the products.
Research firms have confirmed this. Strategy Analytics (SA) says that consumers prefer products that are hip in design, while GetJar says that 70 percent of U.S. consumers consider design together with its functions as top priorities when they buy products.
Design Management
LG's target- and consumer-focused design strategies have paid off due to the company's steady investment in design-management since 2006.
Just after the company's current chief executive Nam Yong took the helm two years ago, LG Electronics ― which embraces handsets and flat-screen TV businesses as its main cash-cows ― has been transforming into a marketing- and design-driven consumer player.
"Annual allocation on budgets in design-related fields has continuously been increasing to strengthen our brand image," Jung Woo-sik, an LG spokesman said, Tuesday.
"We are somewhat behind in terms of market share in the highly competitive consumer electronics market. But our target-focused design strategy is helping us boost the company's handsets and flat-screen TV shares in the key North American and European markets," Jung added.
Based on the impressive results of its Chocolate phones, LG has paired up with such prominent, high-end labels as Prada and BMW to capitalize on the intersection between its respective customer bases.
By turning phones into fashion accessories akin to handbags and even sunglasses, each industry is likely to boost its brand equity and set new design trends, according to a study by market research firm ABI Research.
LG, from the third quarter of last year has been the world's third-biggest producer of handsets after Nokia and Samsung Electronics. Its design- and function-focused high-end phones have strongly helped the company overtake collapsing Motorola.
LG has boosted more than 10 billion won in each of the past years in design. Meanwhile, the company has some 800 design staff members as of late last year, up from 600 in 2006, according to the company.
"Many companies have designers, but they don't have design management," said an LG handset designer who asked only to be identified by her family name, Yoo, said.
"Design needs to be managed, and there must be someone in the 'company hierarchy' who has the knowledge to manage design and set up the design language," according to the official.
In a virtual move to accelerate the design-management pitches, LG will open a new research & development (R&D) center in March on a tract of 125,000 square meters in Seoul's trendy district of Seocho-dong.
The new building, which is the largest of LG's R& D institutes, will house some 3,000 R&D and design-related employees.
"Design and technology shouldn't be separated. LG has another springboard to introduce design- and function-focused products earlier by saving time and increasing efficiency," Hahm Young-ho, chief of the company's design center and in chare of mobile phones, said.
"Designers identify issues with existing products, and then think of solutions to solve these problems before designing a new product. If you are designing a camera, think about what is lacking in the cameras today. Think of what the new feature can offer everyone or certain target groups, try to solve their problems and consult with technicians right away," according to Hahm.
London Center Goes Well
LG Electronics, the key flagship unit of South Korea's third-biggest conglomerate of LG Group, introduced the industrial design concept in 1958, a first in the industry.
It later set up an in-house design research institute in 1983, setting a landmark in local design management.
A year later, LG named a designer as the head of the design institute and gave him total responsibility regarding the institute's all design decisions.
In 2008, LG established its new European design center in London with head of design Luke Miles in charge.
The ambitious recruitment of Miles, who has worked at Nokia and Atlantic, shows LG Electronics takes design seriously and is eager to expand the breadth of LG's brand portfolios.
"The London team is involved with the entire product portfolio, and a new product from the studio is expected 'to be on the market over the next year'," according to Miles.
"Our aim is to understand clearly what makes European consumers tick, and we collaborate with the Seoul and European headquarters office to translate that into products for the European market," he added.
The design-savvy and collaborated design-management have been recognized highly from recent product launches, which demonstrates LG's approach of balancing a human side of a product with well-engineered content.
The brand is collaborating with sound guru Mark Levinson to tune its home entertainment sound systems, underlining the idea of `good value but premium quality'.
The 3G "Touch Watch Mobile", which was presented at the recently finished Consumer Electronics Show (CES) in Las Vegas earlier this year, is a taste of things to come and, with its portability and style, a good example of LG's insight-led approach.
"It's hit the mark in terms of how people can and want to interact with their device," Miles said.
According to him, it's one of those products which opens up new chances and it's great that a huge brand like LG has developed something to that level.
Referring to the importance of interactive and experiential aspects, Miles said the company's "BD370" Blu-ray player is a combination of YouTube's streaming and BD Live Technology to connect and interact online.
Cultural Shift
Jung Kyung-won, a professor of Korea Advanced Institute of Science and Technology (KAIST)'s industry design department, said design roles as a specialist just like R&D and marketing, making companies take cultural shifts.
"There's a saying, 'Design or Resign.' Amid digital convergence, design-management is not just for designers but also for companies' management side," Jung added.
Similarly, LG's design-management has been in line with the ongoing cultural shift pushed by its CEO, Nam Yong.
With an initial thought that innovative thinking from the corporate structure to culture is a pre-condition for a better global image, Nam hired foreign executives as the company strongly needed more trendsetters if it was to go one step further in the Digital Age.
To keep pace with global design trends, the importance of design was promoted across the company, and the electronics manufacturer designated design put top priority on related investment activities.
"Our foreign executives have been called to standardize the processes and systems that LG has developed around the world. Meanwhile, they will take some time to break into the top tier of global brands in terms of design and quality," another LG spokesman said.
"Still, LG needs to boost corporate image in global markets and I know watchers recognize such moves not as natural but essential. For a better design-management and corporate shake-up, Nam is surely putting more focus on product design," said another LG official.
yckim@koreatimes.co.kr
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