No. 22: Three Functions of a Product

Management:

Aston Martin, a long-established automaker in Great Britain, has launched a compact car named Cygnet. This car is basically the same as Toyota’s IQ. To differentiate its car from Toyota’s IQ, Aston Martin used a lot of expensive pure hide in the interior. Toyota’s IQ is priced at 20,000 dollars, while Aston Martin’s Cygnet has a price tag of 50,000 dollars. Aston Martin is very famous for expensive cars. Actually, it is a beloved car of James Bond who can enjoy a gorgeous life with limitless money that comes from tax. The latest Aston Martin DB5 is as expensive as 280,000 dollars.

That is, Aston Martin markets its gorgeous compact car with British flavor for the price of two times higher than the Japanese original. The price difference seems to be too big for the two cars sharing the same performance and component. At the same time, it is necessary to note that the incentive is very important for salespeople of car dealers. A big difference in car price automatically means a big difference in incentive. Even if salespeople get a higher percentage on incentive for a Cygnet than for a DB5, the difference in real income remains great.

A product has three functions. They are (1) basic function, (2) supplementary function, and (3) emotional function. The basic function is what a company has to guarantee with the product. In the case of car, it is made up of such factors as running performance, fuel mileage, quietness, and solidness and durability of the body. The supplementary function is the function to upgrade the product. In the case of Aston Martin’s Cygnet, it is the leather interior that makes it more attractive and gorgeous. The emotional function is the image that the product appeals to the customers. It is James Bond in the case of Anton Martin.

In today’s marketing, it is growing more important to keep the balance between the three functions. People watch the real value of a product closely. They examine the balance of the three functions unknowingly. In this sense, it is not too much to emphasize the importance of the basic function that is the biggest factor of the three. In the case of Aston Martin’s Cygnet, the basic function is smaller than the remaining two functions combined. It should be noted that 20,000 dollars for the basic function and 30,000 dollars for the remaining two functions. It seems that many people are reluctant to pay 30,000 dollars for the two functions.

What is more important is that a company has to keep innovating and upgrading a product constantly. No one-time-only product succeeds in the market. Nearly 30 years ago, Rover of Great Britain used the same strategy as Aston Martin. Rover’s Sterling was basically the same as Honda’s Acura. Rover advertised its Sterling extensively, saying “Great Britain can make a car comparable to Honda’s Acura.” It is true that the Sterling was a very good car with fancy styling. However, Rove was not able to introduce a car that succeeded the Sterling, and the Sterling was wiped out from the market. 

The emotional function mentioned above can be divided into (1) external image, (2) internal image, and (3) environmental image. The external image excites the senses, and it is created by such factors as color, design, and naming. The internal image can be said essential image of a company, and it is created by such factors as safety and durability that a company has built throughout its history. The environmental image reflects a company attitude toward ecology. This image has been growing more important lately. This is epitomized by the disaster in the Fukushima nuclear power plant.