Strategic Trade-Offs in Vehicle Design Affect Market Share

A new study of the interplay among function, form and ergonomics reveals an important strategic design trade-off for automotive manufacturers: Investments in both function and ergonomics result in higher market share, whereas investments in both function and form impose a share penalty.

Car companies can either “design for satisfaction” by investing in function and ergonomics or “design for delight” by investing in form, says Raj Echambadi, professor of business administration at the University of Illinois and co-author of the new research.

Raj Echambadi, professor of business administration at the University of Illinois. Image credit: University of Illinois College of Business.

Raj Echambadi, professor of business administration at the University of Illinois. Image credit: University of Illinois College of Business.

The research also finds that older vehicles with higher levels of form design hold their market-share value better than older vehicles with higher levels of functional or ergonomic design. The reason? According to Echambadi, form is conspicuous and universal, while functionality and ergonomics are intrinsically personal.

Form broadly equates with a vehicle’s “cool factor”: the aesthetics of a Corvette, for example, or the unique teardrop shape of a Harley Davidson’s gas tank. Function and ergonomics are about performance and comfort: how well the product performs, how smooth the ride is and how the product-user interface looks and feels to the driver.

Because older vehicles with higher form design hold their market share better than older vehicles with higher functional or ergonomic designs, “firms that focus on functionality and ergonomics need to introduce next-generation products more frequently than firms focused on form, who can afford to wait longer,” says Echambadi.

On the other hand, the manufacturer of a vehicle with superior form design may receive a market-share penalty by also taking functional or ergonomic elements to the extreme, since such a product could be considered “overdesigned” by consumers.

“Amping up the styling and performance is a risk, and what happens is you end up overshooting the market with a costly product, thereby targeting a narrower segment of the market,” Echambadi says.