Appliance Design - May 2008 - (Page 5)

EDIToRIAL ® www.applianceDESIGN.com publishing staff Fern Sheinman Publisher Richard J. Babyak Editor Larry Adams Managing Editor Daryl Delano Economics Editor Amy Alef Production Manager MaTT Britcher Art Director (858) 259-4585 sheinmanf@bnpmedia.com (440) 886-1210 babyakr@bnpmedia.com (773) 467-8590 adamsl@bnpmedia.com (508) 746-7986 dhdelano@comcast.net (248) 244-6409 alefa@bnpmedia.com (734) 354-1874 britcherm@bnpmedia.com circulation Christine A. Baloga (248) 244-8262 Corporate Audience Development Director balogac@bnpmedia.com Amy Schuler (920) 231-4932 Group Audience schulera@bnpmedia.com Development Manager Alison Illes (248) 244-1730 Corporate Fulfillment Manager Illesa@bnpmedia.com Catherine M. Ronan (248) 244-8259 Corporate Audience ronanc@bnpmedia.com Audit Manager Robert Liska 800-223-2194 List Manager robert.liska@edithroman.com marketing Amanda Podina Marketing Director Paul Dykstra Trade Show Coordinator (248) 244-8257 podinaa@bnpmedia.com (248) 786-1609 dykstrap@bnpmedia.com editorial advisory board Mark Skaer, Senior Editor, The News Susan Sutton, Editor, Ceramic Industry Roy Sakelson, Editor-in-Chief, Circuitree Tom Williams, Publisher/Editor, Quality Magazine Darlene Brezinski, Ph.D., Editor, Paint and Coatings Industry Don Hegland, Editor, Assembly BNP Media Helps People Succeed in Business with Superior Information BNP Media 2401 West Big Beaver Rd., Suite 700, Troy, MI 48084, (248) 362-3700, Fax: (248) 362-0317; www.bnpmedia.com For subscription information or service, please contact Customer Service at: call (847) 763-9534 • Fax: (847) 763-9538 or email: AD@halldata.com APPLIANCE DESIGN (ISSN 1552-5937) is published 12 times annually, monthly, by BNP Media, 2401 W. Big Beaver Rd., Suite 700, Troy, MI 48084-3333. Telephone: (248) 362-3700, Fax: (248) 362-0317. No charge for subscriptions to qualified individuals. Annual rate for subscriptions to nonqualified individuals in the U.S.A.: $128.00 USD. Annual rate for subscriptions to nonqualified individuals in Canada: $159.00 USD (includes GST & postage); all other countries: $172.00 (airmail) payable in U.S. funds. Periodicals Postage Paid at Troy, MI and at additional mailing offices. POSTMASTER: Send address changes to: APPLIANCE DESIGN, P.O. Box 2148, Skokie, IL 60076. Printed in the U.S.A. Copyright 2008, by BNP Media. GST account: 131263923. Change of address: Send old address label along with new address to APPLIANCE DESIGN, P.O. Box 2148, Skokie, IL 60076. All rights reserved. The contents of this publication may not be reproduced in whole or in part without the consent of the publisher. The publisher is not responsible for product claims and representations. For single copies or back issues, contact Ann Kalb at (248) 244-6499 or KalbA@bnpmedia.com. Canada Post: Publications Mail Agreement #40612608. Send returns (Canada) to Bleuchip International, P.O. Box 25542, London, ON, N6C 6B2. he word itself should have been the tipoff: subprime. That observation poses the obvious questions. Would you knowingly entrust yourself to a subprime surgeon? Would you knowingly fly on a subprime airplane? Yet, in spite of the clear warning label, the allegedly shrewd investment community bought into subprime mortgages in a huge way, subsequently igniting the nation’s current economic crisis. Isn’t this the same professional class of people presuming to advise us on how to plan our retirements? Maybe we should be getting our advice from Madame Zsofia , the fortune teller, at least she charges less. The larger questions are clear. How long does the economic downturn last? How deep does it go before hitting bottom? And then there’s the big daddy question that hounds anyone in trend analysis and affects any company making consumer products. Is this a temporary phenomenon, or does it portend a long-term shift in consumer behavior? In the case of the former, the optimal strategy is to just hold on tight, batten down the hatches, and wait until the storm passes. Responding to the latter case may require a change in the way a company goes to market by altering its product mix or even product designs. If consumers revert to a more frugal spending pattern for an indefinite time period, it spells more than just a decline in unit shipments. It may result in scaled-down, purchasing decisions, such as buying the smaller unit or the one with fewer features. For manufacturers, that means selling fewer high-margin products. That’s not a small matter in an age when profit margins are being squeezed at both ends: the big retail chains pushing on price at one end; skyrocketing materials costs pushing at the other. A shift in the types of products being sold can have large consequences on profitability and product development strategies. Take major appliances, for example. Two decades ago, appliances had similar features and appearances, and companies went to market in similar fashion, with products slotted into established tiers of good, better, best, and priced accordingly. Much has T Crystal Ball as Design Tool changed since those simpler times. The 90s brought the introduction of professional style, stainless-steel appliances; the rollout of electronic controls, which permitted programmable features and advanced sensing; the first high-speed cooking appliances; the arrival of sophisticated, front-loading clothes washers; more stylish, distinctive designs; and much more. Consumers showed an eagerness to buy these innovative appliances and a willingness to pay the higher price to have them, fueling a surge in the development and sales of upscale, high-end products. Some industry observers saw the traditional three-tier market realigning into a two-tier market, with consumers in the middle moving to either the low or high end, and with more opportunities for growth and profits in the latter. Consumer belt-tightening has already forced a pause in that trend. But if the belt-tightening becomes prolonged enough to turn the pause into a reversal, then what? There’s more at stake than merely a dip in wine cooler sales. Such a reversal would create a huge challenge. Manufacturers can’t retreat from the high technology consumers have come to expect, so their product designers would have to figure out how to provide it at lower cost while faced with soaring costs for components and materials. The immediate dilemma, however, is determining whether a fundamental market transition is coming. Economists are fond of reminding us that recessions are defined in retrospect. They don’t confirm we’ve had one until it’s over. Paradigm shifts tend to work the same way. You don’t know for sure you need one until you’re past the optimal time for making it. None of this is comforting to the product platform planners who must think years ahead. Perhaps it’s time to add Madame Zsofia to the planning team. < Richard Babyak, Editor E-mail: babyakr@bnpmedia.com | HVAC | Majors | Water Processing | Housewares | Commercial Appliances | | Vending | Medical | Lab | Test & Measurement | Lawn & Garden | Electronics | | Computers | Communications | Business Equipment | applianceDESIGN May 2008 5 www.applianceDESIGN.com http://www.appliancedesign.com http://www.bnpmedia.com http://www.bnpmedia.com http://www.appliancedesign.com

Table of Contents Feed for the Digital Edition of Appliance Design - May 2008

Appliance Design - May 2008 Contents Editorial Shipments/Forecasts News Watch New and Notable Displays & Indicators Elastomers Quality & Standards Indoor Air Quality IHHS Highlights New Products Classifieds Design Marts Advertiser’s Index Association Report: PSMA

Appliance Design - May 2008

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