Value Transference: Leveraging Design and Intellectual Property

James Conley wrote an interesting article for core77 about on the rather pedantic topic: the ipod. But he takes an interesting angle on describing the product's success that I had never heard before. He attributes the success of the ipod to value transference:

"Value transference, in a nutshell, is the premeditated use of multiple intellectual property regimes at specific points across the product lifecycle, in order to realize sustainable differentiation. This is typically achieved by using patents early in the lifecycle to secure functional differentiations - such as new combinations of storage or battery technology (utility patents), and/or unique ornamental attributes (design patents). But while the focus of the functional differentiation remains unique at or near the launch of a new product, it is not sustainable. While a company has this advantage, however, they'll want to build an association between patented aspects of the offering, and a non-functional cognitive touch point of the user experience. The critical design elements central to the cognitive touch point (shape, color, sound) are then secured with a registered trademark. To complete the strategy, carefully orchestrated advertising builds the association in the mind of the target consumer. (Recall that trademarks can last indefinitely if used properly, and hence sustain the competitive advantage.) When done correctly, value transference helps to mitigate the enormous cost reduction pressures inherent in markets with short product life cycles such as electronics."

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