I think some product development and innovation ideas go beyond the customers’ wants and likes. Some market leaders have the capacity to shape up the needs and turn ‘latent population’ into ‘customer’. It true that “outsourcing the Industrial Design segment of the product development process” will benefit the parent firm by using large and deep experience of the design firm, but still main role stays with the innovativeness of the parent firm. These firms are expected to have intimate relations with customers through their sales and marketing organizations, still important through their service network. A nerve and muscle system built around his organization will enable the firm to real-time monitor the performance of the product and response of the customer for deficiencies and expectations.
I think this is also important for the consultancy firms to tailor the product to the needs of the customers.
On the other hand, reaction of the customers to frequent change will change by industry segment. Customer may like fanciful changes on IT products but may be a bit skeptical and conservative for changes in construction machinery due to cost and investment nature of the product. Prototyping and testing is costly and time-consuming. Use of electronics and computers in construction machinery worries the users due to delicacy of these equipment and sensitivity of equipment to external influences (contamination, shocks etc). Servicing becomes costly as well. The manufacturer needs to stay innovative sieged by all these constraints. This also requires accumulation of many faceted information in the hands of the parent firm to consider customers’ attitudes towards change. This creates new challenge on the shoulders of design consultancy firms.