March 8, 2010

43) Dr John’s Spinbrush

spinbrush logo

wēi  danger

John Osher is a serial entrepreneur.  After successfully selling his Spin Pop invention, a lollipop with a battery-operated handle that twirled in the eater’s mouth, he wondered where else he might apply the technology.  He hit on the idea of developing an affordable electric toothbrush. To succeed, the product had to cost only a few dollars more than a conventional toothbrush and had to have a long-lasting battery, to meet this target Osher set about designing up from 80 cents (while everybody else was trying to design down from $79). The finished design, the Spinbrush, was highly popular in early trials.  However, with no marketing budget and a product that was so different to anything else on the market would consumers actually give the product a go?

jī opportunity

In the book Diffusion of Innovations (1962), Everett Rogers defines several intrinsic characteristics of innovations that influence an individual’s decision to adopt or reject.

1)    relative advantage – how improved an innovation is over the alternatives (including any previous generations)

2)    compatibility – how easily the innovation is assimilated into an individual’s life

3)    complexity – how easy it is to use

4)    trialability – how easily an innovation may be experimented with as it is being adopted

5)    observability – how visible the innovation is to others

Osher’s experience had taught him that a great product alone wouldn’t guarantee adoption, he understood that trialability and observability were important too.  Accordingly, he launched the SpinBrush at $4.99 – $5.99 in 1999 with a patented “Try Me” feature that allowed consumers to turn the brush on in-store, stimulating fast in-store trial.  This low cost approach maximised ‘observability’, ‘trialability’ and demonstrated the low ‘complexity’ in the product thereby reducing the need for consumer advertising.  The strategy worked and within its first year SpinBrush accounted for 10% of toothbrush sales in the US.  Osher’s company was sold to P&G two years later for $475m and by 2002 the SpinBrush was the best-selling electric toothbrush in the US.  With P&G’s marketing and distribution muscle the product’s annual sales grew to more than $200 million in less than twenty-four months.

how about…

  • Designing for all of Rogers’ characteristics when launching new products and services – relative advantage, compatibility, complexity, trialability and observability ?

February 9, 2010

36) Lego

lego_logo1

wēi  danger

Lego, still a privately held Danish company, has been producing the plastic bricks that made it famous since 1949. The company name Lego was coined by the founder, Ole Kirk Christiansen from the Danish phrase leg godt, which means ‘play well’.  And the company is certainly helping many play well, with its colourful bricks sold in over 130 countries.  Everyone on earth has, on average, 52 Lego bricks.  However, at the end of the 1990’s the company was in sharp decline – computer games were eroding traditional toy sales, its range targeting girls had bombed and its theme parks were unprofitable.  On the face of it, Lego was likely to fade away.

jī opportunity

Lego’s leaders had different ideas.  They began their firm’s reinvention by talking to toy retailers who told them clearly not to mess with Lego’s brand or its core products.  Accordingly, the company’s staff were tasked with introducing new products targeted at its core customer, boys of 5 to 9 years and were given a performance-based pay scheme to align incentives.  This approach yielded a stream of highly successful new ranges, including movie sets, e.g. Star Wars and Harry Potter, Lego Factory and Mindstorms products.  Mindstorms Lego sets are robotic, fully programmable and can even be controlled with mobile phones, clearly positioning Lego as a complement to computer games.  Lego Factory enables users to design, share and purchase their own kits – the downloadable software makes it simple to create virtual 3-D models which are then automatically priced.  With more than 30,000 kits uploaded so far there is a burgeoning community of Lego fanatics sharing their creations.  Through these new ranges, Lego capitalized on emerging trends and ensured that it remains relevant to another generation of kids.  This has been reflected in its financial performance, even as the overall toy market declines Lego’s revenues and profits are climbing, up 19% and 30% respectively in 2008.

how about…

  • Beginning any process of change by clearly understanding your customers’ perceptions of your challenge?
  • Harnessing potential disruptions to make your offer more relevant, partnering where necessary?
  • Empowering your fanatical customers to develop your offer with, or even for you?

February 4, 2010

35) La-Z-Boy

la-z-boy_logo

wēi  danger

In 1929, cousins Edward M. Knabusch and Edwin J. Shoemaker set out to design the most comfortable chair possible. Their completed design, including an innovative reclining mechanism, received great feedback but needed a name. Combining promotion with necessity, the partners held a contest. Entries included such names as Sit-N-Snooze, Slack-Back and Comfort Carrier, but one in particular, La-Z-Boy, stood out.  The future looked bright but the cousins were in for a shock when, a few months later the stock market crashed and America entered the Great Depression.  Surely this disastrous economic climate would kill their fledgling business?

jī opportunity

The cousins saw the situation differently and understood that it might offer the perfect opportunity to build their brand.  They did everything they could to help consumers use and buy their products.  This included extending better terms, improving service and amazingly accepting barter (including farm animals). The partners did not aggressively discount, probably aware that any price reductions would be tough to reverse once the economic conditions had improved.  The company grew rapidly and exited the Great Depression in the 40’s with a truly loved brand.  The company has continued to thrive and now employs 11,000 people.

How About…

  • Harnessing difficult times to form a greater connection with your customers?
  • Having those same customers create your brand?
  • Being creative with pricing to avoid the trap of basic discounting where possible?