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Stuttgart is “going green.” The German city recently signed a letter of intent with Ultra Motor to implement an infrastructure to support eco-friendly scooter-bikes. Launch is expected in 10 months and the idea is catching on; according to BusinessWeek, Ultra Motor is currently in negotiations with 12 other major European cities.

Driving this effort is Ultra Motor’s new A2B Light Electric Vehicle (LEV) — a scooter-bike with a conscience. The tagline even has an anthropomorphic ring to it: “The heart of a bicycle. The soul of a scooter.”

Experience LEV technology: Hop on a comfortable seat surrounded by a lightweight, aluminum frame. Enjoy as much exercise as you choose by pedaling or cruising at 20 mph. Want to ride further? The standard range of 20 miles can be extended to 40 with the addition of a lithium ion battery pack. New technology provides one-third more force than electric motors; helpful when ascending hills or darting through traffic. A dashboard indicator signals energy remaining. Dwindling charge? Simply plug in.

Current customers of the A2B vehicle include commuters, students, employers, fleets, and local authorities. However, through our lenses, jobs define the marketing strategy and are linked to attributes:

Social job: “Have a positive impact on the environment”
The A2B is a zero emissions mode of transportation, powered by a lithium ion battery. The vehicle efficiently functions at approximately one-tenth the running cost of a gas-powered scooter.

Emotional job: “Allow me to enjoy my commute”
The rider is able to enjoy the outdoors and a quiet ride. The extended driving range provides freedom and the vehicle is easier to handle than a gas-powered scooter. Modular storage options are also available.

Functional job: “Provide a way for me to reduce transportation costs”
Savings are self-evident — no gas required. The A2B model is currently available in 20 states across the U.S. for about $2,200. In Stuttgart, a monthly subscription will cost $23; a mass transit pass costs $84.

In the spirit of business model innovation, Ultra Motor is exploring new networks of transportation, one of which will be utilized in Stuttgart. The “LEV City Initiative” outlines this potentially disruptive system featuring charging stations; purchase a subscription, locate a station, swipe your card and enjoy the ride.

We applaud Ultra Motor for encouraging consumers to “go green” in new ways. Learn more from the source at www.ultramotor.com. You’ll notice as the website loads, the screen cleverly notes: “Charging up.”

A brewing discussion about Starbucks’ new coffee flavor highlights a challenge facing innovation-seeking incumbents: Which customers should we listen to?

As part of a broader effort to reinvigorate the company, Starbucks recently rolled out a mild-tasting coffee called “Pike Place Roast.” It has quietly moved away from offering bolder-tasting coffees, such as its Sumatra brand, particularly in the afternoon.

Starbucks brought Pike Place Roast to market in response to complaints from Consumer Reports and others that its coffee tasted bitter or burnt. A small group commercialized the brew in six months—an astonishingly short period of time in the food industry.

While Consumer Reports and the mass-market has cheered, a vocal group of core Starbucks loyalists panned the coffee—one reviewer on a Starbucks Web site designed to solicit customer feedback called it a “fundamental, grievous error”—as watered-down and away from what makes Starbucks distinct.

Incumbents seeking to create new growth often face a version of this dilemma. Should we listen to our best, most loyal customers, or should we turn our ears towards customers we’re not serving well, or even to customers we are not serving at all?

Read the rest on Scott's Harvard Business blog, Innovation Insights.

Something strange happened at the gym last week. I was in the locker room recovering from a workout and a strong, familiar scent filled the room. No, it wasn’t the usual gym locker room smell. It was sweet and fruity and, for some reason, it made me feel young.

I wasn’t the only person to notice the smell. Like prairie dogs, women popped their heads up looking for the source. After a few seconds of searching, we found it: Two bright pink bottles of Salon Selectives shampoo and conditioner.

“Salon Selectives! I haven’t seen that in years!” 

“I thought they stopped making that!”

“I used to love the smell of that!”

The chatter started almost instantly and every comment was positive. Women talked about the smell, the bottles, and the fact that no girls’ toiletry kit in the late 1980s was complete without those green-apple scented pink bottles.

It’s not often that shampoo evokes such excitement, which may indicate that Salon Selectives has tapped into something overlooked by many products: It is is meeting either an unmet or under-satisfied job-to-be-done. But with hundreds, maybe even thousands, of hair care products on the market, what job could possibly be left undone?

The answer probably lies in the first reactions of the women in the locker room: Remember simple pleasures and happy moments.

Hair care products today address every possible functional job-to-be-done: Give volume to thin hair, decrease frizziness in curly hair, preserve color in dyed hair…the list goes on and on. Brands position themselves to address many of our social jobs (those jobs related to how others perceive us) by showing us celebrities and models with stunningly beautiful and healthy hair, with the implicit promise that, with proper shampoo choice, our lives will be equally fabulous. But very few hair products or brands address our emotional jobs (those solely focused on the user).

The importance of marrying emotional jobs with social and functional jobs is something we often stress with clients and something that River West Brands (owners of Salon Selectives) and similar firms tap into when they buy the brand equity (and little else) of a dead or dying business. These companies use the power of our memories and the associations we make with a brand to meet our emotional jobs-to-be-done. Then they can update it to meet the functional jobs-to-be-done of today’s consumers. Finally, through the positioning and marketing of the brand, the company can address our social jobs, delivering the trifecta that often leads to brand success.

Combining memories with products and brands that meet important functional, social and emotional jobs-to-be-done can be extremely powerful. Perhaps, if that prairie-dog reaction to the Salon Selectives bottles in the gym is any indication, powerful enough to bring a dead brand back to life. 

Believe it or not, gardening is the number one outdoor activity, ahead of both walking and golf. There are several barriers locking the average consumer out of gardening as a hobby – it is time consuming and can be overwhelming for the newcomer who doesn’t know an annual from a perennial. So how did an activity with so many potential barriers to consumption become so popular?

A primary driver of the increase of the popularity of gardening is the advent of innovative packaging and products that break down these "barriers to consumption" by making it simpler and more fun to spend time in the yard. Scott’s MiracleGrow Liquafeed is a great example of such a product; it is a hose-and-bottle system that automatically combines water and plant food (see picture).It is not a better version of plant food, but it is a packaging innovation. It makes it simple and idiot-proof for the novice gardener to easily feed and water their outdoor plants. My bet is this product is mainly enjoyed by people who previously wouldn’t use fertilizers or even spend much time doing yard work. This is described nicely in this quote from Scott’s Miracle-Grow's CEO, Jim Hagedorn: "Our biggest competitor is people's time. We have to make it easy and fun for people to work in the garden."

A little bit of research turned up what I had suspected to be true. Liquafeed was the most successful new product launch in the history of Scott’s. It increased sales in the fertilizer category by 11 percent. First-year sales were $50 million, making it the most successful new product launch for the company ever (while projected sales were $20 million). The key to the innovation is the packaging, which was developed in partnership with Calmar, a MeadWestvaco company.

The key thing to remember here is that innovation requires looking beyond improving a product along the traditional dimensions of performance (in the case of plant food these might be things like increase in chlorophyll production or improved heat and cold tolerance) and using other innovation levers to break down the barriers locking out potential consumers from using your product!

As mentioned, this morning I did the "Q" part of a 75-minute Q&A session with P&G CEO A.G. Lafley. The discussion was wide-ranging, covering everything from the need to re-think marketing and advertising to the benefits of a liberal arts education. At the end of the session, I told the audience that my six takeaways were:

1. In an age of disruption, growth is getting increasingly difficult.
2. Companies need to take the long view. Lafley said he finds it hard to watch CNBC for more than 7 minutes because the focus is so short-term.
3. The customer needs to be the center of the innovation equation. When Lafley took over as CEO in 2000, he said he saw too many managers on their cellphones, or buried in spreadsheets, in essence "showing customers their behind."
4. Experimentation is key. Lafley talked about the value of giving customers even crude prototypes to test an idea. He also described how different parts of his organization approach innovation differently, and that's a good thing.
5. Complex organizations need to simplify to successfully innovate. Lafley said he seeks Sesame Street simplicity.
6. The CEO has to be the "Chief External Officer" to manage external pressure and the "Chief Innovation Officer" to push the innovation agenda forward.

Read the rest at Scott's Harvard Management blog, Innovation Insights.

The ongoing "greening" of the corporate world is a wonderful thing. As our industrial titans shift towards sustainability our environmental footprint decreases, consumption of finite resources becomes more rational, and we all get exposed to fewer toxins and chemicals.

The move towards sustainability also provides an instructive live case study of market evolution and innovation; as "green quickly becomes an essential performance characteristic in all sorts of products and businesses, companies are scrambling to innovate in order to take advantage and differentiate themselves from their traditional competitors, or if someone else has already done so, hop on before getting left in the dust.

The underlying phenomenon driving the emerging importance of sustainability is growing consumer awareness of the problems posed by unsustainable practices and products. This renders sustainability increasingly valuable to more people in more contexts (and, it should be noted, environmental regulations like fuel efficiency standards and carbon taxes cement such perceptions in law, forcing the economic calculus to account for externalities the market might otherwise ignore).

Taking a step back, all products and services can be thought of as aggregates of performance attributes I like coffee, for example, that is hot, strong, fresh, affordable, fairly traded, and sustainably harvested. When any performance characteristic becomes increasingly valuable others necessarily become relatively less valuable, be they price (e.g., people are willing to swallow the premium for organic food), convenience (theyll go to the one Whole Foods in town rather than the market down the street), reliability (they ditch the brand theyve trusted for ages in exchange for a new green product from a company theyve never heard of), or even quality (theyll settle for scratchy but 100% post-consumer recycled tissues). Understanding the impact of the increasing importance of sustainability in any given context is critical to projecting the nature and extent of the "green revolution and the best ways to innovate in response.

Disruptive innovation often takes place in these sorts of situations, when the dimensions of performance shift, when, for a variety of reasons, the market reassesses the value of specific characteristics in a product set. Those that figure out how to deliver the right set of performance characteristics succeed, while those that fail to do things differently just fail.

Consider consumer products giant Cloroxs recent behavior: last fall they purchased leading natural products company Burts Bees for $925 million, then perhaps more interestingly in this context, earlier this year they unveiled Green Works, a new set of eco-friendly and Sierra Club-endorsed products touted as "the first line of natural cleaners developed by a major consumer products company.

Clorox recognized that the market landscape had shifted, that more and more consumers were valuing green product attributes, and they adapted accordingly. That recognition enabled it to apply its corporate muscle and know-how to the challenge. It can reach into its pockets and swoop up an emerging competitor Burts Bees but it can also marshal its scientists to create compelling green chemical formulas for new products, its sourcing and manufacturing capabilities to harness economies of scale and bring down prices, its channel relationships to place sustainable products in Wal-Marts and supermarkets everywhere, and its market researchers and marketers to understand and reach mainstream consumers.

In short, Clorox can deliver products that meet the sustainable performance threshold (they are all natural, biodegradable, recyclable, not tested on animals, and so on) but that also adequately satisfy more traditional performance metrics like efficacy, affordability, reliability, and accessibility. As long as it understands the true market need and tailors its business model and product set accordingly, Clorox has the chance to outpace many of the startups and pure plays that make up the green products market today.

So what are the lessons for big companies looking to navigate market shifts such as the emerging importance of sustainability? Early adopters are the canaries in the coal mine watch them closely in order to understand the new dimensions of performance they prize and the tradeoffs they are willing to make. A close reading of their evolving performance tradeoff profiles will clue you into the nature and extent of underlying shifts in the relative valuation of distinct performance attributes. Then, look at the thresholds for mainstream consumers how acutely do they feel the shifts that are motivating early adopters? What are the barriers that stand in their way today from consuming in the same way as the evangelists? You just might find that big company resources and capabilities, applied intelligently, can innovate around those barriers by, say, getting affordable and effective all-natural and sustainable cleaning products into Wal-Mart.

Airborne, the company that introduced the public to herbal health formulas that claim to boost your immune system, entered the childrens market with the recent acquisition and launch of "Squid Soap by Airborne. Squid Soap contains a small amount of dye that forces children to wash their hands for 20 seconds, satisfying parents "Job to be Done of teaching their children proper hygiene habits.

The original Airborne product has a very clear job with a purpose-brand: it keeps people healthy from airborne germs. The brand is often associated with travelers and the product was promoted with give-aways on airplanes. Now Airborne seeks to take its purpose brand and endorse a soap product aimed at children instead of travelers. As Airborne was created by a teacher, a wiser strategic move may have been to name the corporate parent with a different name like HealthyYou that could be used to endorse multiple product lines for travelers, children, elderly and other groups that could be targeted with multiple germ-killing products.

See SquidSoap's website for more information.

Wiive talked about the disruptive gaming system from Nintendo before, both on the blog and in S&I (May-June 2007 and May-June 2006). I thought Id just post a few links that show both how successful Nintendo has been to date and how it continues to expand its horizons for the future.



Recent reports at VG Chartz show that the Wii is close to overtaking the Xbox 360 for most units sold amongst the newest generation of consoles. That means that Nintendo has sold nearly as many units in 9 months as Microsoft has in 21. Sony lags behind, a distance third. They have a nice comparison graph here.

Any Wii owner can tell you that it isnt uncommon to work up a light sweat playing Wii Tennis or Boxing, a fact that hasnt gone unnoticed at Nintendo. Last month at the E3 Media and Business Summit, Nintendo announced plans to further expand the fitness jobs addressable by the Wii via a new accessory and game (if you can call it that) called Wii Fit. Judging by the cool demo video it seems pretty spiffy. Look for homes (retirement and otherwise) to continue buying Wii consoles as fast as Nintendo can make them.

We're told to drink 8 glasses (64 ounces!) of water a day. It is a tall order for most of us. Why is it so hard to drink all that water? Lets consider the jobs to be done relevant to water consumption; the things consumers are really trying to do when they drink or consider drinking water. Its pretty easy to brainstorm some:

"Get me hydrated
"Quench my thirst
"Lighten my load at the grocery store" (before I got a car and I walked to the grocery store with a backpack this was a very important job for me!)
"Make sure I'm getting fresh, clean water (no icky bacteria or contaminants that are bad for me)"
"Keep my calorie consumption low"

To get these jobs done people resort to compensating behaviors. They add flavor to their water by squeezing in lemon or steeping in slices of cucumber or berries. They purchase flavor packets that stir into water such as Kool Aid and Crystal Light that are small, easy to carry home and easy to store on the shelf. They purchase bottled water and refill the bottles at a water fountain.

Procter & Gamble has recently launched an extension to their PUR water filtration brand that targets these Jobs. The Flavor Options SKU lets consumers insert a flavor cartridge into a redesigned PUR pitcher or the faucet-mounted version. Users press a button when they want to add a flavor and can vary the level of concentration of flavor they want. The PUR Flavor Options package comes in Raspberry, Strawberry and Peach and contain no calories, no artificial colors or flavors. They use sweeteners like Splenda. It seems like it is a great alternative that would delight many consumers, providing a relatively inexpensive and healthy way to encourage more water and less soda for adults and children.

The pitcher sells for between $25 and $29 and you'll have to pay about $10 for two flavor packs. According to the package, each glass costs as little as 7 cents (vs. $1+ for bottled water or soda). The business model is nothing new to P&G a device plus a consumable (the blade and razor model). However, this does represent a different way to sell beverages and is disruptive to the bottled beverage industry by making it simpler and more convenient to get a tasty beverage.

Even if this particular application of the technology is not a blockbuster hit, think of all the things that could be done using this technology. This delivery mechanism could be used to add caffeine, vitamins or medicine to water. As always, we would love to hear your thoughts. Im definitely intrigued by the concept. Now if only I could taste it before I invest in the system and cartridge....

We wrote in December about the trend of dermatologists adding cosmetic procedures to their services as part of the larger trend of medical procedures moving from specialized to general practitioners. Continuing the trend even further, cosmetics companies are hard at work disrupting the dermatologists by launching products nipping (and tucking) away at some of the simpler medical procedures.

According to the American Academy of Plastic Surgeons, minimally invasive procedures like Botox, laser skin resurfacing and injectable soft tissue fillers are the largest and fastest growing area of cosmetic medicine. From 2000 to 2005, these procedures grew 53% to just under $8.5 million compared to a 5% slight decline in actual surgeries to under 1.8M.

Its not surprise then that one of the fastest growing of the minimally invasive procedures, lip augmentation, is squarely in the sights of the cosmetics industry.
Medical grade injectable fillers like Restylane cost between $500 and $1000 per injections and work for around six months before they are absorbed by the body. Beauty companies like DuWop and FusionBeauty, have launched "good enough topical varieties aimed at non-consumers that work for around six to 48 hours and cost less than $50. The topical products work in a variety of ways. Some, like DuWops aptly named Lip Venom, coat the lips with a mild irritant which reddens the skin and promotes blood flow to the area a little like the sting you get eating a hot pepper. More sophisticated formulations claim to affect collagen or hyaluronic acid, a compounds produced naturally by the body that keep lips and skin full and which decrease with age. (Both compounds are staples of doctor-performed injectable procedures.) One of the most popular products, LipFusion, which hit the market in 2005, claims to use hyaluronic acid and dehydrated "marine collagen microspheres which are absorbed by the lips and attract moisture. Yes, you are plumping your pucker with fish goo.

The sales figures for these projects are similarly fat. At beauty retailer Sephora, sales of plumping lip glosses rose from $1.7M in 2003 when DuWop hit the market to over $34M in 2005. During a Sephora holiday gift show on the Home Shopping Network in 2006, LipFusion products sold out in less than five minutes.

After

Posted by Alex Leichtman in Consumer Products | Comments (1)