Observing Needs

Scott Cook is a big fan of observational studies when it comes to consumer behavior. He argues that you can't necessarily go off of what a consumer says in a survey, you have to follow that person home and see exactly how they use your product and what they need from your product (not what they say they need)

When he visited our MBA group earlier this month, he gave the example of Raid bug spray. Raid initially designed their product in a way that even a small amount would kill bugs quickly. But upon doing observational studies, they discovered that a majority of their consumers were spraying way more juice than was necessary to kill the critter. In essence, not only did consumers want to kill the bugs, they wanted the satisfaction of seeing them writhe around and drown in poison. The consumers' psychological need outweighed their functional need.

With this information, Raid decided to dilute their formula, saving the company 15% on cost of materials. With the new formula, the bugs would not die so quickly, and the psychological needs of the consumer could better be met. Within a short period of time, sales increased by 50%.

The Wallet of the Future

I always have these three things in my pockets. This is a problem to me. The time has come for a new device that merges the functions of a set of keys, a cell phone, and a wallet. I want to have one item in my pocket that does everything.

This device will look and work like a phone, but will also have the following features:

- A computer chip inside that can be securely programed to allow you to start your car, open your garage door, and unlock your house
- Another chip linked (again, securely) to your bank account and credit cards, allowing you to swipe the device at a POS terminal to pay for a purchase
- Access to important documents, such as a digital driver license, insurance information, organ donation info, blood type, allergy info, emergency contacts, and anything else that might be needed for driving or emergency situations
- Information storing all of your purchase receipts, membership and loyalty program info (grocery stores, fast food restaurants, etc.)

The technology already exists for all of this. It just needs to be put all together. It may take some time, but I think we'll have something like this in the next three to five years.

Apple is the obvious choice to make this happen. Call it the iWallet or even the new iPhone, I don't care. Yes, there is some infrastructure that would be required to make this all work. But companies will be more than happy to jump on board if Apple takes this on.

What do you think? What else would you like to see such a device do? I've turned off comments on the blog for now but if you have any other ideas, tweet me @brandbadger. I'll share the best ones in a future post.

Entrepreneurs Can Change the World

I just found this video from an excellent TED talk, and I couldn't resist sharing it. Enjoy!

Bankbuster Video

Today Blockbuster Video filed for bankruptcy. This doesn't come as a surprise to anyone who saw this coming months, if not years, ago. Despite being firmly established in the movie rental business, Blockbuster's lack of innovation has opened up the way for two competing companies to wedge themselves into dominance.

A while back, Blockbuster ventured into the "new game" of allowing customers to receive movies online and in the mail, essentially to directly complete with Netflix. Blockbuster had the advantage of numerous physical locations where customers could exchange movies if they didn't want to wait for them to come in the mail. At first, I worried that this might cause Netflix to slip, but Blockbuster was unable to convince customers that their core competency in movie rentals transferred to this new arena.

At the same time, Blockbuster's established core competency was attacked by Redbox. Kiosks became more and more ubiquitous, and the experience of renting became easier, faster, and cheaper. Redbox took the "old game" and improved it at Blockbuster's expense.

In the end, Blockbuster failed to see the way rental behaviors were changing and failed to come up with appropriate solutions necessary to stay in the game. We'll see if they can make any changes as they close some stores and reduce debt. But it may just be too little, too late.

Make it Suck Less

Most of the time, we see ads showing us how triumphant and victorious you'll feel once you quit. Ads also tend to portray how easy it will be ( a person confidently walking down three steps). It's refreshing to me to see Nicorette's recent take by admitting that quitting does suck, but they can help make it suck less.

I think that Nicorette can safely assume at least one thing about its target market, and that is that they are stressed out. That's why a lot of people smoke in the first place. So trying to quit only adds to that stress. Many of these people have probably tried to quit before, thinking it was going to be easy. So now, framed by the proper expectations (put in a blunt way for comedic effect), the journey of quitting can take place more realistically.

I'm a Big Kid Now!

What do you do if you want to put something out to market that is really unique, not just another me-too product? You do what Kimberly-Clark does time and again: invent your own product category. For nearly 140 years, Kimberly-Clark has been making paper products. Many of their offerings were completely revolutionary at the time they were introduced. For example, K-C invented the paper towel, and they were the first to put toilet paper on a roll.

More recently, they introduced Huggies Pull-Ups in 1989. The company has perfectly positioned and marketed these "training pants" as the perfect product for your toddler who is too big for diapers, but not yet ready for underwear. Since the product was launched, Pull-Ups has been a huge success for Kimberly-Clark. Even after copycats came to market, K-C has consistently enjoyed market share topping 60%. They've done this because they created the category and therefore dominate it. When it comes to potty-training, Kimberly-Clark is number 1.


How loyal is your customers to your brand? Do they use your product only because it is cheap or convenient? Would they switch if they could find a better price elsewhere? Or do they Facebook about you, rave to their friends about you, and sleep outside your store every time you release something new?

Obviously, there are different stages of customers. Apple is the classic example of a company that has fans, not customers. Apple fans seem to have an endless supply of passion and enthusiasm for their iPhones, iPads, and MacBooks. As a result, Apple has experienced mega success in recent years.

Having a loyal fan base isn't all fireworks and sprinkles, however. To begin with, the more devout your fans, the higher their expectations are for the next big thing. If you are not able to continually produce bigger and bigger, you very well may set up your fans for a huge let down. The good news is that fans are tolerant and forgiving of mistakes, provided that you get back on track after the flop.

Second, the bigger your following, the more you lose control of your identity as a brand. This can be a double-edged sword you want your fans to engage with your brand and share it with their friends. But you do need to accept that your fans will shape and re-configure your brand to their liking.

Finally, being a "fan brand" can polarize you from those who don't share the passion. Polarity can definitely breed success (just ask Sarah Palin), but you need to be able to handle criticism from your detractors.

In all, striving to make fans out of your customers is a good thing. Few brands can pull it off, but those that do have the potential to win big.

Choosing a Cause

Almost all major companies these days are involved in some sort of social change program, or cause marketing. As a result of the donations given and the awareness raised by corportations, great progress has been made in cancer research, environment protection, and other noble causes. This is not to say that these companies' motives are entirely altruistic. Most companies receive a millions of dollars of free publicity through participation in social programs.

In my opinion, the most effective campaigns come from companies that show expertise in their chosen cause. For example, a car company would have a more compelling case fighting to reduce carbon emissions than by fighting to reduce heart disease.

Additionally, I find it more credible for a company to solve the problems they themselves create, as opposed to solving the problems that others create. For example, Brita has been very active condemning the use of plastic bottles, citing environmental concerns. But the fact that they are a water filtration company set to directly benefit from any type of change diminishes the validity of the awareness they raise. I much prefer seeing campaigns from Dasani and Aquafina, bottled water brands that promote action plans to waste less and recycle more.

Overall, I think that it is a great thing whenever a company decides to get involved in social change. But for maximum efficacy, companies should choose causes that are relevant to themselves and the challenges they face.

Three Questions to Ask Yourself

Scott Cook, founder of Intuit, recently spoke to our group of MBAs. Among many valuable insights, he pointed out the need to continually ask the following three questions as it pertains to business.

How can we improve the current game?

How can we change the game?

What new games should we play?

He noted that the second and the third questions are the most important to focus on, yet most businesses dwell primarily on the first.

True to Focus

Creating a brand extension into a new cagetory of products can be risky. When ballpoint pen manufacturor Bic started making razors, it worked out well for them. With lighters, same thing. But when it came to making perfume, Bic lost their focus and the product flopped. Up until that point, they had been making products that were for "disposable convenience." Perfume strayed from this category, so it failed.

When I started trendstack.com, I did so intending to follow in the form of sites like trendwatching and springwise. However, since I have started my MBA in Brand Management here in Madison, I've gained clarity in what my focus should be. As such, I have redesigned the blog and moved it to brandbadger.com. I will still be focusing on innovation and creativity, but doing so more in the realm of how it relates to brands instead of trends. I am still tweaking some things about the site, so please be patient as I get everything in order. Overall, I hope you enjoy what you read and that it is relevant for you. Please subscribe and tell your friends!

Packaging Facelift

For decades, people had to deal with messy paint cans that were hard to open and use. In 2002, Dutch Boy finally introduced a new Twist & Pour container that made painting a whole lot easier. Because of the new packaging, Dutch Boy won big.

In spite of success stories like this, major brands still insist on packaging its products in inefficient ways. One glaring example is spaghetti sauce. Prego, Ragu, and others still use either glass or hard plastic bottles. There are several reasons why this is a problem.

1. Bottles are bulky and hard to recycle
2. It is difficult to get out the last of the sauce
3. Using a bottle requires you to use an extra pan to heat the sauce

These three problems could be averted by using a resealable pouch container to package the sauce. It would need to be strong enough to stand up on a store shelf, but thin and collapsible in order to reduce waste and to facilitate use of the entire product. Additionally, the pouch could be placed in a pot of boiling water (which you'll already have for the spaghetti), heating it and sparing you the use of a saucepan.

This type of packaging is already in use in Japan and some other countries. I'm not sure why the U.S. hasn't picked up on it, but that issue isn't something a little consumer awareness couldn't fix. With a growing emphasis on "green" and the constant need for consumer ease, this could be a big win for the world of spaghetti. For now, it's a huge missed opportunity.

On a side note, A year or two ago I submitted this idea to Campbell's, maker of Prego. Apparently they don't share my enthusiasm. Just wait, within the next five years we will see this happen. If Campbell's doesn't pick up on it, someone else will.