Walk into any grocery store and you will be amazed at the dozens of ways Bounty paper towels are packaged. In sizes ranging from regular, big, large, giant, super, jumbo and varying numbers of rolls per package, it is anything but simple when it comes to purchasing paper towels. To complicate matters, Bounty is sold in different configurations in competing stores and has a luxury (yes, really) offering called DuraTowel. Priced at about twice the cost of Bounty’s basic paper towel, DuraTowels come in different color packaging and are often located apart from Bounty’s other products.
Read more at: http://www.forbes.com/sites/agoodman/2013/11/12/a-bounty-of-confusion-at-procter-gamble/
According to the article, P&G's line extension
strategy has slowed its sales compared to competitors such as Unilever. The
suggested formula to boost sales would then be to become innovative again. What
would you consider an innovation for products like paper towels and dish detergents? In your first 90 days as the new Chief Innovation Officer, what are the issues
you would like your team to work on?
Group PDF-Management
RispondiEliminaThe problem of line extension is that it not innovative enough to create new markets and compete with Unilever and Colgate-Palmolive. It is also a risk of cannabalizing sales of there own existing products. A new radical innovation when it comes to products like paper towels & dish detergents is difficult to think of. You could think of incremental innovations as new material, superior quality, and making it more environmentally friendly. A development of a product that combines form and function in such a way that the whole market has to change, can be called a radical innovation and that is what P&G needs. Customer should of course have options, but we still think that they should cut down on the number of different editions of the products.
If we were Chief Innovation Officer of P&G we would like to create an innovation process, and an "innovative" environment that inspires all coworkers. More specific; the first thing we would do is to set up a meeting between the people working in the innovation division and discuss one certain product, just to understand the need and wants of the customers. After that divide into different groups focusing on and working with different need and wants of the customer for that certain product. Then after some time the groups should meet up and discuss and come up with a proposal for a new product. This is a good way of coming up with new ideas. Something similar to the innovation process of IDEO.
I like your point and kind of agree with almost everything you wrote. Process innovation could be indeed one way to innovate and be cost wise too (as long as they reduce their product line). Of course, with the information provided in the article, we don't know what the other sources of cost are. Yet, even for commodities such as air transport product/service innovation is still possible. Any suggestions?
RispondiEliminaAs the article says, it is very diffucult to improve and/or innovate such daily-used products as toilet paper or dish detergent.
RispondiEliminaP&G could focus more on design to differentiate itself from their competitors. Monthly meeting between the staff and the innovation department could be held to change the look of the toilet paper in the next period. For example they could produce toilet paper with dollar signs on it.
Or focus more on environmental-friendly materials, not producing new toilet paper but take recycle ones.