Product Innovation Case Study

THE PROBLEM: Biolife just may have invented a better Band-Aid. But what's the best way to let the world know?

When it comes to the hurdles that every start-up faces, five-year-old Biolife has already cleared a few. Its sole product, Quick Relief, or QR, a patented powder that stops bleeding within seconds, is unlike anything else out there and has impressed several hard-to-impress gatekeepers, including Wal-Mart, the nation's largest retailer, and CVS Stores, the drugstore chain. Both have already given QR valuable shelf space in several thousand stores. Plus, the head athletic trainer of the Los Angles Lakers has been seen using QR on national TV. But the hard part of CEO Doug Goodman's job is really just beginning: Now he needs to figure out the best way to convince the world to give QR a try.

Last summer, after attracting interest from CVS, Biolife's owners and senior managers, many of whom had spent years working for companies like Procter & Gamble and Pepsi, began a series of fierce debates. While everyone agreed that QR was a unique product with huge potential, they couldn't agree on the best way to market it. The five owners and seven managers, including Goodman, quickly split into two camps: One favored advertising, the other sampling. The 12 execs would pile into the conference room at the Sarasota, Fla., company and argue for hours. "There was a real polarity there," says Goodman of the series of tense meetings that stretched on for several months. Charlie Entenmann, who was Biolife's main financial backer and had built the successful Entenmann's baked goods company from a small family business, thought that advertising made more sense now that Biolife was entering the mass market. But Goodman believed that the company needed to build its credibility first if it truly hoped to go mass market.

Doing both really wasn't an option. Unlike P&G, where Goodman had spent 10 years as a brand manager, Biolife, which rang up $1.5 million in sales last year, didn't have unlimited resources. An experiment late last year of marketing on the cheap -- handing out coupons for $1 off a box of QR to 147,000 CVS customers -- had failed miserably. "People looked at the product and said they didn't trust it," says Goodman. "We had no credibility."

It was back in 1999 that Jim Patterson and John Alf Thompson had first developed QR. The two men were longtime research scientists who had formed Biolife hoping to discover a new way to purify water. They never solved that puzzle, but one day, while working in the lab, Patterson either pricked his finger accidentally or sliced it on purpose -- the story has changed several times, Goodman concedes -- leading to the discovery of QR, a patented combination of resin and salt, the two components Patterson had been experimenting with at the time.

As Goodman pressed his case during those meetings, he reminded the others in the room that Biolife had already been very successful at sampling. In 2002, the company had sent some samples of QR to Gary Vitti, the head trainer for the Lakers. After testing it for several weeks during the off-season, Vitti used QR one day during a regular-season game, prompting the on-air announcers to wonder why Vitti was sprinkling pepper on one of his players. QR was never mentioned by name, but it was the product's first appearance on TV, and it started to create some buzz for the company, at least among sports fans.

Wooing Vitti made sense, Goodman says, because the product is especially useful to the NBA, which allows only a 30-second time-out to stop a player from bleeding.

The problem was making sure that the sample didn't wind up in the trash. Vitti estimates that he gets around 100 requests a week from "different snake oil salesmen" hoping to get him to try out their magic potion on Shaq & Co. But there was something about QR that managed to catch his attention. At the time, he was using another product that neither he nor the players were particularly crazy about because it stung and left dark stains on the skin. "I gave this a try and I was really surprised," says Vitti. "This one popped out because it was so different."

In fact, Vitti liked the product so much that he now has a part-time job selling QR to other trainers at the professional and college level. Goodman estimates that as many as 75% of the teams in the National Hockey League and NBA use QR regularly.

Goodman reminded his colleagues that without "real missionaries" like Vitti, as well as several prominent doctors on the west coast of Florida, Biolife might not have had any sales at all. In 2002, the year QR was launched, Biolife had revenue of $150,000. Last year, after convincing more health care providers, including nurses at the MD Andersen Cancer Center in Texas, to try QR, Biolife's sales increased tenfold.

The Decision

By last fall, Entenmann and the others in the advertising camp had been convinced that sampling represented Biolife's best bet. The company began by training 16 pharmacists at CVS stores in the Tampa Bay area, figuring that people often ask pharmacists for medical advice. But after an initial bump in sales, interest in the product, which costs between $5 and $10 a box and comes in four different packages designed for different uses, such as Nosebleed QR, quickly died down.

Next, Biolife sent several of its own employees into a new CVS store in nearby Bradenton and handed out 400 samples in one day. Sales quickly surged and even after a few months, Biolife was still managing to sell 11 boxes a month at that store, compared with an average of one and a half boxes a month at the stores with trained pharmacists. But Goodman knew that there was no way that Biolife's 40-odd employees could duplicate those results at the 15,000 stores, including 3,000 Wal-Mart stores, that began selling QR in March.

More recently, the company has been looking into training off-duty emergency medical technicians, figuring that their experience with emergencies would bring tremendous credibility to the average consumer. Biolife has also been experimenting with different departments within a particular store. At several Wal-Mart locations, the company had started offering samples in the first-aid section but only received a lukewarm response. When they moved to the automotive and sporting goods sections, however, Goodman says the interest from shoppers was overwhelming.

The company has also experimented with its packaging by trying not to look like a typical medical product. On the Kids QR package, for example, Goodman's eight-year-old son, Bakie, is seen riding his bike and kicking a soccer ball. Actually, all of QR's boxes feature employees or investors. On a new package of Urgent QR, an extra-strength version of the product, Entenmann, 74, is shown rappelling down a mountain.

"We're learning how to get the most out of our marketing dollars, so we've been throwing around different things to see what sticks," Goodman says. Eventually, he hopes that ordinary consumers will be as enthusiastic about QR as Vitti has been. If that ever does happen, a box of QR just might replace the box of Band-Aids that most people have in the back of their medicine chests.

The Experts Weigh In

Should Biolife Emphasize Sampling or Advertising?

Biolife already has the distribution in place, which is a big accomplishment. But if the stuff doesn't move, it will be a huge problem. The company needs to put together a multitiered program: advertising in CVS's or Wal-Mart's Sunday circulars, signage in the stores, samples, and coupons. Because its margins are high, Biolife has the luxury to make the coupon for $1 or even $2 off. Every package it sells should include a coupon for the next purchase.

Stephen Shapiro, marketing professor,
Babson College

Everyone loves free samples and if Biolife has a good product, it makes sense to sample heavily. The problem is that as a small company, it needs to be smarter and more tactical to get its product into the hands of the right people at the right time. The fact that the product's in Wal-Mart is fantastic, but getting a shopper's attention is difficult. Biolife should consider piggybacking on a complementary or targeted product. Figure out who the heavy users are likely to be -- sports is obviously a natural -- and drill very deep in terms of high-user groups.

Art Averbook, president, Co-Op Promotions, and author,
All About Sampling and Demonstrations

A crucial element of any nationwide rollout is significant marketing dollars. Since Biolife doesn't appear to have them, it has to be creative. Media exposure like it got during that Lakers game is a huge plus, but it needs a lot more, particularly in front of women, who are still the primary shoppers in most families. It can really drive home the message that QR is a modern way to treat cuts and nosebleeds. There are probably a lot of parents who don't need much convincing that there's an easier way to treat a nosebleed than tilting a child's head back for five or 10 minutes.

Ben Solomon, BJS Consulting, Seattle

Apple is one of the leading companies that is renowned for its unique products and brand. A short talk with an Apple user reveals there is an emotional relation between consumers and Apple products, including every “i” product created in the past two decades.

Why are Apple products different from their competitors’ products? How does Apple manage to achieve innovation in its product families? Answering these questions provides interesting insight into Apple’s history and how it survived its most critical time between 1985 and 1997.

When Steve Jobs returned to Apple after being fired, the company share was only worth US $5 and its future was uncertain. Today, in 2016, Apple’s share price is around US $108 and the company achieved revenues of US $233.7 billion in 2015 with net income of US $53.39 billion.  This mini case study sheds light on the role that design thinking and innovation played in helping Steve Jobs rescue Apple with his consumer-driven strategy and vision for the company.

The Hard Times at Apple

The early days of Apple (which was cofounded by Steve Jobs on 1976) are characterized by its first personal computer that was delivered with Apple OS. During this time, Apple was dominating the market because there were no other manufacturers of this type of computer as computers were used only by governments or large companies. However, in 1985, Steve Jobs was forced to leave the company. This marked the start of a chaotic era in the company’s strategy and product development.

In the period 1985-1997, Apple struggled to achieve market success, especially after Jobs’s departure and increasing competition from other giants such as IBM, which decided to enter the PC computers market. During this period, Apple faced number of challenges including:

  • Unstable strategy due to the change of executive teams
  • Unclear vision about Apple’s competitive strategy, especially after IBM entered the PC market
  • Unclear vision about selling OS licenses, which would put the company in competition with Windows operating system
  • Large number of failed products (such as Newton PDA) and few successful ones (such as PowerBook)
  • Products not unique in the market
  • Confusion and uncertainty among Apple consumers, resulting from this strategy

Design Thinking to Fuel Innovation

Apple is one of the leading companies in the field of innovation and this couldn’t have happened without the company adopting design thinking. Design thinking is a solution-oriented process that is used to achieve innovation with considerations about the consumer at the heart of all development stages. Tim Brown, president and CEO of IDEO, defines design thinking as follows: “Design thinking is a human-centered approach to innovation that draws from the designer’s toolkit to integrate the needs of people, the possibilities of technology, and the requirements for business success.

“Most people make the mistake of thinking design is what it looks like. People think it’s this veneer — that the designers are handed this box and told, ‘Make it look good!’ That’s not what we think design is. It’s not just what it looks like and feels like. Design is how it works.” — Steve Jobs

In previous design thinking articles, we explored the different models of design thinking including the IDEO model, d.school model, and IBM design thinking model. Most of these models share the target of achieving innovation through three main factors:

 

User Desirability. The product should satisfy the consumer’s needs by solving everyday problems through a user-centered process. This can be achieved through a deep understanding of the user and through an empathic design process, which can only be achieved by putting ourselves in the shoes of our consumers (using tools such as an empathic persona map).

Market Viability. Successful products require an integrated marketing strategy that identifies the target segment and builds the product brand in accordance with this target segment. Tools such as the business model canvas can help our understanding of the project and create a business strategy for it. Also, tools such as the SWOT analysis allows us to understand the strengths, weaknesses, opportunities, and threats of the specified product.

Technology Possibility. Technology provides state-of-art tools for designers to innovate and build products that meet today’s needs. Technology should be adopted through the development process, including the prototyping stage where a visual presentation of the product is made to the team.

Think Different!

After Steve Jobs returned to Apple in 1997 (upon Apple’s acquisition NeXT), he started to apply the design thinking characteristics discussed above, which reflected his vision for Apple products. The vision discussed below was used to form Apple’s strategy from 1997 until today. Steve Jobs applied design thinking by focusing on:

  • People’s needs and desires, rather than only the needs of the business
  • Building empathy by helping people to love Apple products
  • The design rather than the engineering work; designers consider both the form and the function of the product
  • Building simple yet user-friendly products rather than complex hard-to-use products

The vision characterized above can be clearly identified in modern Apple products. Although other competitors focus on the features and product capabilities, Apple focuses on a holistic user experience.  For example, the iMac is renowned for being quiet, having a quick wake-up, better sound, and a high-quality display. This vision was formed in Apple’s development strategy that includes:

Excellence in Execution

In this part, Steve tended to improve the execution process by closing 2 divisions, eliminating 70% of the new products and focusing on the higher potential products, reducing the product lines from 15 to just 3, and shutting facilities to move manufacturing outside the company. Apple also launched a website for direct sale of its products and started to take an interest in materials and how products are manufactured within a consumer-driven culture.

Platform Strategy

Apple streamlined their product portfolio to a family of products that can be produced  much more quickly while keeping the existing design elements. Also, the company targeted product that require less repair and maintenance.

Iterative Customer Involvement

The consumer experience should be integrated into the design and development stages through participating in usability testing. Also, the design for interfaces should focus on the user experience.

Beautiful Products

In addition to the function of the product, the form should beautiful, which can be achieved through continuous innovation and development. Apple also focused on the materials and manufacturing process and took a bold approach to trying new ideas rather than sticking with the ordinary design forms.

Apple’s history with innovation provides a clear lesson about how design and innovation can turn company failure to market success and a leading position in a competitive market. Design thinking helped Apple to innovate while placing their consumers at the heart of the process. The period that Steve Jobs was absent from Apple demonstrates that copying others and lacking a clear innovation strategy can lead companies directly from success to failure. On the other hand, innovation can definitely help build a successful business.

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