Last week we had Shekhar Mitra, the former head of global research and development for Procter & Gamble in Memphis for a strategy working session with our Southern Growth Ventures portfolio company, Dermaflage. We are very fortunate to have Mr. Mitra on the board, and we asked him to share his innovation model with the team over lunch.
Mitra led the team that brought some of P&G’s greatest consumer product innovations to market over the last 20 years: Crest Whitestrips, Swiffer and Olay Regenerist, to name just a few. To illustrate the concept of “consumer-led innovation,” Mitra told us the story of how his team transformed Oil of Olay from a moisturizer product competing in a saturated market to P&G’s top-selling product line in its crucial $2 billion-a-year Olay skincare brand.
It all started when a cross-functional team of R&D and marketing experts at P&G zeroed in on an emerging trend among affluent women in New York City. These were the early adopters of Botox, using the product for the off-label effects of reducing wrinkles. The P&G team went and spent time with this user group to understand their motivations and drivers, ultimately discovering that there was a significant market for alternatives to invasive procedures. The team learned that while Botox was the standard of excellence, the consumers desired a beauty journey which meant a more tactical and sensual experience as part of their daily beauty regime – the key insight that drove the development of the Regenerist line.
The team took the insight from the end user and used it not just to formulate the product, but also to craft a disruptive market strategy that was ultimately a huge win for P&G. The company’s open innovation program, Connect and Develop, that started in 2001 helped Mitra’s team source a wound-healing technology from a small French company, Sederma, that was working with a new peptide to repair wounds and burns, but that also showed great promise with wrinkles. They took a technology that delivers results users can see, formulated a unique texture users describe as luxe and priced it above most drugstore brands but well below department store products. The result? They coined the phrase “masstige” (portmanteau of the words mass and prestige and has been described as “prestige for the masses”) and were the first in the beauty space to capitalize on this now-ubiquitous and lucrative market.
The lesson for you, dear reader: Start with an insight about the end user in your market. This will guide your product or service development as well as your market strategy. Don’t let the engineers, the scientists or the software developers drive the strategy. This isn’t just good advice for consumer products and retail brands, it holds true for heavy industrial, manufacturing and B2B. The universal truth is this: The end user ultimately drives demand throughout the value chain; therefore it is good business to understand what it is they want.
Jocelyn Atkinson and Michael Graber run the Southern Growth Studio, a strategic growth firm based in Memphis. Visit www.southerngrowthstudio.com to learn more.