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Brand and New Product Research: Adapt or Die!

  
  
  
Kodak Instamatic 104

I think we can all agree that an ongoing program of brand tracking will give you a ‘Heads Up!’ that something is amiss, just as new product research will yield invaluable insights of the acceptance of a product in the marketplace prior to launch.    Obviously, two well-known companies don’t agree with either of these methodologies.

When Kodak, founded in 1889, came out with the Brownie camera in 1900, it was heralded as bringing photographic abilities to the masses.  They continued to innovate and in 1963, introduced the Instamatic, one of the first cameras that held a film cartridge and was a point-and-shoot model.  When Kodak started, it was as a chemical company making cheap, affordable cameras to sell its main revenue-driver, film and paper.  Kodak felt comfortable following the ‘razor and blades’ strategy of selling inexpensive cameras and making large margins from consumables — film, chemicals and paper.

Kodak introduced the first digital camera in 1975, but because the company was still in the ‘film-and-paper’ revenue model, the technology was put ‘on hold’ for fear of cannibalizing their main revenue source.  During most of the 20th century Kodak held a dominant position in photographic film, and in 1976 had a 90% market share of photographic film sales in the United States.  However, many industry experts point to the decision to hold back on its camera business as the beginning of the end of Kodak, who earlier this year filed for bankruptcy protection, then announced that it was getting out of the camera business altogether. 

Kodak completely missed, or ignored, the point of the new ‘social media’ world where sharing photographs is a way of life.  Although the company introduced the EasyShare camera to try and catch-up, the advent of camera phones fundamentally changed the way consumers interacted with photographs.  The company still holds thousands of patents which will be very attractive to companies that are producing digital cameras, but they won’t be Kodak cameras.

Another example of a company that failed to adapt to changing times is the Fuller Brush Co., founded in 1906.  Their initial concept was that a door-to-door salesman who could conveniently deliver a product to your door was very appealing in the days before the Internet.  In fact, until 1985, all of the company's sales were still generated door-to-door. Fuller wasn’t the only company that followed this plan and the concept worked initially, giving Fuller Brush annual sales of $100 million in the 1950’s and 60’s.

But time, and the marketplace, caught up with Fuller and the company filed for bankruptcy less than two months after the company stated that it had completely ‘rebooted’ itself. Earlier in year, the company issued press releases stating that 2012 would be a “landmark year” for the company with a new marketing campaign.  But even with a new website and an expanded line of kitchen and bathroom cleaners, it was not enough to deal with the significant changes in the category, and more importantly, in the consumer marketplace and the company was forced to file Chapter 11 bankruptcy protection.

Compare this to companies such as Avon, which still utilizes the door-to-door concept, but it is coupled with an aggressive online plan that helped Avon achieve sales of $10.8 billion worldwide in 2010.  The Encyclopedia Britannica, which was managed by American businessmen who introduced direct marketing and door-to-door sales until 1973, has now evolved into The Britannica Ultimate Reference Suite 2006 DVD that contains over 55 million words and just over 100,000 articles.  Add a robust website to the mix and the Encyclopedia Britannica has changed with the times, and now is offering mobile service for ‘smart phones’.

Why have these companies continued to flourish while Kodak and Fuller failed?  It would be nice to say that they owe it all to brand tracking and marketing research, but suffice to say, these companies stayed on top of their customers’ expectations by using and implementing findings from brand and new product research. 

If Kodak had conducted new product research in the 1970’s about how consumers wanted their photographic ‘experience’, they probably would have spent more R&D dollars in new camera development that made pictures easy to share versus heading down blind alleys, such as the infamous Disc camera which replaced the film with digital technology, but didn’t improve the camera itself.

If Fuller Brush had been more in-touch with the customer buying experience, it would have probably converted its door-to-door strategy into an online or mail-order strategy much earlier and may have survived.  As it is, that’s two brands we thought would never go away relegated to the scrap heap.

Seeing how these two large companies failed should be enough to convince any marketing person of the value of conducting regular brand tracking and new product development research.  It’s really an easy concept to grasp – either adapt to an ever-changing marketplace by monitoring it with research or go out of business - just ask Kodak or Fuller Brush what they wish they had done.

Are there any other companies that you see destined not to make it due to a lack of knowledge of the marketplace? 

 

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Comments

Here's one to get you thinking - how did IBM, once THE computer company - miss the boat so completely with personal computers?
Posted @ Tuesday, March 13, 2012 12:54 PM by John
This just in! 
Britannica Going Digital 
Fans of the printed word will no doubt breathe a sentimental sigh over this news: after 244 years, Encyclopaedia Britannica is ceasing production of its multivolume reference books, shifting its focus to online encyclopedias and educational tools, company executives announced on Tuesday. Britannica usually prints a new set of tomes every two years, but 2010's 32-volume set will be the last one ever produced. "Everyone will want to call this the end of an era, and I understand that," said Britannica president Jorge Cauz. "But there's no sad moment for us." Print encyclopedias account for less than 1 percent of Encyclopaedia Britannica’s revenues, with curriculum products and other educational tools bringing in 85 percent and the remaining revenues coming from online subscriptions to its website.
Posted @ Wednesday, March 14, 2012 9:58 AM by John
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