How we think of innovation is half-baked. Most of us are struck with the idea that innovation necessarily has to do with creating something new and disruptive or identifying a yet uncatered-to need.
But innovation doesn't necessarily have to disrupt. A lot of companies have been successful by simply reimagining existing products for newer markets.
Gillette serves as a good case study.
Gillette entered the Indian markets in 1984. In 2004, it launched its newest triple-blade system —MACH3. But the sales were flat for a long time, and the product did not go through any changes. It retained features like its diamond-like coating blades, 'PowerGlide' smoothness, ergonomic handles, pivoting precision heads, and a price that was 10x more than its two-blade competitors.
The target market for Gillette was professional men with higher disposable incomes than the average Indian. But the traditional, double-edged razor was preferred in India.
So, even though Gillette’s product (Mach3) was based on extensive consumer research on shaving struggles and eventually developed to deliver the value proposition, they had to re-think how to sell to the Indian customer.
The market opportunity was an estimated 400 million customers. They only needed to figure out how to unlock this existing market.
Consequently, Gillette went on to learn two things about Indian customers —
- They were price sensitive.
- The existing offering was insufficient because most lacked running water, had to manage longer facial hair, and sat on the floor while shaving. Nor were they satisfied with the existing double-razor solution, as they caused frequent cuts.
So, Gillette decided to re-imagine the MACH3.
It created a product called Gillette Guard and launched it in 2010, priced at ₹15 with ₹5 for a refill cartridge. The company drastically changed the design from its traditional razor designs produced for a developed market to something which was much more affordable and appealing to the Indian palate.
Design complexity was reduced and extra blades were eliminated. With a single-blade system, the product was simpler and had fewer parts to assemble during manufacturing, which reduced production costs.
Easy-rinse cartridges solved the issue of water unavailability, and lightweight ribbed handles with a better grip made shaving easier. A safety comb tackled the problem of frequent cuts, and a hang hole allowed for easy drying and storage.
And re-imagining the product bore good results, as evidenced by NDTV:
“Guard has grown share faster than any other P&G brand in India. And Gillette's market share for razors and blades in India has grown to 49.1 per cent, according to Euromonitor. That's up from 37.3 in 2007.”
Instances of innovating by re-imagining a product aren’t new.
We can also take a look at how General Electric (GE) created the Nano of ECGs (electrocardiogram) — MAC 400.
GE sold products such as magnetic resonance imaging (MRI) scanners, X-ray machines, and computerized tomography (CT) scanners that typically sold between $2,000 to $10,000 in US and Europe. And unsurprisingly, the market for such products in India was low.
But GE wanted to venture into India to sell low-cost cardiology products. The brief that the team working on the MAC 400 got was — it had to be a 3-channel product (capture and print heart rate waveforms in 3 traces), the market price shouldn't exceed ₹40,000, and production quality and safety should be consistent with the high-end GE products.
While cheaper products were available in the market, GE wanted to offer a better quality product at that price point. And Jimmy Joseph, Electrical Architect on the MAC 400’s team, wondered —
“Was it possible? Was the product brief viable? But somewhere within, we knew it was possible. Earlier no GE team used to take cost as one of the serious requirements. Cost overruns at the time of launch were normal. Here we didn't have that luxury this time.”
So, GE first carefully studied its high-end products to understand which parts could be re-engineered. Later, it took inspiration from changes in the consumer-electronic industry, where prices were lowering, but the quality wasn’t.
As they re-imagined the ECG machine, they realized that they had to look for affordable alternatives to the chips and components used in their high-end product. This also meant that they had to look for other suppliers for these components.
But making that effort to re-innovate took them closer to the criteria mentioned in brief:
- a 3-channel product (capture and print heart rate waveforms in 3 traces)
- the market price shouldn't exceed ₹40,000, and
- production quality and safety should be consistent with the high-end GE products.
Every part — design, electrical, mechanical, software — needed revisions. But finally, General Electric was successful in making it work.
This re-imagining of an existing product for a new market also helped GE get certified to sell in 113 countries across the globe. The product is manufactured in Bangalore for India (Europe, Middle East, and Africa), EMEA and the Latin America markets and at Wuxi for China and South East Asia.
But is re-imagining existing products or re-innovation only possible when a business has deep pockets?
It definitely made me think so. But the reason why an established business like GE or Gillette might spend on such an exercise is crucial to grasp.
An established business usually has a set of loyal customers. In all likelihood, the business also has a specific category of products that they are known for.
Further marketing or branding to the high-frequency of buyers will not get them to buy more. And so the business has to figure out a way to reach newer customers.
It could do this by introducing a new set of products or a newer category of products.
But doing so would drag the business into creating a fresh startup within the larger org, along with all the work that comes with it: identifying a need, building a product from scratch, identifying a go-to-market strategy, creating a brand, seeking product-market fit... it's a lot.
It could re-imagine an existing product. To do so, it would only have to figure out the reasons why its product worked within an audience segment and/or geography and did not in others.
This would help them work their way backwards and re-design the existing product, but with considerations made for an audience segment they haven't been able to capture so far.
This is also called Reverse Innovation.
Multinationals like Hindustan Unilever (HUL), too, have operated based on reverse innovation by re-imagining their marquee products for rural customers.
So, “Innovation” doesn’t necessarily have to mean “Creation.”
But suppose our priorities are misplaced and we are seeking personal glory that comes with notions of “disrupting a market,” instead of solving a real need. In that case, we may fail to realize that if a product already solves a daily need for a certain geography and audience segment, it is likely to solve it for people with the same need in other geographies and segments.
Only some feature-set tweaking and rebranding effort is needed.