Vol. 1, No. 2
May, 2000
Public enemy number one for the inventor isn't the invention promotion firm. While they receive high billing, the inventor's main nemesis may well be Ralph Waldo Emerson. He's the guy who, over a century ago, popularized the notion: "Build a better mousetrap and the world will beat a path to your door." Actually, he made the same claim for better books and better sermons.
The Better Mousetrap Theory is alive and well, and wreaking havoc among America's inventors. The theory sounds right. After all, if you build a better mousetrap or other product, shouldn't the world beat a path to your door? Isn't this what the innovation process is all about?
The major problem with this theory is it doesn't work. Adherence to it will lead an inventor down the not-so-primrose path to costly mistakes, and ultimately to the graveyard of failed inventions and inventors. Emerson failed to define "better" and he failed to consider the reality of the marketplace and consumer (buyer) behavior.
So, what's wrong with the Better Mousetrap Theory? As just noted, it doesn't work. Don't new products need to offer the market something better? You bet. The problem with this theory is that it does not define "better," and it puts too much emphasis on the building or technical side of the innovation equation. Some years ago, a researcher did a search of the prior art developed since Mr. Victor's creative genius was unleashed upon the mouse world. He found several hundred devices for entrapping these furry little vermin, most of which, the researcher concluded, had some functional advantages over Mr. Victor's invention. However, at the time, the Victor Mousetrap still had the lion's share of the market. We did a quick search on the Internet, and found that since 1976, over 100 patents have been issued for new mousetrap devices.
In order to gain some insight into market share, we checked the mousetrap business at Wal-Mart. There, we found Victor had a whopping 98% share of market, relative to other mechanical devices for killing mice. Few Wal-Mart shoppers have beaten a path to the doors of those inventors of better mousetraps. They haven't had much of an opportunity, either. However, we also found that chemical means of extermination had nibbled away at the overall market. We found that in sales, chemicals had a 51% share of the market, whereas mechanical devices had 49%.
There is a lesson to be learned here for inventors who are fond of defining competition very narrowly, which includes over 90% of all WIN Innovation Center clients. Define competition in terms of function, not form. Mr. Victor's major competition did not come from another mechanical genius; he lost out to a chemical genius. Sorry, independent inventors cannot take credit for this one. One of the basic patents for chemical means of reducing rodent populations was issued to a researcher at the University of Wisconsin-Madison. By the way, for those readers who are enamored with exotic new technologies, this patent is one of the most, if not the most, financially rewarding patents, ever issued to the UW-Madison, which incidentally has the largest funded research program of any university in the world.
Commercial significance isn't technology driven, it is benefit driven. To most consumers in the United States, chemical warfare against rodents is a matter of convenience. The user does not have to come face to face with the reality of his or her crime against another creature, nor does he or she have to dispose of the victim's remains. In addition, chemicals require a lot less maintenance and they keep on killing. However, to consumers in many economies, it is a matter of who lives and who dies—people or pests. Thus, chemical mouse/rat traps have huge societal and economic implications. They are indeed a better mousetrap. Please note however, virtue here is defined in terms of benefits, not technology. People don't buy quarter-inch bits; they buy quarter-inch holes; but that will have to wait for another Brief. There is a more directly relevant issue to be discussed here.
There are two basic problems with the Better Mousetrap Theory. First, as just noted, it focuses on hardware, and not benefits. Second, it puts all of the inventor's strategic eggs into one basket. Better mouse-trappers tend to ignore the other elements in the new product strategic mix. In marketing literature, this mix is known as the "marketing mix." In either case, the mix consists of several strategic components—product, price, promotion, place and policy—which can be manipulated, or adjusted to meet the needs of the marketplace, or to best market a product or service. Strategies will change, depending on the situation, but the basic components remain the same.
First, let's look at the product component of the new product strategic mix. Product design should not start in the laboratory, or on the inventor's workbench. Rather, it should start with the intended customer. Customer research should always be built into the development process early on. Most inventors do little or no concept research with potential customers. The Better Mousetrap Theory lets them get away with this, if not encouraging them to do so, by placing the emphasis on the product/invention, rather than the customer's need. This is virtually always a mistake. Few people are so gifted they can optimize product design without any input from the marketplace during the development phase of the innovation process. Even very simple straightforward products involve choosing between options, in terms of design, appearance, features, and quality. In their haste to reach the market, most inventors and innovators simply charge ahead. This strategy is a close kin to throwing darts blindfolded. It pays to peek.
Likewise, in most cases, pricing is not a cut and dried affair. Manufacturers do not have the pricing flexibility they once had and in many cases they do not control the channels. It is not unusual for others in the channel of distribution, particularly retailers, to tell the manufacturer what the product will sell for. Still, price is an important strategic component in many new product situations. Careful thought should be given to price, particularly to the price quality tradeoff. Likewise, innovators need to consider carefully their basic introductory pricing strategy. In some instances, it may be better to penetrate the market as deeply and quickly, as possible. For example, if major competitors are likely to surface quickly, or perhaps are already present in the marketplace, then a low penetration price may be best. Low prices tend to discourage new competitors, and can be an effective tool to use in attempting to take market share away from an entrenched competitor - Wal-Mart used this strategy in entering the soft drink market and quickly gained market share from some well entrenched competitors. On the other hand, high prices typically attract competitors, particularly where high margins are possible. Still, this strategy is appropriate where initial volumes are likely to be low, or where there are other barriers to market entry operating such as strong patent protection.
Promotion is the third component of the mix. A lot of inventors and innovators ignore promotion, assuming their product will sell itself off the shelf. Unfortunately, this is generally not the case, particularly in mass merchandise stores. The basic problem is, if consumers don't know about a new product, they are not aware of its existence. That seems pretty obvious, but inventors often miss this point.
The problem doesn't stop here—if there is no awareness, there is no interest. If there is no interest, there is no desire, and where there is no desire, there is no action. Moving shoppers from awareness, through interest, desire and on to action, is a tall order. Few products have such instant appeal to move shoppers through this process while sitting on a retailer's shelf.
This isn't the end of the hurdles faced by a new product. In most discount stores there is little opportunity for point of purchase promotion. The task of in-store promotion falls to the front of the package. Promotional messages on the back or side panels are impudent, until sufficient interest is generated, and the shopper picks up the package. If the front panel can't capture the shopper's attention, and generate enough interest to motivate the shopper to stop and pick up the package, the shopper will simply walk on.
The major challenge faced by a new product is simply getting noticed. Mass merchandise/discount shoppers tend not to be leisurely shoppers. In general, they shop with a mission, and for the most part, they are not looking for new products. Even if they are, the competition for the shopper's attention as he or she moves through a store is horrendous! As a shopper moves down an aisle, every product, on both sides of that aisle, is in competition with every other product on that aisle for the shopper's attention.
This gives the term "competition" a new and broader meaning. Inside a store, competition is everywhere. For this reason, many manufacturers rely on print and electronic media to get their product message across. Here, the small firm is at a definite disadvantage, as most small firms can't afford to advertise their products in a meaningful manner. This inability can have a significant impact on the fourth component of the new product mix, place or if you prefer, distribution.
The channel of distribution used to launch a new product is often a critical element in new product strategic planning. A lot of otherwise potentially good new products fail because the wrong channel is selected to introduce the new product. The right channel depends on a variety of factors, including the nature of the product; market customers and, as just noted, the innovator's ability to support the new product with adequate promotion. Those with limited promotional budgets, are well advised to introduce their products through channels (stores) with point of purchase or sales support. The January 1998 issue of Entrepreneur contains an interesting article on getting a new product into Wal-Mart, "Scaling the Wall," by Karen Axelton (p.133). Ms. Axelton observes that "for many entrepreneurs, Wal-Mart is the Holy Grail of retailing…." She advises readers to "Begin by asking yourself three questions: is Wal-Mart right for your product? Is your product right for Wal-Mart? Is your company ready for Wal-Mart?" This is good advice. These same questions should be asked of any other store in planning the distribution strategy for a new product.
Policy is the fifth, and final component, of the new product strategic mix. Included here are such issues as product service, warranty and customer service policies. Low priced, easy to understand or use, improvement type new products may not require much support. However, these policy issues may be a very important component of the introduction strategy.
Note: In the next issue of IR we'll tackle the battle of better mousetraps.
Gerald G. Udell, Ph.D.
Copyright © 2000 by The Innovation Institute.
Permission to copy for free distribution granted to SCORE/SBDC's