People were unsure about how to react when Snap launched Spectacles. It was too expensive to be a merchandise and too gimmicky to be a core wearable camera. People tried to take it seriously, and with a strong marketing support Snap Inc sold 150 Spectacles in just one year with a price of $130. Some say it was a success some claim otherwise. At the end of the day, Snapchat chose to launch Spectacles 2.0 with a higher price:
Boring Company was a little bit conservative at first when they sold 50k hats with a price of $20 and then they came with 20k flame throwers at a price of $500. Yes, five hundred dollars. And do not think that it is a very expensive souvenir to buy, because on eBay the cheapest one was sold for $999. Because it was a very Special Edition product from a strong brand (Read it here.) But will the Boring Company keep pushing new ideas for the unboring? Why do they do so?
These are just a couple examples that are out there which are not proved to be marketing innovations yet. There are some other ones that are clearly just marketing stunts:
Here comes Pizza Huts Pie Tops II:
The first generation was a promo material, and it was not on sale. But 50 pairs of the new generation Pie Top II shoes will be sold by March 19th. Then? Who creates a commercial for just 50 pair of shoes, right?
So it is more about PR, coverage and buzz… The idea is obviously not creating any added value to consumers’ lives in a world that their phone (second screen) is closer to them then their shoes and there are competitors there who made it much more easy to order a pizza while watching a game, like years ago.
Or the Riedel glass… It is such a desired object for a Coca-Cola fan: enhances the taste, adds on the product experience, so beautiful… But how many of us would give 20 bucks to buy it, at the end of the day – it is just a glass of Coke, right? Most people would prefer to drink it from the can or preferably from the glass bottle.
So there is a significant line in between a marketing stunt or a merchandising attempt vs. a successful portfolio extension. In my opinion going back and checking the most successful examples of extension will tell us what exactly to focus on:
- Amazon: Bezos is a genius who knows how to challenge the definitions is mass marketing. With his long-tail approach he made the effort to define homogeneous target group demographics irrelevant for marketing world and he started to go after with a motivation/drive based target groups which makes cross-sell and customisation much more possible for marketers. He had the data, he had the insights, he knew whom to target… As a result of that thinking, Amazon came up with Kindle, Echo, Fire TV, Prime, Prime Video… Perfect products to convert opinion leaders, decision makers to create a change in our consumption behaviours and define new consumers needs, build new markets… Amazon is the best company ever to turn insights to opportunities and scale those up. E-readers were not their innovation, but they made it accessible, they are not like Netflix but they are not aiming Emmy’s but just opinion leaders…
- Nike: Nike+ and the collaboration with Apple helped Nike to democratise running and all competitors followed. The difference between Nike and the competition is: no matter they were the pioneers in that digital transformation, they didn’t do it the easy way. They could have easily bought some shares of Jawbone or Misfit -like Coca-Cola Company did…They could have acquired an app like Endomondo as Under Armour did. But for them, it was not about a marketing stunt, they wanted to understand the greatest insight – not what 10% – 20% followers think or do. They wanted to get the new opportunities, new technologies and behaviours from the right people. Although they didn’t have a database like Amazon, they knew whom to work with and what to learn to be able to get to the right insights.
Why are Google and Apple after self-driving cars? Why are they interested in wheels and gears all of a sudden? Or a more obvious one, why Uber decided to have Uber Eats, are they really that passionate to deliver Chinese to us?
As a summary, portfolio management is the strongest tool that businesses have to drive their future. You do not need to review your whole portfolio to become future-proof or you don’t need to have a big social media team to tell you what is hot in their gimmicky, short sighted, buzzy world… You just need to understand how to go beyond the big data and see the right people, and the right insights beyond that numbers. Without knowing the insight, you are destined to try&iterate to find what is working for you.
If you know where to mine the right insights, the rest is all about deciding about how fast you can get it.
Sept18’18 UPDATE: I claimed that Prime Video is not targeting Emmy’s like Netflix but apparently, it is not very right. They might not put as much effort in participating with lots of original content, but they won big in Emmy’s last night. Even for some, they were more successful than Netflix.