I have always tried to teach my children the difference between needing and wanting a product. This is a value judgement that applies to every human, many times in surprisingly differing ways. People born to great wealth view need far differently than those of us born to the lower classes. I might need an efficient baby stroller for my grandchild, while a Beverly Hills grandpa needs a Bugaboo (the Danish stroller that can sell for well over $1000). Both do the same job, I need a stroller that safely holds and transports my grandchild for about $130. The Beverly Hills grandpa wants a stroller that transports his grandchild safely, and also, stylishly, offering many more features than my “need” vehicle.
One of the areas of greatest interest, to inventors and entrepreneurs, is the type of product or service that can offer the greatest payoff; need, benefits and return on investment when marketed. My counsel is to always seek projects that offer performance benefits addressing needs. The opportunity to offer fresh answers to problems will always trump a new feature enhancement on an existing product.
I have written about convergent and divergent products and the overwhelming advantages of the later. Need products or services are often divergent. Need products create an offering and an opportunity where no product answer exist: They face less competition, offer much greater profit potential, typically have a longer product life and can often be extended with new features (thus, becoming convergent).
Obviously, it is much more difficult to conceive a disruptive innovation/technology or product than to tweak an existing item. This is the reason the reward, both financial and psychological, are so much greater when a need is answered.
Let’s look at an ancient industry: jewelry. For centuries jewelry has been basically supplied and sold in the same way. Precious stones and metals were mined. Craftsmen work the gems and metals into artisan pieces. Wholesale distributors or brokers sold the finished pieces to retailers. Retail stores sell to the public. This has been the supply chain for the jewelry industry, essentially since biblical times. But, times have changed.
I consulted on a project several years ago built around the concept of placing computerized jewelry kiosks in department stores. Software was written enabling the customer to customize over 1,000,000 styles of jewelry based on desired price, gem choice, stone placement, karat, etc. The end design can be viewed on the computer screen, and an order placed. So, what is the need addressed here: In this case, personalized customized artisan jewelry at significant savings for the customer and, retailers drastically reduce the expensive inventory that jewelry demands plus payment is made at time of sale, well before delivery. Here the consumer, the factory and retailer enjoy a unique triple win. This disruptive type of innovation can shake older, slower channels of distribution and force snowballing advances in benefit delivery.
A woman might need a $7 jar of Oil of Olay moisturizer. She may want a $155, ½ ounce jar of Crème de la Mer. Most of us need an automobile for basic transportation. The Ford Focus or Honda Civic is a practical, economical choice. Many of us desire much higher end models such as BMW or Lexus. Each of these choices have an engine, four wheels and brakes. They all get us where we need to go. The logical Honda is needed. The Mercedes is wanted.
As an entrepreneur, ease of market entry is usually much greater for a product that answers the need for new usage benefits. Innovation is often a matter of degrees and definition. A new medical technology might address a rare disease that affects only a few thousand people. Nevertheless, an important need has been addressed. Typically such a technology will command very high pricing per application or treatment.
Features that embellish already existing product models can be profitable. It is usually easier to re-fit or re-design these features. The overall opportunity for market acceptance, finding lengthy sales traction and massive profits, however, is typically smaller when attached to “want” products.
Everyone needs a toothbrush. Recently I discussed the battery-operated spin-brush with my dentist. I had bought a spin-brush for everyone in my family thinking that it offered better dental care. My dentist advised that there was no clinical support that the battery brush offered better dental care than the old fashion bristle brush. More important, he says, was how we actually utilized the brush. The spin-brush is a want product, and priced about triple the price of the old fashion effective brush we grew up with.
Visit any fashion mall in the United States and you will find Brookstone and/or Sharper Image retail stores. I love to visit these stores. They are bastions of style, novel product features and creativity. They are also exclusively “want” stores. An inventor or product designer can do well by selling to these lifestyle stores. But, the big opportunity is in the creation and marketing of products that answer real unanswered needs, not added bells and whistles decorating clocks, foot massagers and wind chimes.
Design is crucial to success in many product categories. Design can enhance features and raise the perceived value of a product. Jimmy Choo design’s ladies shoes: priced at $300 and more per pair. What makes this designer’s shoes so highly desired, valued and wanted, simply the design. Inventors and entrepreneurs need to address design, but Jimmy Choo is only the latest popular shoe designer. How long will he last? There is a very long list of fashion designers that were also the latest, just not the greatest.
Great Britain based Clark Shoe’s has been providing the same styles for over 100 years. Initially Clark was boot-maker for the British colonial army. The Company’s signature shoe is the classic Desert Boot. The unstylish Desert Boot, was, and is a staple for outdoor comfort and performance even today. Clark created a shoe to address a need, and is a recognized brand around the world. Sales traction, pedigree, brand awareness and generations of devoted users have made Clark a very profitable and excellent model for entrepreneurs to study.
We live in the worlds most energetic consumer driven marketplace. Television, magazines, billboards, and the inter-net scramble to break through market clutter and deliver advertising messages to stoke our desire to purchase jeans, perfumes, watches, Scotch whiskey and automobiles. The intent is to drive our “want’ emotions.
The real opportunity for any aspiring entrepreneur is to address “needs”. A product that addresses our crisis of childhood obesity would fill a huge need. An aging population will need wellness technologies to minimize contact with an expensive health care system. Answering this type of need will pay huge financial dividends and offer the added benefit of doing societal good.
Geoff Ficke has been a serial entrepreneur for almost 50 years. As a small boy, earning his spending money doing odd jobs in the neighborhood, he learned the value of selling himself, offering service and value for money.
After putting himself through the University of Kentucky (B.A. Broadcast Journalism, 1969) and serving in the United States Marine Corp, Mr. Ficke commenced a career in the cosmetic industry. After rising to National Sales Manager for Vidal Sassoon Hair Care at age 28, he then launched a number of ventures, including Rubigo Cosmetics, Parfums Pierre Wulff Paris, Le Bain Couture and Fashion Fragrance.
Geoff Ficke and his consulting firm, Duquesa Marketing, Inc. (www.duquesamarketing.com) has assisted businesses large and small, domestic and international, entrepreneurs, inventors and students in new product development, capital formation, licensing, marketing, sales and business plans and successful implementation of his customized strategies. He is a Senior Fellow at the Page Center for Entrepreneurial Studies, Business School, Miami University, Oxford, Ohio.